ViaCell's Selective Amplification technology involves the expansion of stem cell populations using growth stimulating factors together with cycles of purification to remove differentiated cells using antibodies that target proteins on their surface. By repeating growth and purification cycles, we are able to greatly expand highly defined populations of stem cells in what we expect to be a commercially feasible system.

CB001, ViaCell's lead cellular therapy product candidate, is initially being developed for use in bone marrow and other hematopoietic stem cell transplants. CB001 is a proprietary, highly concentrated and purified population of stem cells. In November 2003, we submitted with the US Food and Drug Administration a revised protocol to our Investigational New Drug application, or IND, originally filed in October 2001 and relating to CB001, and we are currently enrolling patients for treatment in a Phase I clinical trial to assess the safety and preliminary clinical efficacy of CB001. The primary endpoint we hope to achieve in clinical trials of CB001 is rapid neutrophil, or infection-fighting white blood cell, recovery.

CB001 consists of a highly concentrated and purified population of hematopoietic stem cells which are selectively amplified from umbilical cord blood that we currently obtain from public cord blood banks. CB001 is expected to provide a more effective treatment with fewer side effects and faster recovery. In particular, we believe the administration of CB001 will result in less GVHD, often a severe complication of transplant therapy and accelerate hematopoietic reconstitution which drives the generation of early neutrophil recovery. Neutrophils are the body's first defense against infections. Early neutrophil recovery is associated with fewer opportunistic infections and a reduced length of hospital stay. Because of its attributes, CB001 has the potential to significantly expand the market for stem cell therapy to new indications.

ViaCell's scientists have increased hematopoietic stem cell populations by up to 150-fold, with an average of 35-fold expansion within a 14-day period. The potency of a cord blood unit has been correlated with the number of hematopoietic stem cells in the graft. The increase in stem cell populations that we have achieved may therefore be highly significant in producing therapeutic effects.

If evidence of long-term engraftment with CB001 is shown in the Phase I clinical trial, ViaCell plans to conduct a Phase II clinical trial designed to demonstrate that CB001 can serve as a sole source of hematopoietic stem cells in patients requiring hematopoietic stem cell transplantation. If Phase II clinical trials show strong evidence of efficacy and a favorable safety profile, Viacell will consider filing an Accelerated Approval application with the FDA based on the Phase II data. ViaCell expects that any Phase III clinical trials will be designed to demonstrate superiority of CB001 compared to standard transplantation methods. ViaCell intends to select the Phase III clinical trial outcome measures to establish that CB001 is superior to standard stem cell sources based on clinically meaningful endpoints. In addition, ViaCell intends to subsequently seek regulatory approval for CB001 in other countries.