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Human Stem Cells Institute Becomes a Stockholder in Artgen, Inc.

Moscow – December 22, 2016. PJSC HSCI – The Human Stem Cells Institute (“HSCI”, MOEX: ISKJ), a leading Eastern European biotech company, today announced that it has become a stockholder in Artgen, Inc., a US privately held biotechnology company located in Rockville, MD.

Exercising its equity participation rights, HSCI has made its first tranche out of the agreed investment which, when fully made, will result in HSCI’s share in Artgen in the amount of 32%.

Earlier HSCI licensed to Artgen its innovative ischemia drug Neovasculgen® for the development in the United States and Canada (see: the press-release).

Neovasculgen® is a first-in-class gene therapy drug that was approved in 2011 for human use in Russia for treatment of atherosclerotic Peripheral Arterial Disease (PAD), including Critical Limb Ischemia (CLI).

To advance the Project, ArtGen is partnering with BioHealth Innovation, Inc. (BHI, http://www.biohealthinnovation.org/), an innovation intermediary that translates market-relevant research into commercial success by connecting management, funding, and markets. 

The agreements with the US partners have been signed by HSCI in August 2016.

In the course of 3 years from the project start, the contract manufacturing is planned to be set up on the U.S. grounds and pre-clinical studies and the Phase I clinical trials are expected to be completed.

Artur Isaev, General Director of HSCI, commented: “It was critical for us to have with our partners not only a license, but also an investment agreement to influence the project implementation as Artgen’s stockholder with the proper rights. And we consider Artgen to be our important financial asset whose value will be increasing upon passing key project milestones.”

About Neovasculgen®

Neovasculgen® is a first-in-class gene therapy drug whose mechanism - therapeutic angiogenesis - introduces a new approach to treating ischemia: the use of an evolutionarily programmed process of blood vessel creation and growth.

Developed by HSCI for the treatment of atherosclerotic Peripheral Arterial Disease (PAD), including Critical Limb Ischemia (CLI), Neovasculgen® contains the gene of the Vascular Endothelial Growth Factor (VEGF 165) embedded in a plasmid vector (carrier) and thus stimulates the growth of collateral blood vessels (angiogenesis).

Compared to standard therapies, Neovasculgen® promotes a long-term therapeutic effect and significantly improves patients’ quality of life, first of all manifested in a substantial increase of Pain Free Walking Distance (Neovasculgen® has a long-term effect /5 years – compared to 6-8 months for standard therapies/ and can be effectively applied at PAD, including CLI /Stages 2a-3 of low limb ischemia according to Fontaine-Pokrovsky/). By increasing the number of functioning capillaries in ischemic tissues and improving the blood supply, Neovasculgen® reduces the rate of amputation and mortality in patients with lower limb ischemia, especially in those who are inoperable for an occlusive PAD. In addition, the drug has a significant healthcare economic efficiency (cost-saving effect).

Russian government granted Neovasculgen® reimbursement approval and included it in the List of Vital and Essential Drugs (VED) in 2016.

As Neovasculgen® is the first-in-class gene therapy product for treatment via stimulation of angiogenesis, HSCI plans to implement new clinical trial protocols in order to expand the range of indications for applying Neovasculgen®. To start with, HSCI aims to work in the therapy of Diabetic Foot Syndrome and IHD (Ischemic Heart Disease). In October 2016 HSCI received a permission to start clinical trials for Diabetic Foot Syndrome in Russia, while in September 2016 HSCI’s subsidiary “NextGen” Co. Ltd. received a patent for gene-therapy method of Diabetic Foot Syndrome treatment.

In addition, R&D is in progress for the creation of gene-activated bone grafts based on Neovasculgen®.

Full Version of the Press Release

22 December 2016