Proneuron and Cell Design of Atlanta to Establish a New Cell Processing Facility in Atlanta to Support The Current Phase II Trial of ProCord for Complete Spinal Cord Injury

Atlanta, GA. and Los Angeles, CA, June 7, 2004 --- Proneuron Biotechnologies, Inc and Cell Design, L.L.C. and announced today that the two companies have entered into an agreement to establish a new human cell processing facility in Atlanta to support the current Phase II study of Proneuron's Procord, autologous incubated macrophages for complete spinal cord injury. Cell Design, a subsidiary of Cell Dynamics, LLC, will provide the required cell processing facility for the manufacturing of ProCord in the southeast region of the U.S. for this international, multi-center, randomized-controlled clinical trial. The agreement with Cell Design will support Proneuron's collaboration with the Shepherd Center in Atlanta, which is anticipated to begin enrollment in 2004 and is already taking an active role in the study. Upon receipt of the requisite approval of the United States Food and Drug Administration, the facility will also provide for the commercial manufacturing of ProCord.

"We are very enthusiastic about the relationship with Proneuron. Proneuron's technology provides our company with an exciting foray into the field of spinal cord research and autologous cell therapy. We very much look forward to working with this fine international team on what is clearly a very important study," said Dr. Robert McNally, President of Cell Dynamics, LLC.

Following tissue injury, a type of white blood cell, called a macrophage, quickly starts to remove cell debris. These macrophages then start to secrete growth factors that promote a controlled inflammatory reaction to initiate the wound healing process. While this process occurs effectively in most tissues including peripheral nerves, it does not occur effectively in the central nervous system (CNS). Discoveries led by Prof. Michal Schwartz of the Weizmann Institute of Science have shown in pre-clinical studies that specially treated macrophages promote recovery from spinal cord injury (SCI). Based on these findings, Proneuron is now evaluating the safety and efficacy of ProCord, currently an experimental procedure for patients with complete spinal cord injury. Complete spinal cord injury is defined as having no feeling or movement below the point of injury.

"Cell Dynamics has a strong track record in the processing of human cells according to FDA regulations and current Good Manufacturing Practices (cGMP). We are therefore delighted that they have joined the study. The Cell Design subsidiary, together with our other existing cell centers, one in Denver, CO and the other in Hackensack, NJ (in collaboration with Progenitor Cell Therapy), will set the basis for Proneuron's next stage in the development and commercialization of ProCord in the US," said Nir Nimrodi, Proneuron's Chief Executive Officer.

About Proneuron Biotechnologies

Proneuron is a privately held biopharmaceutical company developing products for the medical treatment of spinal cord injuries and other disorders of the central nervous system. Its products are based on proprietary technology for modulating the interaction between the nervous and immune systems. The company's products are currently being evaluated in several clinical studies located in the U.S., Belgium and Israel. These include: an independently managed, international, multi-center, randomized-controlled Phase II trial of ProCord, autologous incubated macrophages, an experimental procedure for spinal cord injuries and a Phase II program of Cop-1 for the treatment of Glaucoma and other neurodegenerative diseases. The latter is being managed by Teva as part of the Proneuron's strategic collaboration for development and commercialization of Cop-1 for various neurodegenerative indications. The Company is also developing PN277 for the treatment of additional neurological diseases.

About Cell Dynamics, L.L.C.

Cell Dynamics is an FDA inspected cGMP tissue processing laboratory dedicated to the processing of human tissues and cells for research, transplant and cell-derived therapeutics. The company currently specializes in procuring and processing tissues from human cadaveric donors. Active programs have been established for human kidneys, heart, liver, cartilage and dermis, a unique source of progenitor and stem cells. Autologous blood and tissues will be processed for the treatment of patients with spinal cord injuries. For more information about Cell Dynamics, visit www.celldynamicsllc.com

For additional information: Marjie Hadad, media liaison, Proneuron, Marjie.hadad@proneuron.com; +972-55-365-220.