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                                                                      EXHIBIT 99


           CAUTIONARY FACTORS RELEVANT TO FORWARD-LOOKING INFORMATION

         CytoTherapeutics, Inc. (the "Company") wishes to caution readers that
the following important factors, among others, in some cases have affected and
in the future could affect the Company's results and could cause actual results
and needs of the Company to vary materially from forward-looking statements made
in this Annual Report by the Company on the basis of management's current
expectations. The business in which the Company is engaged is rapidly changing,
extremely competitive and involves a high degree of risk, and accuracy with
respect to forward-looking projections is difficult.

Early Stage Development; History of Operating Losses - Substantially all of the
Company's revenues to date have been derived, and for the foreseeable future
substantially all of the Company's revenues will be derived, from collaborative
agreements, research grants and income earned on invested funds. The Company
will incur substantial operating losses in the future as the Company conducts
its research, development, clinical trial and manufacturing activities. There
can be no assurance that the Company will achieve revenues from product sales or
become profitable.

Future Capital Needs; Uncertainty of Additional Funding - The development of the
Company's products will require the commitment of substantial resources to
conduct the time-consuming research, preclinical development and clinical trials
that are necessary for regulatory approvals and to establish production and
marketing capabilities, if such approvals are obtained. The Company will need to
raise substantial additional funds to continue its product development efforts
and intends to seek such additional funds through partnership, collaborative or
other arrangements with corporate sponsors, public or private equity or debt
financings, or from other sources. Future cash requirements may vary from
projections based on changes in the Company's research and development programs,
progress in preclinical and clinical testing, the Company's ability to enter
into, and perform successfully under, collaborative agreements, competitive and
technological advances, the need to obtain proprietary rights owned by third
parties, facilities requirements, regulatory approvals and other factors. Lack
of necessary funds may require the Company to delay, reduce or eliminate some or
all of its research and product development programs or to license its potential
products or technologies to third parties. No assurance can be given that
funding will be available when needed, if at all, or on terms acceptable to the
Company.

Uncertainties of Clinical Development and New Mode of Therapy - None of the 
Company's proposed products has been approved for commercial sale or entered 
Phase III clinical trials. Even if the Company's proposed products appear to 
be promising at an early stage of research or development such products may 
later prove to be ineffective, have adverse side effects, fail to receive 
necessary regulatory approvals, be difficult or uneconomical to manufacture 
or market on a commercial scale, be adversely affected by government price 
controls or limitations on reimbursement, be precluded from commercialization 
by proprietary rights of third parties, by regulatory restrictions, or be 
subject to significant competition from other products. There can be no 
assurance that the Company will be able to demonstrate, as required, that its 
implants, on a consistent basis and on a commercial scale, among other 
things: (i) successfully isolate transplanted cells from the recipient's 
immune system; (ii) remain biocompatible with the tissue into which they are 
implanted, including, for certain implants, brain tissue; (iii) adequately 
maintain the viability of cells contained within the membrane for a 
sufficiently long time to be efficacious and commercially viable; (iv) safely 
permit the therapeutic substances produced by the cells within the membrane 
to pass through the membrane unto the patient in controlled doses for 
extended 

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periods; and (v) are sufficiently durable for the intended indication. While 
clinicians have generally had little difficulty in retrieving the Company's 
implants, there have been cases where the implant broke on attempted explant. 
The Company has changed its implantation procedure and is continuing a 
program of developing stronger implants. In addition, the viability of 
implanted encapsulated cells varies depending of the cell type, the 
implantation location and other factors. Lack of viability could restrict 
certain of the Company's programs to indications where long-term delivery of 
the therapeutics substances is not required. There can also be no assurance 
that the products that may be generated in the Company's stem cell programs 
will: (i) survive and persist in the desired locations, (ii) provide the 
therapeutic benefits intended, (iii) properly differentiate and integrate 
into existing tissue in the desired manner, or (iv) not cause tumors or other 
side effects.

There has been increasing regulatory concern about the risks of cell
transplantation. Concern has focused on the use of cells derived from cows (such
as are used in the Company's pain program) and cells from primates and pigs. The
United Kingdom has adopted a moratorium on xenotransplantation pending further
research and discussion; the EC Commission has introduced a ban on the use of
"high-risk material" from cattle and sheep in the Member States of the European
Union in the manufacture of pharmaceuticals (this ban would apparently not
include the type of cells used in the Company's pain program). In addition, the
FDA has proposed guidelines which impose significant constraints on the conduct
of clinical trials utilizing xenotransplantion and are likely to significantly
affect the cost of producing the Company's products using nonhuman cells; such
costs could make the Company's products cost more to produce than the Company
receives for their production. Furthermore, the FDA has published a "Proposed
Approach to Regulation of Cellular and Tissue-Based Products" which relates to
the use of human cells. The Company cannot presently determine the effects of
such actions nor what other actions might be taken. Restrictions on the testing
or use of cells, whether human or nonhuman, as human therapeutics could
adversely affect the Company's product development programs and the Company
itself. See "Government Regulation."

Dependence on Outside Parties - The Company's strategy for the research,
development, commercialization and marketing of its products contemplates that
the Company will enter into various arrangements with corporate sponsors,
pharmaceutical companies, universities, research groups and others. There is no
assurance that the Company will be able to enter into any additional
arrangements on terms acceptable to the Company, or successfully perform its
obligations under its existing or any additional arrangements. If any of the
Company's collaborators fails to perform its obligations in a timely manner or
terminate their agreement with the Company, the development or commercialization
of the Company's product candidate or research program under such collaborative
agreement may be adversely affected. Moreover, the Company is particularly
dependent on its pain program partner, Astra AB, because changes in the
development of this particular program may significantly affect the Company's
stock price. In addition, because of the Company's obligation to repurchase
certain of the stock it sold to Genentech in connection with certain
termination's of the Parkinson's Agreement, any such termination could have an
adverse effect on the Company's liquidity.

Need for and Uncertainty of Obtaining Patent Protection - Patent protection for
products such as those the Company proposes to develop is highly uncertain and
involves complex factual and evolving legal questions. No assurance can be given
that any patents issued or licensed to the Company will not be challenged,
invalidated or circumvented, or that the rights granted under such patents will
provide competitive advantages to the Company.

Existence of Third Party Patents and Proprietary Rights; Need to Obtain Licenses
- A number of pharmaceutical, biotechnology and other companies, universities
and research institutions have filed patent applications or have been issued
patents relating to cell therapy and encapsulation and other technologies
potentially relevant to or required by the Company's expected products. The
Company cannot predict which, if any, of such applications will issue as patents
or

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the claims which might be allowed. The Company is aware that a number of 
entities have filed applications relating to stem and/or progenitor cells. 
The Company is also aware of a number of third-party patent applications and 
patents relating to cell encapsulation or claiming use of genetically 
modified cells to treat disease, disorder or injury. In particular, the 
Company is aware of a third-party U.S. patent which relates the use of cells 
for alleviating chronic pain in humans and of two issued U. S. patents 
claiming certain methods for treating defective, diseased or damaged cells in 
the mammalian CNS by grafting genetically modified cells. The Company cannot 
predict the effect of existing patent applications and patents on future 
unencapsulated products. In addition, the Company is aware of third-party 
patents and patent applications claiming rights to the neurotrophic factors 
(such as CNTF, NT 4/5, Neurturin, and CT-1) which the Company hopes to 
deliver with its technology, and to the production of these factors through 
the use of genetically modified cells. The Company expects to use genetically 
modified cells to produce these factors for use in its encapsulated products 
and expects that it may wish to genetically modify its stem/progenitor cells. 
The Company may also be required to seek licenses in regard to other cell 
lines, the techniques used in creating or obtaining such cell lines, the 
materials used in the manufacture of its implants or otherwise. There can be 
no assurance that the Company will be able to establish collaborative 
arrangements or obtain licenses to the foregoing technology or to other 
necessary or desirable technology on acceptable terms, if at all, or that the 
patents underlying any such licenses will be valid and enforceable. See 
"Patents, Proprietary Rights and Licenses" in the Company's Annual Report on 
Form 10-K.

Government Regulation - The Company's research, preclinical development and
clinical trials, as well as the manufacturing and marketing of its potential
products, are subject to extensive regulation by governmental authorities in the
United States and other countries. The process of obtaining FDA and other
required regulatory approvals is lengthy, expensive and uncertain. There can be
no assurance that the Company or its collaborators will be able to obtain the
necessary approvals to commence or continue clinical testing or to manufacture
or market its potential products in anticipated time frames, if at all. In
addition, several legislative proposals have been made to reform the FDA. If
such proposals are enacted they may result in significant changes in the
regulatory environment the Company faces. These changes could result in
different, more costly or more time consuming approval requirements for the
Company's products, in the dilution of FDA resources available to review the
Company's products, or in other unpredictable consequences. See "Government
Regulation"

Sources of Cells and Other Materials - The Company's potential products require
genetically engineered cell lines or living cells harvested from animal or human
sources. There can be no assurance that the Company will successfully identify
or develop sources of the cells required for its potential products and obtain
such cells in quantities sufficient to satisfy the commercial requirements of
its potential products. These supply limitations may apply, in particular, to
primary cells which must be drawn directly from animal or human sources, such as
the bovine adrenal chromaffin cells currently used in the Company's product for
the treatment of pain. As an alternative to primary cells, the Company is
developing products based on the use of genetically altered cells. Intellectual
property rights to important genetic constructs used in developing such cells,
including the constructs used to develop cells producing neurotrophic factors,
are or may be claimed by one or more companies, which could prevent the Company
from using such cells. In addition, many suppliers of materials used by the
Company in its media, implants, and other components have restricted the use of
such materials for implantation into humans; if the Company cannot obtain the
necessary materials for its implants, the Company would be adversely affected.

Manufacturing Uncertainties - The Company's pilot manufacturing plant, may not
have sufficient capacity to permit the Company to produce all the products for
all of the clinical trials it anticipates developing. In addition, the Company
has not developed the capability to commercially manufacture any of its proposed
products and is unaware of any other company which has 


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manufactured any membrane-encapsulated cell product on a commercial scale. There
can be no assurance that the Company will be able to develop the capability of
manufacturing any of its proposed products at a cost or in the quantities
necessary to make a commercially viable product, if at all.

Competition - Competitors of the Company are numerous and include major
pharmaceutical and chemical companies, biotechnology companies, universities and
other research institutions. Currently, several of these competitors market and
sell therapeutic products for the treatment of chronic pain, Parkinson's disease
and other CNS conditions. In addition, most of the Company's competitors have
substantially greater capital resources, experience in obtaining regulatory
approvals and, in the case of commercial entities, experience in manufacturing
and marketing pharmaceutical products, than the Company. A number of other
companies are attempting to develop methods of delivering therapeutic substances
within or across the blood brain barrier. There can be no assurance that the
Company's competitors will not succeed in developing technologies and products
that are more effective than those being developed by the Company or that would
render the Company's technology and products obsolete or non-competitive. See
"Competition."

Dependence on Key Personnel - The Company is highly dependent on the principal
members of its management and scientific staff and certain of its outside
consultants. Loss of the services of any of these individuals could have a
material adverse effect on the Company's operations. In addition, the Company's
operations are dependent upon its ability to attract and retain additional
qualified scientific and management personnel. There can be no assurance the
Company will be able to attract and retain such personnel on acceptable terms
given the competition among pharmaceutical, biotechnology and health care
companies, universities and research institutions for experienced personnel.

Reimbursement and Health Care Reform - In both domestic and foreign markets,
sales of the Company's potential products will depend in part upon the
availability and amounts of reimbursement from third-party health care payor
organizations, including government agencies, private health care insurers and
other health care payors such as health maintenance organizations and
self-insured employee plans. There is considerable pressure to reduce the cost
of therapeutic products. There can be no assurance that reimbursement will be
provided by such payors at all or without substantial delay, or, if such
reimbursement is provided, that the approved reimbursement amounts will provide
sufficient funds to enable the Company to sell its products on a profitable
basis. See "Reimbursement and Health Cost Control."




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