<SEC-DOCUMENT>0001299933-16-002563.txt : 20160531
<SEC-HEADER>0001299933-16-002563.hdr.sgml : 20160530
<ACCEPTANCE-DATETIME>20160531091801
ACCESSION NUMBER:		0001299933-16-002563
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20160527
ITEM INFORMATION:		Cost Associated with Exit or Disposal Activities
ITEM INFORMATION:		Other Events
FILED AS OF DATE:		20160531
DATE AS OF CHANGE:		20160531

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			STEMCELLS INC
		CENTRAL INDEX KEY:			0000883975
		STANDARD INDUSTRIAL CLASSIFICATION:	BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836]
		IRS NUMBER:				943078125
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-19871
		FILM NUMBER:		161684061

	BUSINESS ADDRESS:	
		STREET 1:		3155 PORTER DRIVE
		STREET 2:		.
		CITY:			PALO ALTO
		STATE:			CA
		ZIP:			94304
		BUSINESS PHONE:		6504753100

	MAIL ADDRESS:	
		STREET 1:		3155 PORTER DRIVE
		STREET 2:		.
		CITY:			PALO ALTO
		STATE:			CA
		ZIP:			94304

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CYTOTHERAPEUTICS INC/DE
		DATE OF NAME CHANGE:	19930328
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<TYPE>8-K
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<TITLE> StemCells, Inc. (Form: 8-K) </TITLE>
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		UNITED STATES<BR>
	SECURITIES AND EXCHANGE COMMISSION
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	WASHINGTON, D.C. 20549
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	FORM 8-K
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	CURRENT REPORT
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	Pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934
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	Date of Report (Date of Earliest Event Reported):
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	May 27, 2016
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	StemCells, Inc.
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	Delaware
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	000-19871
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	94-3078125
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_____________________<BR>
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	7707 Gateway Blvd, Suite 140, Newark, California
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	94560
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	510.456.4000
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	Not Applicable
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	Former name or former address, if changed since last report
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[&nbsp;&nbsp;]&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<br>
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	Item 2.05 Costs Associated with Exit or Disposal Activities.
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On May 27, 2016, StemCells, Inc. (the "Company") decided to terminate its Phase II Pathway Study in spinal cord injury following an in-depth review of data from the study and after obtaining, earlier the same day, the concurrence of the study&#x2019;s Interim Analysis Data Monitoring Committee.  While the results showed overall improvement in patients treated with the Company&#x2019;s proprietary cells, the magnitude of the effect and the perceived trend of the effect over time did not justify continuing the study or exploring the variability in the initial patient observations, given the financial resources available to the Company. <br><br>Following this, on May 30, 2016, the Company's Board of Directors approved a plan to wind down the Company, having considered the decision to terminate the Pathway Study, the Company&#x2019;s available strategic alternatives and its current cash position.  The Company will evaluate opportunities to monetize its intellectual property, including data collected in its studies and trade secrets, as well as the transfer of its proprietary HuCNS-SC cells and other assets through a potential sale. The Company will not proceed with its earlier plans to conduct a rights offering, for which it had filed a registration statement with the SEC.  As part of the wind down of operations, the Company will conduct a reduction in force impacting all of its remaining full-time employees, consisting of approximately 50 employees, beginning August 1, 2016.  <br><br>The Company expects to complete this reduction in force and record a one-time charge for severance and related expenses of approximately $1.25 million in the third quarter ending September 30, 2016.  As of May 31, 2016, the Company had cash and cash equivalents of approximately $5.5 million. <br><br>A press release issued by the Company announcing its termination of the Phase II Pathway Study and wind down of business operations, dated May 31, 2016, is attached hereto as Exhibit 99.1.
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	Item 8.01 Other Events.
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On May 31, 2016, the Company issued a press release announcing the termination of its Phase II Pathway Study in chronic cervical spinal cord injury and wind down of business operations.  <br><br>A copy of the Company's press release is attached hereto as Exhibit 99.1.
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<BR><BR><BR><BR><P ALIGN="LEFT" STYLE="FONT-SIZE: 10PT">Apart from statements of historical fact, the text of this Form 8-K and attached press release constitute forward-looking statements within the meaning of the U.S. securities laws, and is subject to the safe harbors created therein. These statements include, but are not limited to, statements regarding the future business operations of StemCells, Inc. (the "Company"); the prospect for the successful divestiture of any of the Company&#x2019;s assets, the possibility of a liquidating distribution to Company stockholders, and the ability of the Company to pay its creditors and successfully complete an orderly wind down. These forward-looking statements speak only as of the date hereof. The Company does not undertake to update any of these forward-looking statements to reflect events or circumstances that occur after the date hereof. Such statements reflect management's current views and are based on certain assumptions that may or may not ultimately prove valid. The Company's actual results may vary materially from those contemplated in such forward-looking statements due to risks and uncertainties to which the Company is subject, including those described under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 and in its subsequent reports on Forms 10-Q and 8-K.</P><!-- PageBreak START -->
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	Pursuant to the requirements of the Securities Exchange Act of 1934, the
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	StemCells, Inc.
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	May 31, 2016
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	By:
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	/s/ Kenneth Stratton
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	Name: Kenneth Stratton
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	99.1
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Press Release dated May 31, 2016
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<P align="center" style="font-size: 10pt"><FONT style="font-size: 11pt"><B>StemCells, Inc. Announces Termination of Phase II Pathway Study Following Review of Data</B></FONT>



<P align="center" style="font-size: 11pt"><I>Company to Commence Orderly Wind Down of Operations</I>



<P align="left" style="font-size: 11pt">NEWARK, Calif., May&nbsp;31, 2016 &#151; StemCells, Inc. (NASDAQ: STEM) (the &#147;Company&#148;) today announced its
decision to terminate the Company&#146;s Phase II Pathway Study in spinal cord injury following an
in-depth review of data from the study and after obtaining the concurrence of the study&#146;s Interim
Analysis Data Monitoring Committee (the &#147;IA-DMC&#148;). While the results showed overall improvement in
patients treated with the Company&#146;s proprietary cells, the magnitude of the effect and the
perceived trend of the effect over time did not justify continuing the study or exploring the
variability in the initial patient observations, given the financial resources available to the
Company.


<P align="left" style="font-size: 11pt">Seventeen patients have already been dosed in the Pathway Study. The first cohort of the Pathway
Study, consisting of six patients, was designed to assess the safety, and preliminary signs of
efficacy, of cell administration into the cervical cord and select the dose level for the
40-patient second cohort. The second cohort of the Pathway Study was a randomized, controlled and
single-blinded arm of the trial in 40 motor complete patients.


<P align="left" style="font-size: 11pt">The six-, nine- and twelve-month results from the first cohort of the Pathway Study revealed
encouraging patterns of improvements from baseline, especially in the first six months of the
study. This was confirmed separately by a review of the data by independent experts in spinal cord
injury, who agreed that the overall results indicated evidence of biological activity. However, the
Company observed in this cohort a declining trend in the magnitude of the effect in both strength
and function at the twelve month time point. While the results at twelve months were still improved
from baseline, this late variability led the Company to conduct an earlier-than-planned interim
analysis of the Cohort II data. The results of this interim analysis, which were reviewed by the
Company as well as by the IA-DMC, showed differences in motor strength that favored the treatment
group, but the magnitude of the effect led both the Company and the IA-DMC to conclude that
achieving the primary endpoint objective of the Pathway Study would be unlikely. Based upon these
findings, the Company has decided to terminate the study and close out operations.


<P align="left" style="font-size: 11pt">&#147;Despite the outcome of the Pathway Study reported above, the Company is proud of our team&#146;s
numerous accomplishments and successes to date,&#148; said Dr.&nbsp;Stephen Huhn, Chief Medical Officer and
VP of Clinical Research. &#147;Data from earlier clinical trials involving the Company&#146;s proprietary
HuCNS-SC&#174; human neural stem cells have demonstrated an early signal of biological activity in
multiple disease indications. Our earlier Phase I/II clinical trial in chronic thoracic spinal cord
injury showed measureable gains, while the Phase I/II clinical trial in geographic atrophy showed a
positive safety profile and favorable preliminary efficacy. Additionally, a Phase I study in
children with Batten&#146;s disease showed that transplantation of the cells into the brain was safe and
resulted in long term survival of the cells.&#148;


<P align="left" style="font-size: 11pt">Dr.&nbsp;Huhn continued, &#147;Even in the Pathway Study, we believe we see a biological signal in many of
the patients. Equally important, the first cohort of the study also confirmed the safety of cell
administration into the cervical cord. The collective human data we have generated across all of
our studies reinforce our belief that our cells have an excellent safety profile and that there are
neurological and retinal disorders with unmet need that may be helped by cell transplant.
Unfortunately, the Company does not have the resources to implement changes in our development
program to permit further investigation.&#148;


<P align="left" style="font-size: 11pt">&#147;That we did not see significant recovery of motor functions in the Pathway Study is disappointing
given the Company&#146;s nearly complete restoration of motor and sensory functions with HuCNS-SC cells
in spinal cord injured immunodeficient mice, the recovery of sensory responses in patients with
thoracic spinal cord injury, and the many other encouraging clinical and preclinical studies with
these cells,&#148; added Dr.&nbsp;Irv Weissman, a Director and co-founder.&nbsp; &#147;Given the collective strength of
past data with these cells, we sincerely hope others will pick up the many questions we have about
the variability of results seen in the Pathway Study.&nbsp; Naturally, over the next few weeks, we will
endeavor to find a party able to continue the development of this very promising technology,&nbsp;which
is so important not only for current and future patients with these devastating diseases, but also
for the field of brain stem and progenitor cell therapies.&#148;&nbsp;


<P align="left" style="font-size: 11pt">&#147;We would like to thank the patients who participated in the Pathway Study as well as their
families and caregivers. Spinal cord injury is one of the most devastating injuries to the central
nervous system and any effort to help advance or investigate a potential therapy is worthwhile. The
Company would also like to thank our clinical trial investigators and their teams, who have shared
our mission in helping these patients. The Company will work with the clinical sites to suspend the
trial activities and detailed information will be provided to patients in the trial regarding their
participation,&#148; concluded Dr.&nbsp;Huhn.


<P align="left" style="font-size: 11pt"><B>The Pathway Study</B>


<P align="left" style="font-size: 11pt">The Pathway Study was a single blind, randomized, controlled clinical trial investigating the use
of the Company&#146;s proprietary HuCNS-SC human neural stem cells for the treatment of chronic spinal
cord injuries (SCI). Patients eligible for the study had complete loss of motor control below the
level of injury, the most severe degree of SCI as defined by the American Spinal Injury Association
Impairment Scale (AIS). Clinicians used both ISNCSCI (International Standards for Neurological
Classification of Spinal Cord Injury) and GRASSP (Graded Assessment of Strength Sensibility and
Prehension) measures to establish a pre-transplant baseline for each patient and to assess
post-transplant progress. The goal of the Pathway Study was to demonstrate improved upper extremity
motor function and fine motor skills.


<P align="left" style="font-size: 11pt"><B>Interim Analysis</B>


<P align="left" style="font-size: 11pt">In performing the interim analysis of Cohort II, an Interim Analysis Data Monitoring Committee
consisting of three leading clinicians in the spinal cord injury field, reviewed the accrued data
to date against specific clinically relevant criteria linked to achieving the statistically
significant result for improving motor strength and function in treated patients. Following this
analysis, the IA-DMC concluded that the data failed the futility criteria established for the
interim analysis and recommended cessation of the study. The Company took the IA-DMC&#146;s
recommendation under advisement in making its decision to terminate the Pathway Study.


<P align="left" style="font-size: 11pt"><B>Company to Initiate Orderly Wind Down</B>


<P align="left" style="font-size: 11pt">The Company also announced that, in light of the decision to terminate the Pathway Study, the
Company&#146;s available strategic alternatives and its current cash position, the Board of Directors
approved a plan to wind down the Company. As part of this process, the Company will evaluate
opportunities to monetize its intellectual property, including data collected in its studies and
trade secrets, as well as the transfer of its proprietary HuCNS-SC cells and other assets through a
potential sale. The Company will not proceed with its earlier plans to conduct a rights offering,
for which it had filed a registration statement with the SEC.


<P align="left" style="font-size: 11pt">As of May&nbsp;31, 2016, the Company had cash and cash equivalents of approximately $5.5&nbsp;million. The
Company cannot determine with certainty the amount of any liquidating distribution to its
stockholders and it is possible that there will be no liquidating distribution to stockholders. The
amount of any cash distributed to its stockholders will depend upon, among other things, the
Company&#146;s current liquid assets offset by its known and unknown liabilities as well as operating
expenses associated with the wind down.


<P align="left" style="font-size: 11pt">&#147;We are extremely disappointed with the results of our Pathway Study, which we had hoped to be the
first clinical program involving cellular transplantation to meaningfully improve motor function in
patients with chronic spinal cord injury,&#148; said Dr.&nbsp;Ian Massey, President and Chief Executive
Officer. &#147;However, we continue to feel immense pride over the contributions we have made to the
stem cell research field, and we are confident that the progress we made will be instrumental in
future studies in this area. The other directors and I are also very appreciative of our employees
for their hard work and dedication to our mission, and thankful to the scientific community and our
stockholders for their support through the years.&#148;


<P align="left" style="font-size: 11pt"><B>ISSCR 2016 Annual Meeting</B>


<P align="left" style="font-size: 11pt">The Company will attend the 14<sup>th</sup> Annual Meeting of the International Society for Stem
Cell Research (ISSCR)&nbsp;in San Francisco, California, on June&nbsp;23. The Company will present Cohort I
data from the Pathway Study and its interim analysis outcome.


<P align="left" style="font-size: 11pt">Further information about&nbsp;StemCells, Inc., including its preclinical and clinical studies,&nbsp;is
available at <U>http://www.stemcellsinc.com</U>.


<P align="left" style="font-size: 11pt"><I>Apart from statements of historical fact, the text of this press release constitutes
forward-looking statements within the meaning of the U.S. securities laws, and is subject to the
safe harbors created therein. These statements include, but are not limited to, statements
regarding the future business operations of&nbsp;StemCells, Inc.&nbsp;(the &#147;Company&#148;), the prospect for the
successful divestiture of any of the Company&#146;s assets, the possibility of a liquidating
distribution to Company stockholders, and the ability of the Company to pay its creditors and
successfully complete an orderly wind down. These forward-looking statements speak only as of the
date of this news release. The Company does not undertake to update any of these forward-looking
statements to reflect events or circumstances that occur after the date hereof. Such statements
reflect management&#146;s current views and are based on certain assumptions that may or may not
ultimately prove valid. The Company&#146;s actual results may vary materially from those contemplated in
such forward-looking statements due to risks and uncertainties to which the Company is subject,
including risks whether the&nbsp;FDA&nbsp;and other applicable regulatory agencies will support the Company&#146;s
plans to discontinue its currently active clinical studies; uncertainty as to whether HuCNS-SC
cells will prove safe and not cause tumors or other adverse side effects in the patients enrolled
in the Company&#146;s clinical studies; uncertainties whether the Company&#146;s stock will continue to be
listed on any securities exchange; litigation uncertainties; uncertainties regarding the Company&#146;s
plans to wind down operations; uncertainties regarding the validity, enforceability and potential
value of the Company&#146;s patents; uncertainties as to whether the Company will be able to continue to
pay its obligations in the ordinary course of business as they come due; and other factors that are
described under the heading &#147;Risk Factors&#148; in the Company&#146;s Annual Report on </I><I>Form 10-K</I><I> for the year
ended&nbsp;December&nbsp;31, 2015.</I>


<P align="left" style="font-size: 11pt"><B>CONTACT:</B>


<P align="left" style="font-size: 11pt">INVESTOR CONTACT:


<P align="left" style="font-size: 11pt">Greg Schiffman
<BR>
StemCells, Inc.
<BR>
Chief Financial Officer
<BR>
(510)&nbsp;456-4128


<P align="left" style="font-size: 11pt">Robert Haag
<BR>
Managing Director
<BR>
IRTH Communications
<BR>
STEM@irthcommunications.com
<BR>
1-866-976-4784


<P align="left" style="font-size: 11pt">MEDIA CONTACT:


<P align="left" style="font-size: 11pt">Lena Evans
<BR>
Russo Partners
<BR>
(212)&nbsp;845-4262


<P align="left" style="font-size: 11pt">Kelly Sullivan / Eric Brielmann
<BR>
Joele Frank Wilkinson Brimmer Katcher
<BR>
212-355-4449



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