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Investment agreement for the SynBio project approved at shareholders’ meeting of the Human Stem Cells Institute

September 6, 2011– OJSC HSCI – The Human Stem Cells Institute ("HSCI", MICEX:ISKJ), a Russian company engaged in the development, manufacturing and commercialization of products and services in the realm of cell-based, gene and post-genome technologies, announced today that its Extraordinary General Shareholders' Meeting has approved an Investment agreement for the SynBio project - the first ever international M&A in the global biotech sector initiated by a Russian company. In addition, HSCI's shareholders approved a number of deals in connection with the disposal of intangible assets, which will be submitted in the charter capital of the project company, SynBio LLC.

This special project company has been created to develop and produce innovative (fist-in-class) medicines as well as next-generation pharmaceutical products known as BioBetters. The company plans to develop 9 drugs based on three existing technological platforms. The project will be supported by RUSNANO with participation of top Russian and international companies engaged in biotech/biopharm R&D. HSCI is the largest private co-investor in SynBio.

Commenting on the announcement, HSCI's CEO Artur Isaev said: "As the first ever Russian-initiated cross-border M&A deal in the biotech sector, this is a major event not only for Human Stem Cells Institute and other participants in SynBio, but also for the global biotech industry. By uniting leading UK, German and Russian businesses, with strong financial support from RUSNANO, we believe SynBio has the potential to become a significant global player, while creating substantial value for HSCI shareholders."

HSCI brings to the project intellectual property, including patents, and 44% of SymbioTec GmbH, a German R&D company that specializes in the development of novel therapeutics (including those based on Histone H1.3)

The transfer of patent rights will be carried out in such a way that HSCI will not lose the right to use these inventions for its activities. At the same time, HSCI will not include any of the technologies that were presented during its IPO as main cash flow drivers in the project.

"The creation of R&D partnerships is a worldwide practice, which is actively used by publicly-traded industry leaders", added Artur Isaev. "Drug development demands knowledge and unique experiences, which HSCI and our partners have, along with material resources provided by our strategic investor, Rusnano. Participation in the SynBio project gives HSCI an opportunity to work closely with the world's leading experts, to enter the international market, and to strengthen our position in the biotech sphere." HSCI's EGM was held by absentee voting and votes were no longer accepted after August 31st, 2011.

Full Version of the Press Release (102 kb)

06 September 2011