International Stem Cell Corporation and Novocell, Inc. Collaborate to Test Human Parthenogenetic Stem Cells for Production of Pancreatic Islet Cells

Oceanside, Calif. — [July 17, 2008]— International Stem Cell Corporation (OTCBB: ISCO) announced today a collaboration with Novocell Inc. (La Jolla, CA) to use ISCO’s human parthenogenetic stem cell lines for differentiation to Human pancreatic islet cells. The studies will be directed by Nikolay Turovets, PhD, Director, Research and Therapeutic Development at ISCO in collaboration with Novocell scientists.

ISCO’s unique stem cells offer a solution for two of the most difficult problems facing stem cell therapy. They are the first step in preventing the rejection of implanted cells by the patient’s own immune system and they provide an alternative to embryonic stem cells that does not involve destroying human embryos.

Jeffrey Janus, ISCO’s President, said, “Studies show that ISCO’s cells (called human parthenogenetic stem cells) share with conventional human embryonic stem cells the ability to differentiate into all tissue types, however they have the singular significant advantage of being immune matched at the MHC locus to hundreds of millions of people. As with immune-matched whole organs, differentiated cells obtained using these lines may provide improved transplant acceptance to large segments of the population as opposed to a few individuals. In addition, ISCO’s stem cells are created from unfertilized human eggs and do not involve the destruction of fertilized embryos.”

Novocell has developed technology to direct embryonic stem cells to become pancreatic islet cells that have been shown to be effective in treating diabetes in animals. The combined technologies of the two companies may therefore result in therapeutic cells with improved immune properties for eventual treatment of larger segments of the diabetic population.

A description of ISCO’s human parthenogenetic stem cells and their potential to improve transplantation was reported in ISCO’s peer review paper published December 19, 2007 in the online edition of Cloning and Stem Cells Journal: http://www.liebertonline.com/doi/pdfplus/10.1089/clo.2007.0063.

Elena Revazova, M.D., Ph.D., ISCO’s Chief Scientific Officer, stated, “ISCO has created a human parthenogenetic stem cell line called phSC-Hhom-4. Cells derived from this line have the potential to provide improved graft acceptance. We intend to develop additional homozygous lines that cover other major MHC types so that differentiated cell products will be better matched for transplantation into millions of individuals of differing sexes, ages and racial groups."

“Our business model,” added Mr. Kenneth Aldrich, ISCO’s Chairman and CEO, “is to make our cell lines and intellectual property easily available, and thereby become a supplier of therapeutic cells for use by patients around the world. To reach that goal, our intent is to distribute our human parthenogenetic stem cell lines to as many qualified researchers as possible so they may develop cures to as many human diseases as rapidly as possible.”

About Novocell:
Novocell, Inc. is a stem cell engineering company, with research operations in San Diego, California and Athens, Georgia, dedicated to creating, delivering and commercializing cell and drug therapies for diabetes and other chronic diseases. Novocell has three primary technologies: stem cell engineering, cell encapsulation and drug discovery. The Company was founded in 1999 and merged with CyThera, Inc. and BresaGen, Inc. in 2004. For more information, please visit www.novocell.com.

ABOUT INTERNATIONAL STEM CELL CORPORATION (ISCO.OB):

International Stem Cell Corporation is a California biotechnology company focused on developing therapeutic and research products. ISCO’s technology, Parthenogenesis, results in the creation of pluripotent human stem cell lines from unfertilized human eggs. ISCO scientists have created the first Parthenogenetic homozygous stem cell line (phSC-Hhom-4) that can be a source of therapeutic cells that will not be immune rejected after transplantation into millions of individuals of differing sexes, ages and racial groups. These advancements offer the potential to create the first true “Stem Cell Bank” and address ethical issues by eliminating the need to use or destroy fertilized embryos. ISCO also produces and markets specialized cells and growth media worldwide for therapeutic research through its subsidiary Lifeline Cell Technology. For more information, visit the ISCO website at: www.internationalstemcell.com.

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Forward-Looking Statements

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Key Words: Stem Cells, Biotechnology, Parthenogenesis, Diabetes

Contacts:

International Stem Cell Corporation

Jeffrey Janus, President

janusj@lifelinecelltech.com

760-940-6383

Or

William Adams, Chief Financial Officer

wadams@intlstemcell.com

760-940-6383