REVISED: BrainCells Inc. Expands Series B Financing to $50 Million

Friday, April 18, 2008 General News
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SAN DIEGO, April 17 BrainCells Inc. (BCI), abiopharmaceutical company utilizing its platform technology to identify anddevelop compounds that promote the growth of new neurons for the treatment ofcentral nervous system (CNS) diseases, announced today that it raised anadditional $20 million in an extension of its Series B financing, bringing thetotal to $50 million. New investor, New Enterprise Associates (NEA), alongwith current investors and Alexandria Real Estate Equities, Inc. participatedin the extension. Other investors that participated in the Series B includedMedImmune Ventures, Bay City Capital, Oxford Bioscience Partners, TechnologyPartners, Pappas Ventures and NeuroVentures. The financing will be used tocontinue clinical development of BCI's product candidates including a Phase 2trial with BCI-540, and to identify additional assets to further expand itspipeline.

As part of the financing extension, BCI announced the addition of ChuckNewhall, general partner and co-founder of NEA, to its Board of Directors.Prior to NEA, he was a Vice President at T. Rowe Price Associates. Beforethat, Mr. Newhall founded the Mid-Atlantic Venture Capital Association (MAVA)and currently serves as Chairman Emeritus. His board memberships include Bravoby ElderHealth, CoGenesys, Hospital Partners of America, Pharmos, Sensors forMedicine & Science, Supernus Pharmaceuticals, TargetRx, Trine Pharmaceuticals,and Vitae Pharmaceuticals.

"Only weeks after closing our first round of the Series B financing, weare thrilled with the result of the second close and bringing in the supportof NEA, another high-quality investor," said Jim Schoeneck, CEO of BCI."Chuck's decades of experience in the industry will be a tremendous asset tothe company as we build momentum in the clinic this year."

BCI recently initiated a Phase 2a clinical trial with its lead productcandidate, BCI-540, for the treatment of depression. The Company in-licensedBCI-540 in August 2006 and used its proprietary platform technology toidentify the compound's neurogenic profile, which is comparable toantidepressants on the market today, but that has shown in pre-clinicalstudies to not affect serotonin levels, which could avoid the negative sideeffects associated with existing therapies.

"With an eye on innovative companies providing solutions for clinicallyunmet needs, we find BCI's ability to leverage its neurogenic screeningtechnology to identify and develop new treatments for CNS disorders to beextremely promising," said Chuck Newhall, general partner and co-founder ofNEA. "I look forward to joining the BCI board and seeing the company through atransformational year with several anticipated clinical milestones."

About BrainCells Inc.

BrainCells Inc. (BCI) is a San Diego-based drug discovery and developmentcompany that is applying its proprietary neurogenesis platform technology toidentify and reposition compounds for the treatment of central nervous system(CNS) diseases. Neurogenesis is the process by which endogenous stem cells inthe adult human brain produce new brain tissue, including neurons. With itspredictive screening platform, BCI can direct the selection and development ofneurogenic compounds, increasing the opportunity for successful clinicaltrials in a variety of CNS indications. For more information, visit Contact: Kim Richards Porter Novelli Life Sciences 619-849-5377

SOURCE BrainCells Inc.

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