StemCells presented data which show that two years after transplantation of the company's proprietary HuCNS-SC cells into patients with Pelizaeus-Merzbacher disease, or PMD, the evidence of myelination, by MRI, is more pronounced compared to one year post-transplantation, the gains in neurological function reported after one year were maintained, and there were no safety concerns. Patients with PMD have a defective gene which leads to insufficient myelin in the brain, resulting in progressive loss of neurological function and death. The neurological and MRI changes suggest a departure from the natural history of the disease and may represent signals of a clinical effect. In the Company's Phase I trial, which was conducted at the University of California, San Francisco, four patients with connatal PMD, the most severe form of the disease, were enrolled and transplanted with HuCNS-SC cells. The patients were followed for twelve months after transplantation, during which time they underwent intensive neurological assessments and magnetic resonance imaging at regular intervals. The Phase I trial results indicate a favorable safety profile for the HuCNS-SC cells and the transplantation procedure. Analysis of the MRI data showed changes consistent with increased myelination in the region of the transplantation, which progressed over time and persisted after the withdrawal of immunosuppression at nine months. The results support the conclusion of durable cell engraftment and donor cell-derived myelin in the transplanted patients' brains.