Asterias Biotherapeutics, Inc., a Subsidiary of BioTime, Inc., Acquires Geron’s Embryonic Stem Cell Assets

  Asterias Biotherapeutics, Inc., a Subsidiary of BioTime, Inc., Acquires
  Geron’s Embryonic Stem Cell Assets

Business Wire

MENLO PARK, Calif. & ALAMEDA, Calif. -- October 1, 2013

Asterias Biotherapeutics, Inc. and BioTime, Inc. (NYSE MKT: BTX) jointly
announced today the closing of the transactions under the Asset Contribution
Agreement (the “Agreement”) with Geron Corporation, previously announced on
January 7, 2013, pursuant to which Asterias Biotherapeutics acquired Geron’s
human embryonic stem (hES) cell assets, as well as rights to use certain human
embryonic stem cell lines, minority stakes in two of BioTime's subsidiaries
and stock from BioTime.

Assets Contributed to Asterias by Geron

Under the terms of the Agreement, Geron has contributed to Asterias its stem
cell intellectual property, multiple lots of OPC1 drug product (hES
cell-derived oligodendrocytes) used in the world’s first human clinical trial
of hES-derived cells in subacute spinal cord injury, multiple lots of hESC
manufacturing cell banks - the starting material to manufacture additional
lots of OPC1 drug product and to produce dendritric cells for cancer
immunotherapy, chondrocytes for cartilage and disc repair, and cardiomyocytes
for heart disease. Geron has also contributed all of the clinical and
regulatory documents pertaining to the OPC1 and VAC1 (autologous dendritic
cells) clinical trials, as well as a series of stem-cell-related out-licenses.
Asterias has entered into an exclusive sublicense with Geron for using
telomerase as an antigen for the VAC1 and VAC2 (hES-derived dendritic cells)
product candidates.

Assets Contributed to Asterias by BioTime

BioTime has previously loaned Asterias $5 million in cash, which indebtedness
was cancelled as part of the closing of the transaction. Under the terms of
the Agreement, BioTime contributed to Asterias 8,902,077 BioTime common
shares, rights to use certain clinical grade hES cell lines, a sublicense to
use certain patents for stem cell differentiation and minority stakes in two
of BioTime’s subsidiaries, Orthocyte Corporation and Cell Cure Neurosciences
Ltd. In addition, BioTime has contributed to Asterias 5-year warrants to
purchase 5,000,000 common shares of BioTime at an exercise price of $5.00 per
share (“BioTime Warrants”) which will be distributed by Asterias on a pro rata
basis to holders of its Series A common stock, as further described below.

The assets contributed under the Agreement provide Asterias with four cell
lines, each with animal proof of concept, from which multiple therapeutic
product candidates may be selected for development indications as summarized
below.

  *Neurology – An initial Phase 1 safety study in spinal cord injury has been
    completed with follow-on opportunities in larger indications in Multiple
    Sclerosis and stroke.
  *Oncology – A Phase 2/3 ready cancer vaccine (VAC1) with an opportunity to
    continue the development of a second approach using dendritic cells
    derived from hESCs (VAC2).
  *Orthopedics – Opportunity to continue the development of hESC derived
    chondrocytes to regenerate articular cartilage to address osteoarthritis.
  *Cardiovascular – Opportunity to continue the development of hESC-derived
    cardiomyocytes for heart failure and myocardial infarction.

Consideration to Geron and BioTime from Asterias; Distributions by Geron and
Asterias

Under the terms of the Agreement, Geron has received from Asterias 6,537,779
shares of Asterias Series A common stock. Subject to applicable law, Geron
will distribute these shares on a pro rata basis to Geron stockholders as
promptly as practicable, other than with respect to fractional shares and with
respect to stockholders residing in certain to-be-determined excluded
jurisdictions, who will instead receive cash on a pro rata basis. As promptly
as practicable following the distribution of the Asterias Series A common
stock by Geron to its stockholders, Asterias will distribute the BioTime
Warrants on a pro rata basis to the holders of Asterias Series A common stock.

Asterias will also pay to Geron royalties on the sale of products that are
commercialized, if any, in reliance on Geron patents contributed or licensed
to Asterias.

Asterias has issued to BioTime 21,773,340 shares of Asterias Series B common
stock and 3-year warrants to purchase 3,150,000 additional shares of Asterias
Series B common stock at an exercise price of $5.00 per share.

The Romulus Films, Ltd. Investment

In a related transaction, Asterias has obtained $5 million in equity financing
pursuant to a Stock and Warrant Purchase Agreement with Romulus Films, Ltd.,
in exchange for 2,136,000 shares of Asterias Series B common stock, plus
warrants to purchase approximately 350,000 additional shares of Asterias
Series B common shares at an exercise price of $5.00 per share, with a three
year term. Earlier this year, Romulus invested $5 million in BioTime, which
BioTime used to fund the loan to Asterias for its operations.

Ownership of Asterias Terms of Asterias Series A and Series B Common Stock;
Trading Markets

Upon the distributions of the Series A common stock to Geron’s stockholders
described above, BioTime will own approximately 71.6%, Geron stockholders will
own approximately 21.4%, and Romulus will own approximately 7% of the
outstanding Asterias common stock. BioTime and Romulus could increase their
collective ownership in Asterias by approximately 2.2% if they choose to
exercise all of their warrants, which would reduce the Geron stockholders’
ownership in Asterias to approximately 19.2%.

The terms of the Asterias Series A and Series B common stock are identical,
except that Asterias is entitled to make certain distributions or pay
dividends on its Series A common stock without making a distribution or paying
a dividend on its Series B common stock. The Series B common stock will be
convertible into Series A common stock following the distribution of the
BioTime Warrants described above.

Asterias expects that prices for the Asterias Series A common stock will be
quoted on the OTC Bulletin Board following the distribution of the Asterias
Series A common stock to Geron’s stockholders. BioTime has applied to list the
BioTime Warrants for trading on the NYSE MKT, where BioTime common shares are
traded.

Kaye Scholer LLP and Thompson, Welch, Soroko & Gilbert LLP acted as legal
counsel to Asterias and BioTime in connection with the transaction.

A registration statement on Form S-1 relating to the distribution of Asterias
Series A common stock by Geron to its stockholders was previously filed by
Asterias with the Securities and Exchange Commission (“SEC”) and is effective.
The registration statement is available at the SEC’s web site at
http://www.sec.gov,.

A registration statement on Form S-3 relating to the BioTime common shares
contributed to Asterias and the BioTime Warrants to be distributed to the
holders of Asterias Series A common stock was previously filed with the SEC
and is effective. The registration statement is available at the SEC’s web
site at http://www.sec.gov.

This press release shall not constitute an offer to sell or the solicitation
of an offer to buy any of the securities described above, nor shall there be
any sale of any such securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of such jurisdiction.

About Asterias

Asterias Biotherapeutics is a subsidiary of BioTime, Inc., whose first
acquisition was the stem cell assets of Geron Corporation, which was completed
on October 1, 2013. That acquisition includes Geron’s entire cell therapy
intellectual property portfolio, existing contracts and license agreements
related to their stem cell programs, INDs for OPC1 and VAC1 cell therapies,
master cell banks of hESCs and therapeutic cells manufactured under cGMP,
research cell banks, customized reagents and equipment, and banks of
cGMP-manufactured OPC1 drug product used in Geron’s Phase 1 trial in subacute
spinal cord injury, the world’s first human clinical trial of hESC-derived
cells.

About BioTime

BioTime is a biotechnology company engaged in research and product development
in the field of regenerative medicine. Regenerative medicine refers to
therapies based on stem cell technology that are designed to rebuild cell and
tissue function lost due to degenerative disease or injury. BioTime’s focus is
on pluripotent stem cell technology based on human embryonic stem (“hES”)
cells and induced pluripotent stem (“iPS”) cells. hES and iPS cells provide a
means of manufacturing every cell type in the human body and therefore show
considerable promise for the development of a number of new therapeutic
products. BioTime’s therapeutic and research products include a wide array of
proprietary PureStem™ progenitors, HyStem^® hydrogels, culture media, and
differentiation kits. BioTime is developing Renevia™ (a HyStem^® product) as a
biocompatible, implantable hyaluronan and collagen-based matrix for cell
delivery in human clinical applications. In addition, BioTime has developed
Hextend^®, a blood plasma volume expander for use in surgery, emergency trauma
treatment and other applications. Hextend^® is manufactured and distributed in
the U.S. by Hospira, Inc. and in South Korea by CJ CheilJedang Corporation
under exclusive licensing agreements.

BioTime is also developing stem cell and other products for research,
therapeutic, and diagnostic use through its subsidiaries:

  *OncoCyte Corporation is developing products and technologies to diagnose
    and treat cancer.
  *ES Cell International Pte Ltd., a Singapore private limited company,
    develops hES products for research use.
  *OrthoCyte Corporation is developing therapies to treat orthopedic
    disorders, diseases and injuries.
  *ReCyte Therapeutics, Inc. is developing therapies to treat a variety of
    blood and lymphatic vascular disorders, as well as products for research
    using iPS and other cell reprogramming technology.
  *Cell Cure Neurosciences Ltd. is an Israel-based biotechnology company
    focused on developing stem cell-based therapies for retinal and
    neurological degenerative diseases. Its lead product is OpRegen^® for the
    treatment of macular degeneration.
  *LifeMap Sciences, Inc. markets, sells and distributes GeneCards^®, the
    leading human gene database, the leading human gene database, as part of
    an integrated database suite that also includes the LifeMap Discovery™
    database of embryonic development, stem cell research and regenerative
    medicine, and MalaCards, the human disease database. LifeMap Sciences also
    markets BioTime research products and PanDaTox, an innovative, recently
    developed, searchable database that can aid in the discovery of new
    antibiotics and biotechnologically beneficial products.
  *Asterias Biotherapeutics, Inc. is a newly formed subsidiary whose first
    acquisition was the stem cell assets of Geron Corporation, including
    patents and other intellectual property, biological materials, reagents
    and equipment for the development of new therapeutic products for
    regenerative medicine.

To receive ongoing BioTime corporate communications, please click on the
following link to join our email alert list: http://news.biotimeinc.com.

Forward-Looking Statements

Statements pertaining to future financial and/or operating results, future
growth in research, technology, clinical development, and potential
opportunities for Asterias and for BioTime and its subsidiaries, along with
other statements about the future expectations, beliefs, goals, plans, or
prospects expressed by management constitute forward-looking statements. Any
statements that are not historical fact (including, but not limited to
statements that contain words such as "will," "believes," "plans,"
"anticipates," "expects," "estimates") should also be considered to be
forward-looking statements. Forward-looking statements involve risks and
uncertainties, including, without limitation, risks inherent in the
development and/or commercialization of potential products, uncertainty in the
results of clinical trials or regulatory approvals, need and ability to obtain
future capital, and maintenance of intellectual property rights. Actual
results may differ materially from the results anticipated in these
forward-looking statements and as such should be evaluated together with the
many uncertainties that affect the business of Asterias or BioTime and its
subsidiaries, particularly those mentioned in the cautionary statements found
in Asterias’ and BioTime's Securities and Exchange Commission filings.
Asterias and BioTime disclaim any intent or obligation to update these
forward-looking statements.

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Contact:

BioTime, Inc.
Lesley Stolz, Ph.D., 510-521-3390, ext. 367
Executive Vice President, Corporate Development
lstolz@biotimemail.com
or
Judith Segall, 510-521-3390, ext. 301
jsegall@biotimemail.com
or
Asterias Biotherapeutics, Inc.
Mary Ann Dunmire, 650-433-2900
mdunmire@asteriasbio.com
 
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