License Agreement

Stem Cell Sciences plc
20 February 2007


20 February 2007

  STEM CELL SCIENCES LICENSES NEURAL STEM CELL TECHNOLOGY TO MERCK & CO., INC.
        AGREEMENT INCLUDES LICENSE FEE AND DEVELOPMENT MILESTONE PAYMENTS
                  ("Stem Cell Sciences", "SCS" or "the Group")

Stem Cell Sciences plc, (LSE: AIM, "STEM") has licensed the use of their novel
mouse neural stem cell technology to Merck & Co., Inc. for research use.
Financial terms were not disclosed, but include a signing fee and milestone
payments.

SCS believes NS cells have potential broad research applications. This
includes their use in target identification/validation studies, as well as in
small molecule library screening applications.

The cells and technology will be supplied by SCS from its newly opened facility
in Cambridge, UK, where the Group offers a range of services to the
bio-pharmaceutical industry through its SC Services business unit. With its
state of the art automated cell culture equipment, SC Services provides the
capability for the routine growth of stem cells including NS cells in the
numbers required for high content drug screens and assays. Furthermore, SC
Services offers conversion of serum based cell lines to serum free systems,
specialist genetic engineering and contract cell production.

In commenting on the agreement, David Dodd, Chairman of SCS, said: "We're very
pleased to see our mouse neural stem cells being licensed by Merck and others
throughout the pharmaceutical industry. Our strategy includes working with key
partners to expand the widespread use of stem cells in drug discovery.

                                     - Ends-

For further information, please contact:

Stem Cell Sciences plc
Peter Mountford, President and CEO                                 0131 662 9829
Hugh Ilyine, Vice President and Chief Operating Officer
Sue Furber, Director of Finance & Company Secretary

Weber Shandwick Financial
Louise Robson or James White                                       020 7067 0700

About Stem Cell Sciences plc

Stem Cell Sciences plc (SCS, AIM: STEM) is a global biotechnology company,
established in Melbourne, Australia in 1994, providing products in the
burgeoning stem cell research and drug discovery markets, in addition to the
targeted development of cell-based therapies for neurodegenerative disease and
injury.

The Company has established a leading intellectual property (IP) and technology
portfolio that enables the commercial application of stem cells in drug
discovery, providing the Company with early-stage revenue streams and technology
development for at scale cell production of SCS cell-based therapeutics. SCS
principal focus is in neurological disease. Revenues in the neurotech market,
including pharmaceuticals, devices and diagnostics, grew 10% in 2005 to US$110
billion - Neurotech Insights, Volume 2/3 April 30 2006.

SCS operates as a group of independent operations with laboratories in Scotland,
Japan and Australia, each of which is affiliated with an academic centre of
excellence. These include the Institute of Stem Cell Research (ISCR), Edinburgh,
UK, RIKEN Centre for Development Biology, Kobe, Japan and the Australian Stem
Cell Centre, Melbourne, Australia.

SCS has four business units focused on key sustainable business strategies.

SC Proven(R) provides cell culture media (liquid formulations) and research
reagents that enable the growth and differentiation of stem cells. Commercially
available products include a novel, serum-free, feeder-free mouse stem cell
growth medium, and a novel animal component free human stem cell medium.  These
are both exclusively licensed for manufacture and marketing to Chemicon, part of
Millipore Corporation.

SC Licensing licenses SCS proprietary technologies, such as Internal Ribosome
Entry Site (IRES) and Stem Cell Selection, for application in laboratory-based
research and discovery. SCS has licensed technology to major pharmaceutical and
biotechnology companies including Pfizer, Sanofi Aventis, GSK, Deltagen Inc and
Lexicon Genetics Inc.

SC Services provides specialised stem cell production for basic research and
drug discovery, including high-throughput applications.

SC Therapies' goal is to develop safe and effective cell-based therapies for
currently incurable diseases. SCS is conducting preclinical evaluations of its
neural stem cell lines in a number of therapeutic applications. The first
preclinical programme being undertaken by SCS is in spinal cord injury repair.
Its Japanese affiliate SCS KK will conduct preclinical studies for the treatment
of Duchenne Muscular Dystrophy in 2007-8.

For further information on the company please visit: www.stemcellsciences.com




                      This information is provided by RNS
            The company news service from the London Stock Exchange
  ND
AGRKKLFFDLBFBBX