Cytori Therapeutics : Cell Therapy™ Leads to Improved Corneal Wound Healing and Reduced Scarring

Dear Stockholders -

Over the weekend Cytori scientists presented two research papers at the annual meeting of the International Federation of Adipose Therapeutics and Science (iFATS) in San Diego. Both papers highlight research done in preclinical models of corneal injury and hypertrophic scarring and demonstrate how Cytori's cellular therapeutic may improve healing following corneal injury and as well as reduce hypertrophic scarring.

The first presentation titled 'ADIPOSE-DERIVED REGENERATIVE CELLS PROMOTE PROLIFERATION OF CORNEAL EPITHELIAL CELL AND CORNEAL WOUND HEALING'included data showing that tissue culture medium conditioned by Cytori Cell Therapy™ cells increased the viability of serum-starved corneal epithelial cells. Based on these results Cytori scientists led by Visiting Scientist Dr Yoshihiro Nakagawa executed follow-on studies using standard corneal explant organ culture. These studies showed that topical administration of Cytori Cell Therapy™ significantly reduced corneal wound size compared to control treatment.

This finding suggests that Cytori Cell Therapy™ has the potential to improve healing of corneal epithelial injuries. These data align very nicely with preclinical data showing improvement of healing of cutaneous epithelial injuries including those caused by thermal burn. -

The second presentation titled 'AUTOLOGOUS ADIPOSE DERIVED REGENERATIVE CELLS (ADRCS) THERAPY FOR THE PREVENTION AND TREATMENT OF HYPERTROPHIC SCARS USING A RED DUROC PORCINE MODEL' included data indicating that Cytori Cell Therapy mitigates the development of hypertrophic scarring, a major source of morbidity following thermal burn and other cutaneous injuries. This presentation updated and expanded upon early data in this model presented earlier this year at the American Burn Association.

In this study the effect of Cytori's DCCT-10 cell therapy for hypertrophic scarring (HTS), a common consequence of burn injury was assessed. Data demonstrated that delivery of product immediately after injury led to a decrease in skin hardness compared to control wounds. Histological analysis revealed an increase in the number of rete ridges (p<0.001) which are a key feature of the skin acting as an anchor between the epithelium and the dermis. Absence of rete ridges is a well-recognized characteristic of hypertrophic scars. The data further show an increase in elastic fibers length (p<0.05) and a decrease in scar vascularity (p<0.05) following DDCT-10 treatment compared to control. Molecular analysis showed that DDCT-10 up-regulated expression of wound repair-related genes but down-regulated expression of pro-fibrotic ones.

These findings extend our previous work and suggest that the improvement of healing seen following treatment with DCCT-10 extends beyond simple improvements in epithelialization to longer-term improvement in scar and skin function.

Current standard of care for burn wounds now consists of dressings, skin grafts, and skin substitutes. Despite these treatments, patients with severe burns commonly suffer from hypertrophic scarring. Autologous Cell Therapies such as those offered by Cytori may have the potential to improve the quality and rate of wound healing and reduce scarring.

In summary, these reports add to the already strong body of preclinical data supporting the potential of Cytori Cell therapy™, provide us with new models we can use to probe more deeply into mechanism of action, and provide additional support for potential expansion of our ongoing activities supported by BARDA.

Thank you for your support of the company and confidence in our technology and team.

Sincerely,