COBE BCT and Aastrom Biosciences to end distribution agreement

COBE BCT and Aastrom Biosciences to end distribution agreement Aastrom Biosciences, Inc. and COBE BCT, a Gambro subsidiary, have agreed to end their product distribution agreement concerning COBE's marketing and distribution rights for Aastrom's system for stem cell therapy. Edward C. Wood, President of COBE BCT stated: "We will continue our core businesses and reallocate even more of our resources to our largest market segment, transfusion medicine, as we launch our new COBE Trima Automated Blood Collection System." Mr. Wood added: "While we have been committed to the TM development of the AastromReplicell System for the stem cell therapy field, the recent changes and progress in the cell therapy arena have required a new approach with this novel product." The joint Aastrom - Gambro press release is enclosed. For further information: Edward C. Wood, President, COBE BCT Inc., phone +1-303-232 6800 Bengt Modéer, Senior Vice President, Corporate Communications, +46-8-613 65 00, +46-70-513 65 33 Gambro is an international medical-technology group with revenues of approximately SEK 18 billion and about 17,000 employees in some 40 countries. COBE BCT AND AASTROM BIOSCIENCES TO END FIELD-SPECIFIC DISTRIBUTION AGREEMENT -- Arrangement will Enable Aastrom to Consolidate TM Marketing of AastromReplicell System Product Line -- Ann Arbor, Michigan, November 16, 1998 -- Aastrom Biosciences, Inc. (Nasdaq: ASTM) and Cobe BCT, Inc. (Cobe) today announced that they have agreed to end their 1993 product Distribution Agreement (Agreement). The Agreement provided Cobe with worldwide marketing and distribution rights for the TM AastromReplicell Cell Production System (System) and related therapy kits for use in the field of stem cell therapy. The two companies have also agreed to a transition process that will maintain Cobe's role in supporting the initial launch in Europe of the TM AastromReplicell System and the first two stem cell therapy kits: SC-1 for the production of bone marrow stem cells and CB-1 for the expansion of umbilical cord blood cells. Under the revised plan, Cobe will provide import/export distribution and service support to Aastrom who will lead the customer marketing effort. This action, bringing rights to all fields of use to Aastrom, will allow a TM consolidated marketing plan to be implemented for the AastromReplicell System line of therapy kits, which are under development for multiple TM therapeutic indications. The AastromReplicell System is an automated clinical system designed to enable hospitals to produce patient-specific cells for use in the treatment of a broad range of diseases. Many of these potential applications are outside the scope of the 1993 Agreement, and outside of Cobe's current area of focus. With diverse fields of use, the overall market development and customer interface plans will benefit from the consolidation of the product line under a single disease-specific program. For example, the TM marketing program for AastromReplicell System therapy kits for both stem cell therapy and cellular immunotherapy, can now be combined for oncology applications. Edward C. Wood, President of Cobe BCT stated: "We will continue our core businesses and reallocate even more of our resources to our largest market segment, transfusion medicine, as we launch our new Cobe Trima Automated Blood Collection System." Mr. Wood added: "While we have been committed to the TM development of the AastromReplicell System for the stem cell therapy field, the recent changes and progress in the cell therapy arena have required a new approach with this novel product." R. Douglas Armstrong, Ph.D., President and CEO of Aastrom commented on the timing of this change. "The decision to consolidate marketing and distribution rights at this time is to avoid later customer confusion in the marketplace that would have resulted from different distributors of different components TM of the AastromReplicell System." Dr. Armstrong also noted: "The new transition agreement with Cobe will allow our initial European product launch to be carried out using Cobe's distribution infrastructure, as we build toward our more consolidated marketing plans." As part of the termination, Cobe will return to Aastrom 825,000 shares of Aastrom Common Stock currently held by Cobe and Cobe has agreed not to sell any of its remaining approximately 2.4 million shares until at least January 1, 2001. The companies noted that no payments were owed or anticipated under the 1993 Agreement, so the termination has no direct effect on Aastrom or Cobe's planned investments. Cobe BCT is a division company of Gambro, and is a world leader in blood cell processing products and technology. Aastrom Biosciences, Inc. is pioneering the development of proprietary clinical systems, including the TM AastromReplicell System, which is an experimental device and is not available for sale at this time in the U.S. This document contains forward-looking statements, including without limitation, statements concerning product development objectives, clinical trial results, commercial introduction, and marketing and distribution plans TM for the AastromReplicell System, which involve certain risks and uncertainties. The forward-looking statements are also identified through use of the words "anticipates," "believes," "expects," "plans," and other words of similar meaning. Actual results may differ significantly from the expectations contained in the forward-looking statements. Among the factors that may result in differences are the results obtained from clinical trial and development activities, regulatory approval requirements, the availability of resources and the degree to which the Aastrom's products achieve market acceptance. These and other significant factors are discussed in greater detail in Aastrom's Annual Report on Form-10K and other filings with the Securities and Exchange Commission. Contacts for Aastrom: Contacts for Cobe BCT: Todd E. Simpson, VP Finance Edward C. Wood, President & Administration, CFO Cobe BCT Aastrom Biosciences, Inc. 303-232-6800 734-930-5777 Investor & Media Contacts: Bengt Modeer Francesca T. DeVellis Gambro AB Feinstein Kean Partners Inc. 011-46-8-613-6500 617-577-8110 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1998/11/16/19981116BIT00140/bit0001.doc http://www.bit.se/bitonline/1998/11/16/19981116BIT00140/bit0002.pdf