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                                                                    Exhibit 99.1

(AASTROM BIOSCIENCES LOGO)

P.O. Box 375 - Ann Arbor, Michigan 48106 - Ph: 734-930-5555 - Fax: 734-665-0485
Located at: Domino's Farms, Lobby L

FOR IMMEDIATE RELEASE
- ---------------------


CONTACTS:  Kris M. Maly or                          Kevin McGrath
           Becky Anderson                           Cameron Associates
           Investor Relations Department            Phone: (212) 245-4577
           Aastrom Biosciences, Inc.
           Phone: (734) 930-5777

         AASTROM BIOSCIENCES ANNOUNCES PLANS TO EXPAND BONE GRAFT STUDY
                 BASED ON RESULTS OF SEVERE FRACTURE TREATMENTS

ANN ARBOR, MICHIGAN, OCTOBER 18, 2004 -- Aastrom Biosciences, Inc. (NasdaqSC:
ASTM) and the Institut de Terapia Regenerativa Tissular (ITRT) announced today
that their clinical trial in Barcelona, Spain will be expanded based on initial
results from the first phase of patient treatments. The trial involved 5 patient
treatments using Aastrom's Tissue Repair Cells (TRCs) for the bone graft repair
of severe long bone non-union fractures, and was completed at the Hospital
General de l'Hospitalet, Centro Medico Teknon and Hospital de Barcelona-SCIAS.
The results to date show that Aastrom's TRCs were safe, with no adverse events
reported, and that patients are exhibiting various early stages of healing.
Aastrom will continue monitoring the progressive bone regeneration in these
patients, while expanding the trial to include additional patients and
formalizing a plan for the registration of its TRC product for use in bone graft
surgery in the EU.

This trial, one of three clinical studies of Aastrom's bone graft TRC product
currently underway, was initiated in March 2004 in cooperation with ITRT
(Barcelona, SP), who coordinated the trial implementation. This proof of concept
feasibility clinical trial was designed to evaluate the safety and effectiveness
of the Company's TRCs to regenerate new, healthy bone in the repair of long bone
non-union fractures. All of the patients who received TRC treatment had
previously failed to repair their non-union fractures using standard of care
procedures, during the preceding 6 to 16 months. The results to date are
interim, as complete bone fusion typically takes many months.

The trial was completed under the direction of Principal Investigators, Dr.
Carlos Solano-Puerta and Dr. Lluis Orozco. These physicians reported that each
patient is exhibiting increased mobility and freedom from pain as a result of
the healing process at the fracture site. Non-union fractures often present
problems related to their repair due to the severity of the fracture in which
the bone pieces are completely separated. This type of fracture usually requires
various mechanical fixations and bone graft processes for repair. However,
standard procedures may fail, requiring the patients to undergo additional
surgery and bone grafting approaches. This was the situation for all of the
patients in the Barcelona trial, who having failed to heal their fractures after
standard of care treatments, received TRCs mixed with a synthetic commercial
matrix, directly at the fracture site.

Dr. Lluis Orozco, Scientific Director of ITRT, commented on the study, "We are
very satisfied with the results that we have seen in these first five patient
treatments, and with the process, utilizing Aastrom's Tissue Repair Cell
technology. We are motivated to now expand the trial to treat additional
patients with this new adult stem cell-based approach. We believe the potential
ability of TRCs to eliminate the standard surgical process of autograft bone
chip collection would offer a better procedure for our patients."

"Completing these first 5 patient treatments, and observing positive safety and
patient progress are very important milestones for the Company, and we believe
represent the first such results in the clinic using an ex vivo-produced bone
marrow stem cell product," said R. Douglas Armstrong, Ph.D., Chairman and Chief
Executive Officer of Aastrom. "While additional clinical data must be collected
in continued trials of our TRC product to provide conclusive evidence, we are
confident that this data is sufficient proof of concept for the Company to
aggressively pursue the clinical trials and activities needed for EU product
registration."


                                     -more-


                                        Aastrom-Initial Results-TRC-BG-Barcelona
                                                                October 18, 2004
                                                                          Page 2

Typical bone grafting procedures are used to repair major fractures of legs and
arms, as well as to reconstruct bone in the jaw and to fuse spine vertebrae. The
long-time standard treatment procedure, called autograft, involves surgically
chiseling out bone chips and marrow from the patient's hip to obtain the
necessary quantities of bone graft material. This process generally results in
substantial acute and chronic pain and complications at the hip collection site.
In an attempt to eliminate this clinical problem, various bone matrix
substitutes have been developed and are sometimes used as an alternative to
autograft procedures. These alternatives are not as effective because bone
matrix substitutes lack the cellular components needed to generate bone. In this
study, Aastrom's TRCs, which have been shown to contain large numbers of adult
stem and other cells needed to generate bone, are combined with a synthetic
matrix product, and applied directly at the fracture site. The application of
TRCs is intended to form an optimized bone graft, without the after effects of
the autograft procedure.

ABOUT TISSUE REPAIR CELLS
- -------------------------

Tissue Repair Cells (TRCs) are Aastrom's proprietary mixture of bone marrow stem
and progenitor cells produced using patented single-pass perfusion technology in
the AastromReplicell(R) System. The clinical procedure begins with the
collection of a small sample of bone marrow from the patient's hip in an
outpatient setting. TRCs are then produced in the automated AastromReplicell
System over a 12-day period. It has been demonstrated in the laboratory that
TRCs are able to develop into different types of tissue lineages in response to
inductive signals, including blood, bone, cartilage, adipose and vascular
tubules. In previous clinical trials, TRCs have been shown to be safe and
reliable in regenerating certain normal healthy bone marrow tissues.

ABOUT AASTROM BIOSCIENCES, INC.
- -------------------------------

Aastrom Biosciences, Inc. (NasdaqSC: ASTM) is a regenerative medicine company
developing proprietary adult stem cell-based products for the repair or
generation of damaged human tissues and other medical disorders. Aastrom's
strategic position in the tissue regeneration and cell therapy sectors is
enabled by its proprietary Tissue Repair Cells (TRCs), a mix of bone marrow stem
and progenitor cells, and the AastromReplicell(R) System, an industry-unique
automated cell production platform used to produce cells for clinical use.
Together TRCs and the AastromReplicell System provide a foundation that the
Company is leveraging to produce multiple Prescription Cell Products (PCPs), the
first of which is now in the clinical stage in the U.S. and EU. TRCs are the
core component of the PCPs Aastrom is developing for bone grafting, peripheral
vascular disease, jaw bone reconstruction and spine fusion markets. The Company
has also developed the AastromReplicell System for dendritic cell production for
researchers and institutions developing vaccines to treat cancer and infectious
diseases, under its Cell Production Products line.

For more information, visit Aastrom's website at www.aastrom.com.

THIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS, INCLUDING WITHOUT LIMITATION,
STATEMENTS CONCERNING PLANNED CLINICAL TRIALS, PRODUCT DEVELOPMENT OBJECTIVES,
POTENTIAL PRODUCT APPLICATIONS, AND POTENTIAL ADVANTAGES OF THE
AASTROMREPLICELL(R) SYSTEM, WHICH INVOLVE CERTAIN RISKS AND UNCERTAINTIES. THE
FORWARD-LOOKING STATEMENTS ARE ALSO IDENTIFIED THROUGH USE OF THE WORDS
"INTENDED," "PLAN," "POTENTIAL," "BELIEVE," 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
CLINICAL TRIAL RESULTS, POTENTIAL PRODUCT DEVELOPMENT DIFFICULTIES, THE EFFECTS
OF COMPETITIVE THERAPIES, REGULATORY APPROVAL REQUIREMENTS, THE AVAILABILITY OF
FINANCIAL AND OTHER RESOURCES AND THE ALLOCATION OF RESOURCES AMONG DIFFERENT
POTENTIAL USES. THESE AND OTHER SIGNIFICANT FACTORS ARE DISCUSSED IN GREATER
DETAIL IN AASTROM'S ANNUAL REPORT ON FORM 10-K AND OTHER FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION.

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