Adult stem cell leader Neostem, Inc. (NYSE Amex: NBS) has been awarded a $700,000 military grant from the U.S. Army's Medical Research and Materiel Command to study adult stem cell applications in the healing of trauma wounds. The award opens new opportunities for the company's patented VSEL technology.

Shares of Neostem rose more than 5 percent on the news.

In a statement released to the press, Neostem founder and Chairwoman Dr. Robin Smith said her company was "thrilled with the news," stating that "these federal monies will allow us to intensify our efforts to expand the potential impact of adult stem cells in wound healing and other areas of regenerative medicine in general."

Neostem holds the worldwide licensing and patent on a technology which can separate adult stem cells from donors to quickly reproduce commercial volumes which it calls VSEL technology, or Very Small Embryonic-Like stem cells, shown to have several physical characteristics that are generally found in embryonic stem cells. Neostem is able to more quickly grow VSEL stem cells from donor cells, making it more economically viable in real-life applications, and because their technology is based on adult stem cells, there is no controversy involved. Even the Catholic Church has endorsed Neostem's research.

According to Smith, Neostem is on the verge of growth beyond the company's initial expectations thanks to the federal grant.

"We understand the urgent need to improve regenerative medicine capabilities and reach ultimate medical solutions. Wound healing could represent just the beginning of more collaborative projects involving other clinical indications, such as spinal cord injuries and retinal damage, both of which affect American warriors who serve our country in the global war on terrorism," said Doctor Smith.

Dr. Vincent Falanga, who is to be Co-Principal Investigator for this study, validated Smith's statement saying Neostem's VSEL adult stem cell technology is key to healing wounds and can be harvested with relative ease from individuals.

"These stem cells could bring about a quantum step forward in the way we treat non-healing chronic wounds and many types of injuries, both in the civilian and military population," said Falanga.

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