Human Stem Cell Institute First Russian Biotech IPO

Human Stem Cell Institute First Russian Biotech IPO November 2009: Investor Presentation Organizer ALOR INVEST Co-organizer Finam, Russian Funds Underwriter - BCS

IPO Parameters Issuer Share of authorized capital Size of offering Human Stem Cell Institute 20%/ 15 million common shares RUR 135-165 million Date of offering the end of November 2009 Organizer Syndicate Stock exchange ALOR INVEST Price range RUR 9-11 Co-organizers: Finam Group, Russian Funds Group Underwriter: BCS Group IGC sector of MICEX Date of price setting 12-27 November 2009 Capitalization RUR 675-825 million 2

Company 27.11.2003 The company registration on the basis of the Blokhin Center for Oncology Research cryobank of biomaterials 136% History 2007 48% 2008 Construction of a new GMP lab Establishing a subsidiary company in Ukraine Purchase of Symbiotec share Adopting NetSuite CRM/ERP 2005 248% 2006 Registration of a HSC isolation technique/ministry of Health s approval Arranging the International SC Symposium A technique of nuclear cells isolation from umbilical cord blood developed The first issue of the HSCI s Cell Transplantology and Tissue Engineering Expanding the partner and office network International Cord Blood Society Membership 64% 2004 Formation of the team Arrangement of business processes Defining services for sale Start of sales Hi-tech equipment The first successful transplantation Arranging the Forum for Expectant Mothers, roundtables and workshops Gene engineered VEGF construct is created 2009 Obtaining authorization for «Neovasculgen» clinical testing Development of the strategic and investment plan Preparation for the IPO3

Company Structure HSCI Gemabank, Russia Cell Transplantology and Tissue Engineering Scientific Journal 66% Laboratory of Cell Technologies, Russia 100% HSCI Publishing House, Russia Parent company: Gemabank is one of the first Russian institutions specializing on SC banking, isolation and storage. Currently, the Bank stores more than 7,000 samples of hemopoietic stem cells of cord blood 51% HSCI, Ukraine Cord blood bank: provides services of cord blood stem cell isolation and storage in Ukraine R&D subdivision: 7 patents* and 3 authorizations for clinical testing of innovative drugs *including 3 patent applications 44% Symbiotec, Germany R&D subdivision: owns more than 20 international patents related to H1 histone and treatment of oncological blood diseases (Oncohist). 4

Product & Market Areas of business Cell Therapy Cord Blood Banks Tissue Engineering Stem Cell Business Pharmacology Cloning Transgenic Technologies 5

Product & Market Areas of business 2009: 350 90 2012: 689 246 2015: 932 855 CB banks** Cell Therapy 2020: 1162 8940 *Frost&Sullivan estimate, $ million ** new samples market 6

Hemopoietic stem cells Fibroblast-like cells «Neovaskulgen» «Cryocell» «Fibroblast» Our business Brands: 299015 «GEMABANK» 305798 «EXPECTANT MOTHER WORLD» Applications: «NEOANGION» «NEOVASCULGEN» Product portfolio HSCI Patents: 2343928 An Isolation Technique of nuclear cells from umbilical cord blood 2297848 Gene Engineered VEGF-IBMED Construct 2008110210 An Isolation Technique of Endothelial Cells from Human Embryonic Stem Cells. 2008111708 An Isolation Technique of Embryonic Fibroblast-like Cells from Umbilical Cord of a Newborn Patent applications: An Isolation Technique of Pluripotential Cells International patent applications: An Isolation Technique of Endotheliocytes An Isolation Technique of Embryonic Fibroblast-like Cells from Umbilical Cord of a Newborn Gemabank Laboratory of Cell Technologies 7

Our business Indicators Samples number dynamics 8

Our Business Indicators Competitors market shares* as of the end of 2008 11,90% HSCI 34,50% 53,60% Cryocenter Other *ALOR INVEST estimate 9

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Our Business Indicators Projection of market saturation in Russia, % От общего количества родов в РФ,% 2,19% 1,31% 1,73% 0,94% 0,25% 0,30% 0,52% 0,68% 2,78% 3,38% 3,74% 4,13% 4,57% 10

Our Business Indicators Market saturation in selected countries, 2008 Country Population, people Childbirths, per year Market saturation, % total childbirths Personal storage, items per year Russia 142,000,000 1,700,000 0.28% 4,800 Ukraine 46,000,000 509,000 0.20% 1,100 Germany 82,000,000 690,000 1.90% 13,000 USA 304,000,000 4,300,000 3.50% 150,000 Hungary 10,000,000 100,000 9.00% 9,000 Spain 46,000,000 540,000 3.70% 20,000 Princess Leonor de Bourbon s (Spain) stem cells were stored at a blood bank in Tucson (Arizona, USA). In subsequent 3.5 years the SC banking and storage industry of Spain grew dynamically. 11

Our Business Indicators Financial forecast for cord blood business, million RUR 4500 4000 3500 3000 2500 2000 1500 Net sales Gross margin EBITDA EBIT Net income available 1000 500 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 12

Strategy/Investments Investments Total of $9.3 million/rur 298 million Areas Amount, million RUR % 2011: 2 этап Expansion 83.5 28 R&D 189 63.5 Equipment 25.5 8.5 Total investments 298 100 Cash flow 133 44.6 IPO 165 55.4 2010 122 41 2011 176 59 13

Investor Perspective Success Factors Why do we differ from others? 1. HSCI is the leader of the Russian stem cell market 2. Efficient business with long-term annual growth of at least 30% 3. Cell projects implementation in Russia will lead to explosive growth of capitalization 4. Company s openness and high level of corporate management 5. Lack of companies and projects of similar quality in the market 6. Minority shareholder-friendly post-ipo dividend policy 15-20% of net profit 7. The strategy towards acquisition of companies with advanced development/patents will result in positive revaluation of the HSCI product portfolio 8. If successful in Russia, cell and genetically engineered drugs will be introduced to CIS, European and Asian markets, which will lead to strong and steady growth of capitalization in the longer term 14

Investor Perspective Valuation HSCI value structure 3% of value Non-operat. assets 38% of value Value of 3-patent* portfolio Black-Scholes model $8.5 million RUR 270 million Fair value of 20% of HSCI authorization capital 15 million common shares $5.2 million RUR 166 million Value of 100% of HSCI share capital $26 million RUR 830 million *The estimate implies that the rights are used only in the Russian market. Book value $0.7 million RUR 23 million Operating value 59% of value DCF, EVA, Multi, M&A model $16.8 million 15 RUR 537 million

Investor Perspective Biotech Index Nasdaq Biotechnology Index includes more than 200 companies specializing on developing innovative medical drugs and new treatment methods NASDAQ Biotechnology S&P500 Biotech index dynamics since 1994 16

Investor Perspective Biotech Index NASDAQ Biotechnology S&P500 Biotech index dynamics since 2008 17

Investor Perspective SC Banks Cryo-Cell International Inc., US Bionet, Taiwan CryoSave, Netherlands DowJonesIndustrial SC banks stock dynamics since the beginning of 2009 18

Investor Perspective R&D companies The IPO of a company with a drug at the preclinical stage of research Acorda Therapeutics Inc., US S&P500 19

ноя. 09 янв. 10 мар. 10 май. 10 июл. 10 авг. 10 окт. 10 ноя. 10 дек. 10 янв. 11 мар. 11 дек. 11 янв. 12 начало 2 фазы "Криоцелл" результаты 2 фазы "Неоваскулген" начало 3 фазы "Неоваскулген" результаты 2 фазы "Криоцелл" начало 3 фазы "Криоцелл" результаты 3 фазы "Неоваскулген" рег. удостоверение "Неоваскулген" начало производства рег. удостоверение "Фибробласт" результаты 3 фазы "Криоцелл" рег. удостоверение "Криоцелл" начало производства "Фибробласт" начало производства "Криоцелл" Investor Perspective Growth Forecast Projection of HSCI capitalization growth 250% 200% Offering at the average price of the range. Capitalization is RUR 773 million 150% 100% 50% 0% 20 ноя.09дек.09янв.10фев.10мар.10 апр.10май.10 июн.10 июл.10авг.10сен.10окт.10ноя.10дек.10янв.11фев.11мар.11 апр.11май.11 июн.11 июл.11авг.11сен.11окт.11ноя.11дек.11янв.12

Investor Perspective Liquidity Large investor base (at least 50% is individuals) ALOR INVEST is a market-maker with the 10-15% size-of-theoffering limit The lower limit of the price maintained at the level of RUR 7.5 by the current shareholders An option program for the company s management Syndicate of leading brokers along with analytical support of the offering. Co-organizers: Finam, Russian Funds Transparent information policy of the issuer on scientific research 21

Investor Perspective Deal structure Book-building 12-27 November Announcement of the offering price 3 December Sales of the current offering (application regime) 10 December Purchase of additional issue by selling shareholder Inflow of investments into the company 22

Investor Perspective IPO Our objectives: 1. Accelerating the development of the core business in the favourable market invironment 2. Realization of R&D projects and their commercialization 3. Attaining an advanced transparency and publicity level Issuer Share of authorized capital Size of offering Human Stem Cell Institute 20%/ 15 million common shares RUR 135-165 million Date of offering the end of November 2009 Organizer Syndicate Stock exchange ALOR INVEST Co-organizers: Finam Group, Russian Funds Group Underwriter: BCS Group IGC sector of MICEX Price range RUR 9-11 Date of price setting 12-27 November 2009 Capitalization RUR 675-825 million 23