NeoStem - giving stem cells to yourself

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Phase III Medical Announces Initial Letter Agreement with NeoStem to

Pioneer Adult Stem Cell Bank

MELVILLE, N.Y.--(BUSINESS WIRE)--March 11, 2004--Phase III Medical, Inc.

(OTCBB: PHSM) today announced that it has entered into an initial letter

agreement to finalize a Revenue Sharing Agreement with NeoStem, Inc., a

California company whose primary business is to establish an autologous

adult stem cell bank.

NeoStem will create adult stem cell banks and offer the collection,

processing and storage of an individual's healthy stem cells for future

autologous (self) transplantation. Therapies based on using one's own

stem cells are believed to have economic and clinical advantages over

those using third party donor's cells. Patients in need of stem cells

would not need to wait for a matched donor, or risk immune rejection or

graft-versus-host disease. NeoStem also intends to conduct research and

development of new adult stem cell therapeutic strategies.

If a definitive agreement is reached, Phase III would provide funding

and guidance in connection with the adult stem cell banking enterprise

in exchange for a share of the revenues derived from such enterprise.

NeoStem was founded by former executives and co-founders of StemCyte,

Inc., the world's second largest umbilical cord stem cell bank. In

addition to domain know-how in stem cell banking and therapeutics,

NeoStem Company has developed and filed four patents on the applications

of stem cells as well as a process patent for an autologous stem cell

bank.

Phase III Medical is a company involved in the pharmaceutical,

biotechnology and life science industry. Phase III provides capital and

guidance to companies, within the medical sector, to acquire revenues,

royalties and other contractual rights known as " royalty interests, "

that entitle it to receive a portion of revenue from the sale of

pharmaceuticals, medical devices and biotechnology products.