Aastrom Biosciences Inc.
Ticker:ASTM 24 Frank Lloyd Wright Drive
Exchange:NASDAQ-National Market Ann Arbor, MI 48106
Industry:Manufacturing (SIC Code 2834) (313) 930-5555

Offering Information
Type of Shares:Common Shares Filing Date:11/4/96
U.S. Shares:3,000,000 Offer Date:2/4/97
Non-U.S. Shares:0 Filing Range:$8.00 - $10.00
Primary Shares:3,000,000 Offer Price:$7.00
Secondary Shares:0 Gross Spread:$0.49
Offering Amount: $27,000,000 Selling:$0.27
Expenses:$1,000,000 Reallowance:$0.10
Shares Out After:13,235,734

Primary Underwriting Group
ManagerTierPhone
Cowen & CompanyLead Manager (212) 495-6000
J.P. Morgan Securities Inc.Co-manager (212) 648-0517

Selected Financial Data

Dollar amounts in U.S. millions except for per share data
Full Year
Audited
Income
Latest
Unaudited
Income
Prior
Unaudited
Income
Balance
Sheet
6/30/96
Revenue:$1.61Assets:
Net Income:-$9.92Curr Assets:
EPS:-$0.90Liabilities:
Prior EPS:-$0.66Curr Liabilities:
Cash Flow/Oper:Equity:
Cash Flow/Fin:Cash:
Cash Flow/Inv:

Business Description
The company is developing proprietary process technologies and devices for a range of cell therapy applications, including stem cell therapies and gene therapy. The company's lead product under development, the Aastrom Cell Production System (the "Aastrom CPS") consists of a clinical cell culture system with disposable cassettes and reagents for use in the rapidly growing stem cell therapy market. The company believes that the Aastrom CPS method will be less costly, less invasive and less time consuming than currently available stem cell collection methods. The Aastrom CPS is designed as a platform product which implements the company's pioneering stem cell replication technology. The company also believes that the Aastrom CPS can be modified to produce a wide variety of other cell types for new, emerging therapies being developed by others.

Competition
The biotechnology and medical device industries are characterized by rapidly evolving technology and intense competition. The company's competitors include major pharmaceutical, medical device, medical products, chemical and specialized biotechnology companies, many of which have financial, technical and marketing resources significantly greater than those of the company. In addition, many biotechnology companies have formed collaborations with large, established companies to support research, development and commercialization of products that may be competitive with those of the company.

Business Plan
The company's objective is to build a leadership position in cell therapy process technology. The primary elements of the company's business strategy are as follows: 1) establish consumable based business model; 2) focus initially on established and reimbursed therapies; 3) leverage platform technology across multiple market opportunities; 4) market through collaborative relationships.

Use of Proceeds
For clinical trials, the development and manufacture of the Aastrom CPS, research and development of other product candidates, working capital and other general corporate purposes.

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