HSCI: the first Russian public

biotech company

(expanding into new geographic markets)

TEASER for Investor presentation

(road-show for sale of 28.6 % of HSCI’s

increased share capital) June 2014

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Disclaimer

Certain statements in this presentation are forward-looking statements within the meaning of

the U.S. federal securities laws and are intended to be covered by the safe harbors created thereby.

Those forward-looking statements include, but are not limited to:

• management’s assessment of the Company’s future results, including revenue, net profit(loss), profit(loss) per share,

dividends, investments, capital structure, margins and other operating and financial results;

• forecasts of the present value of future cash flows and related factors;

• the Company’s plans, goals and tasks relating, among other things, to its products and services development;

• the Company’s expectations with respect to improving its corporate governance practices;

• the Company’s market position – as anticipated;

• economic outlook and industry trends;

• the Company’s expectations as to the sector regulation and assessment of impact of regulatory initiatives on the

Company’s activity;

• assumptions and prerequisites under the statements.

Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to

differ materially from those expressed or implied by these forward-looking statements.

These risks include the risk of changes in political, economic and social conditions in Russia as well as changes in global

economic environment, the risks relating to changes in industry regulation and the Russian legislation, the risk of changes

in the Company’s operations and business prospects, the competition and other risks.

For a more detailed discussion of these and other factors, see the Company’s Annual Report and other public filings.

Many of these factors are beyond the Company’s ability to control or predict. Given these and other uncertainties, readers

are cautioned not to place undue reliance on any of the forward-looking statements contained herein or otherwise. The

Company does not undertake any obligation to release publicly any revisions to these forward-looking statements (which

are made as of the date hereof) to reflect events or circumstances after the date hereof or to reflect the occurrence of

unanticipated events, except as may be required under applicable laws.

About the Company

Human Stem Cells Institute (HSCI) is Russia’s public biotech company (ticker: ISKJ) founded in 2003.

HSCI is engaged in drug discovery, R&D and marketing of innovative proprietary products and services in

the field of advanced biomedical technologies, including such segments as:

• Gene therapy

• Regenerative medicine (stem cell therapy and services, tissue engineering products)

• Medical genetics, including reproductive genetics (Lab & clinics /genetic testing and consulting/)

• Bio-insurance

• Biopharmaceutics (within the international SуnBio project)

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Gemabank – a family cord blood stem cell bank, the largest in Russia and the CIS, as well as Reprobank, a reproductive cell and tissue bank

Neovasculgen® – the-first-in-class gene-therapy drug for treatment of Peripheral Arterial Disease (PAD), including Critical Limb Ischemia (CLI)

SPRS-therapy – a set of personalized diagnostics and treateatment procedures based on the innovative cell technology which entails the use of autologous dermal fibroblasts to repair skin damage due to aging and other structural changes

Genetico medical genetics centers that provide genetic diagnostics and consulting services

The Company’s key products include:

HSCI Medical

genetics

Bio-insurance

Drug

development

HSCI Group Projects (as of June 2014)

2003 2013

2009 (IPO)

Products on the market 1

Revenue, IFRS (RUB mln) 146

Market Cap (RUB mln) ≈ 750

2013

7

420

≈ 1,440

HSCI is a multifaceted biotech

company having a diversified revenue

and targeting on business expansion,

entering new geographic markets and

increasing shareholder value

10 Years’ History: Achievements

5

Mono-brand (Gemabank, projects in the field of cell technologies)

IPO Change of status, competencies development, PR + IR

Multi-brand International status

CAGR = 35%

• HSCI has a high-growth business: annual revenue

growth averaged 35% in 2008-2013

• Business model is diversified as the company has

several business lines that generate revenue

• Business is financially stable. Net debt / OIBDA was

0.47 (as of Dec. 31, 2013)

Key Financials (Under IFRS)

6

50%

46%

4%

2013

80%

11%

9%

2012

100%

2004-2010

Revenue breakdown (under IFRS)

97

146

193

262 300

420

0

50

100

150

200

250

300

350

400

450

2008 2009 2010 2011 2012 2013

Revenue Dynamics in RUB mln

In RUB million 2013

Revenue 419.77

Operating expenses, incl. 377.11

Depreciation & amortization 22.5

OIBDA 65.17

Operating profit 42.66

Net profit 16.67

Total comprehensive income 16.73

OIBDA margin, % 15.5%

Operating margin, % 10.2%

Net profit margin, % 4.0%

Net debt 30.36

Net debt / OIBDA 0.47

Gemabank

New products & services

(Neovasculgen, Genetic testing & consulting, SPRS-therapy)

Other revenue

Business model - 2014

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Gemabank – business that has been

generating revenue in Russia for over

10 years

New products in the Russian market,

business diversification

Scaling the Business

(bringing existing products and services to new geographic markets)

R&D (product candidates

pipeline)

HSCI Strategy: innovative products and creation продукты

of new markets -- > having gained a majority

share, grow with the market

Sale of

licenses

IP Creation

Medical genetics

consulting

Taking advantage of the company’s strengths, expertise, and competencies for

scaling the business into new geographic markets

International Markets Entry

Growing cash flow from products and services launched in Russia

Experienced team of professionals

Medical and scientific competencies

Experience of developing innovative products and services, obtaining regulatory approvals, and launching such products and services in the markets

IP-protection

Strong proprietary R&D base

Established sales channels

Focus on high growth market segments

Financial investments in foreign companies of the sector

Scaling into new geographic markets

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Neovasculgen®: development, FDA clearance, and launch in the USA and China

Investments: Pre-clinical and clinical trials (Phase I, II in the USA (~ 3 years) – $ 20 mln

Development of services in the field of regenerative medicine and medical genetics

in Europe

Starting from 2014:

Road show -> private placement/SPO of 28.6% of increased share capital

(additional issue of 30 mln shares)

Some Parameters of the Investment Program

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Main goal – scaling the business into new geographic markets

Investment objective – development of HSCI’s products and services outside of Russia:

• Pre-clinical studies and clinical trials of Neovasculgen® gene therapy drug in the USA

• Pre-clinical studies and clinical trials of Neovasculgen® gene therapy drug in China

• Purchase of stakes in European regenerative medicine companies (cord blood banks, etc.)

• Launch of genetic diagnostic services in Europe

• Launch of cell-based services in Europe

In addition:

• Genetico project (jointly with RVC BioFund) – development of a chain of Genetico medical centers to provide a range of personalized genetic diagnostic and consulting services with the aim of early identification, prediction and prophylactic treatment of genetic disorders

Amount (in RUB mln)

2014-2016 2017-2020

TOTAL

up to 600 up to 2,700

HSCI: Investment Case

• Proven business model. Sales history from 2003.

• Focused business model of personalized medicine of the future – knowledge about genetics for diagnosing, preventing and treating diseases, regenerative medicine, and bio-insurance.

• Innovative products and services help the Company to create new markets to capitalize on growth opportunities which they present while gaining market lidership.

• Business transparency – IFRS financial statements audited by Ernst & Young.

• Investment history and investor relations experience. The Company’s shares have been publicly traded on the MICEX since 2009 (ticker – ISKJ).

• Professional management team capable of managing business in a period of high growth.

• Scaling the business into international markets should create a platform for sustainable growth in the long term.

According to the Company estimations, HSCI’s shares may trade with an 180% upside. (current price per HSCI’s ordinary share on the MICEX is RUB 15 as of 11.06.2014; target price is RUB 40-50 in 2.5 - 3 years).

Investor exit strategy may include RTO (reverse takeover) and / or listing on a stock exchange outside of Russia in 2.5 - 3 years (e.g. in the US).

Global markets have high-growth rates averaging 25% - 30% and more:

Global gene therapy market with Neovasculgen® taken into account – over US$ 2 billion by 2025; Global regenerative medicine market is forecast to grow from US$ 1 billion in 2011 up to US$ 5 billion by 2017; Global market of stem cell therapeutics may grow from US$ 855 million in 2015 up to US$ 9 billion by 2020.

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HSCI: Investment Profile

IPO (December 2009)

HSCI OJSC placed 15 million ordinary shares

(20% of the increased shart capital)

Offering price – RUB 9.5 per share

Amount raised – RUB 142.5 million (USD 4.8 billion)

Over 300 new shareholders at the IPO

Traded on

MICEX (ticker: ISKJ) – iIM (Innovation & Investment Market)

Today MICEX is part of the Moscow Exchange (MOEX)

Recent stock price 11.06.2014: RUB 15.00; MCap – RUB 1,1 bln (USD 32,7 mln)

52 WK HI/LO: RUB 12.70 / 21.99

Free float

≈ 20% ORD (of the 75 million ord shares outstanding)

Number of shareholders

As of May 6, 2014: 1,101

Dividend policy

As recommended by the BoD

2009: 32% of net profit under RAS for 2009;

2010 - 2012: no dividend payments;

2013: pay 98% of net profit under RAS for 2013

(AGM to decide on June 17, 2014) 11

Ownership structure as of May 6, 2014

(the record day for the AGM)

For more information, please refer to: http://eng.hsci.ru/investoram-i-aktsioneram/share-capital-stock-market/shareholder-structure

HSCI vs MICEX Index: 10.06.2011 – 11.06.2014

16.80%

3.12%

32.15% 24.00%

4.01%

19.92% Artur Isaev, HSCI's CEO

HSCI's BoD members and employees

First International Investment Group Ltd.

Dynamic Solutions Ltd.*

NextGene LLC**

Other (mostly Russian individualshareholders)

* Change in HSCI's shareholding structure as of December 27, 2013 - see: Press-release

(January 14,2014)

** Treasury shares of HSCI, which occurred due to the mandatory buy-back in 2011 (4.67%

of HSCI’s share capital), were realized during the year 2012 as required by law, with the part

of them (in the amount of 4.01% of HSCI’s share capital) having been brought to the charter

capital of HSCI’s 100% subsidiary NextGen LLC as an additional contribution.

Contacts

Mailing address: P.O. box 373, Bld. 2, 3 Gubkina Str., Moscow 119333, Russia Legal Address: 18/1 Olimpiysky prospect, Moscow 129110, Russia Phone/(Fax): +7(495) 646-80-76 Chief Executive Officer:

Artur Isaev Tel.: +7(495) 646-8076 E-mail: art.isaev@gmail.com

Investor Relations Director:

Svetlana Samoylova Tel.: +7(495) 646-8076, ext.180

+7 (963) 679 35 08 E-mail: ssamoylova@hsci.ru

Analyst:

Dmitry Krasotkin Mob.: +7(916) 657 38 74, E-mail: krasotkin@nextgene.ru

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Website:

www.hsci.ru

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