StemCells is using neural stem cells, technically adult stem cells, taken from the partly developed brains of fetuses and tested for qualities showing they are destined to form particular types of nerve cells.

The company said that six months after being infused with the cells all three patients have tolerated the transplantation well and there are no safety concerns.

"We clearly need to collect more data to establish efficacy, but we are encouraged," Stephen Huhn, vice president at StemCells, said in a statement. He also said the company is pushing ahead with plans to dose patients with incomplete spinal cord injuries.

The initial phase of the trial involved patients with complete injuries and no neurological function below the level of the spinal injury.

Changes in sensitivity to touch, heat and electrical stimuli were observed in areas below the level of injury in two of the patients, while no changes were seen in the third patient, the company said.

(Reporting By Deena Beasley; editing by Andrew Hay)

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