Michael W. Elliston – Chief Financial Officer, Secretary, & Controller Dominick C. Colangelo – President, CEO, Treasurer, Director, and CAO Daniel R. Orlando – Chief Operating Officer Ross Tubo – Chief Scientific Officer David Recker – Chief Medical Officer

Chad J. Messer – Needham & Co. LLC Jason Napodano – Zacks Investment Research, Inc.

Ladies and gentlemen thank you for standing by. Welcome to the Aastrom Biosciences First Quarter 2014 Conference Call. At this time, all participants are in a listen-only mode. I would also like to remind you that this call is being recorded for replay. I will now turn the conference call over to Aastrom’s Controller and Corporate Secretary, Michael Elliston. Michael W. Elliston: Thank you, operator, and good afternoon everyone. Welcome to Aastrom’s first quarter 2014 conference call to discuss our first quarter financial results and the progress of our development programs. Before we begin, let me remind you that on today’s call, we will be making forward-looking statements covered under the Private Securities Litigation Reform Act of 1995. And all of our projections and forward-looking statements represent our judgment as of today. These statements may involve risks and uncertainties that are described more fully in our filings with the SEC, which are also available on our website. In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. With us on today’s call are, Nick Colangelo, Aastorm’s President and Chief Executive Officer; Dan Orlando, our Chief Operating Officer; Ross Tubo, our Chief Scientific Officer and Dr. David Recker, Aastorm’s Chief Medical Officer. I’ll now turn the call over to Nick. Dominick C. Colangelo: Thank you, Mike, and good afternoon everyone. I’ll begin today’s call with a brief overview of our recent agreement to acquire Sanofi's Cell Therapy and Regenerative Medicine or CTRM business, which Sanofi acquired through its acquisition of Genzyme Corporation in 2011. Over the past year, we’ve taken several steps to position Aastorm to consider a range of business opportunities, and this transaction is a clear reflection of that strategy in action. As announced, we executed a definitive agreement to acquire Sanofi's CTRM business for $6.5 million, with $4 million payable in cash at closing and $2.5 million in the form of a promissory note. Through this acquisition, we are acquiring worldwide commercial rights to three marketed autologous cell therapy products Carticel, MACI, and Epicel that had revenues of $44 million in 2013. We are also acquiring manufacturing and production centers in the U.S. and Denmark, a commercial organization based principally in the U.S., and $4.3 million in net working capital. The products that we’re acquiring are pioneering therapies that were among the first products approved in the cell therapy field. Carticel and MACI are autologous chondrocyte implants or ACIs for the treatment of focal articular cartilage defects in the knee, which if left untreated can lead to degenerative joint disease, osteoarthritis, and total knee replacement. Epicel is a life saving permanent skin replacement product for use in patients that have severe burns. Carticel, a first generation ACI is the first and only FDA approved autologous cartilage repair product. Carticel was approved in 1997 and currently is marketed in the United States. Carticel is administered by orthopedic surgeons after obtaining a cartilage biopsy from a patient, from which the patient’s chondrocytes which are the cells that produce cartilage are isolated and expanded into GMP manufacturing process. The cells are implanted in the cartilage defect under a periosteal flap where they produce new cartilage. The therapeutic advantage of this approach is that the autologous chondrocytes produce the hyaline cartilage that is naturally present in the knee rather than fibrous cartilage, which is the case with other approaches. Over 22,000 patients have been treated to-date with Carticel. MACI is an advanced third-generation ACI product for the treatment of cartilage defects in the knee. MACI was approved in Europe in 2013, where it is the first and only tissue engineered product approved as an advanced therapy in medicinal product by the European Commission. Similar to Carticel, chondrocytes are isolated from a cartilage biopsy and expanded after which they are seeded on to a collagen membrane. The seeded membrane is trimmed to the size of the cartilage defect and fixed in the defect with fibrin glue. Over 10,000 patients have been treated with MACI outside the United States since 1998. The advantage of MACI is that it delivers the efficacy of Carticel with a dramatic improvement in ease of use for the physician and a reduced rehabilitation protocol for the patient. The implant procedure for MACI is much less invasive, eliminates the need for a periosteum harvest and sutures and results in a corresponding reduction in the postoperative recovery time for the patient. Epicel is a permanent skin replacement for full thickness burns greater than or equal to 30% of total body surface area. Epicel is the only approved autologous epidermal product available for large total surface area burns. It’s approved in the United States as a humanitarian use device and supplied outside the United States on a named-patient basis. Epicel is produced by isolating and expanding keratinocytes, which are the predominant cell type in epidermis or outer layer of the skin obtained from a biopsy of a patient’s healthy skin. Epicel is an important treatment option for patients with severe burns, because these patients need a keratinocyte based epithelium, and there is very little skin, which is the only other source of the keratinocyte based epithelium available for autografts for these patients. Approximately, 100 patients are treated with Epicel in U.S. each year. From a strategic perspective, the acquisition of Sanofi's CTRM business is a transformative transaction that positions Aastrom as a fully-integrated Cell Therapy and Regenerative Medicine company. The CTRM business represents a strong strategic fit with Aastrom, combining pioneering marketed autologous cell therapies with a high potential therapy pipeline for the repair and regeneration of damaged tissues. Aastrom is uniquely positioned to maximize the potential of the CTRM business, given our long history in developing autologous cell therapies as well as having the leadership team with strong commercial experience and extensive experience in the development and approval of these acquired products. Finally, the combined companies assets and capabilities not only provide for diversification of risk, but provide a strong platform for our product development activities and additional acquisition opportunities in the future. Our two businesses are not just synergistic; we also share a common vision about the potential of autologous cell therapies to treat serious diseases and conditions. We share common values about transparency, rigorous science, team work, and accountability, and we believe in an entrepreneurial culture that encourages fresh thinking, agile decision making, and new approaches to addressing unmet medical needs. We are excited about the opportunity to leverage Sanofi's sales and marketing expertise and commercial manufacturing capabilities as we continue to advance the development of our propriety cell therapy product ixmyelocel-T. For the Sanofi's CTR team, this transaction provides an opportunity to grow their cell therapy businesses as part of a dedicated organization that shares their desire to build a successful cell therapy business; values their experience in past success, and welcomes new ideas and opportunities to create sustainable long-term value for employees, shareholders, patients, and physicians. We also see opportunities to optimize the efficiency of this new business combination that we’ll be describing and pursuing several initiatives in the months ahead. During the first quarter, we also took steps to further enhance our financial position and flexibility by entering into a $15 million equity commitment with Lincoln Park Capital, a long time investor in Aastrom. Under the terms of the agreement, Aastrom has the right to sell from time-to-time up to $15 million and shares of common stock to Lincoln Park over a 30-month period on market based terms subject to certain limitations and conditions set forth in the stock purchase agreement. This facility provides Aastrom with another tool for accessing capital in addition to potential revenue from future business collaborations and traditional fund raising. And we intend to use the facility as appropriate to support the achievement of our operational and strategic objectives. In addition to acquiring new products through the CTRM acquisition and establishing new financial tools, we've recently strengthened our senior management team with the appointments of Dr. Ross Tubo as Chief Scientific Officer and Dr. David Recker as Chief Medical Officer of Aastrom. Ross formerly was Vice President of stem cell and chemokine biology at Genzyme, where he directed the R&D programs for Carticel and Epicel, and he now has the opportunity 20-years later to support the products he developed early in his carrier and rejoin a business that he helped to create. Ross is a passionate pioneer in the field of cell therapy, who has seen first-hand positive impact that autologous cell therapies can provide for patients. I know that Ross is excited about our technology platform and the ixmyelocel-T clinical program just as we are excited to bring his scientific expertise and (inaudible) experienced to Aastrom. As our Chief Medical Officer David Recker brings to Aastrom more than 20-years of drug development experience. Previously, he was Senior Vice President of clinical sciences at Takeda Global Research and Development, where he led a multi-regional clinical organizations supporting clinical development of a variety of products in multiple therapeutic areas. He played a lead role numerous successful global regulatory filings. Dave has played an important role in the execution of our ixmyelocel-T clinical programs and we’re delighted to have Dave join the company as Chief Medical Officer. With strong R&D leadership in place and an experienced commercial team to leverage we’re excited and optimistic about the future of our autologous cell therapy franchisee. Now I would like to turn the call over to Dave Recker for an update on our clinical programs.

Thank you, Nick. I would like to begin today by providing a brief update on our lead clinical programs, our orphan disease program for the treatment of advanced heart failure due to ischemic Dilated Cardiomyopathy or DCM. As a reminder the Phase IIb ixCELL-DCM study is a multicenter randomized, double-blind, placebo-controlled trial evaluating the efficacy and safety of ixmyelocel-T in patients with advanced heart failure due to ischemic DCM, with the primary endpoint being major adverse cardiovascular events defined as the number of all cause deaths and cardiac hospitalizations and unplanned emergency department visits for treatment of acute worsening heart failure over the a 12-month period. We have now activated more than 30 clinical sites in both the U.S. and Canada. And our clinical investigators and patients remain very enthusiastic about the study. Enrollment in any ixCELL-DCM study is proceeding extremely well. We continue to expect to complete enrollment during the second half of this year and report top line results approximately 12-months thereafter. In addition, as we announced in April, the Independent Data and Safety Monitoring Board or DSMB for the ixCELL-DCM clinical trial has recommended a continuation of study without modification following an interim review of unblinded safety data from that trial. We are very pleased with the DSMB’s recommendation to continue the ixCELL-DCM trial as plan and appreciate the DSMB’s ongoing effort in overseeing the safety of the study. Turning to the REVIVE CLI study, we have conducted preliminary analysis of data from patients in the study, which showed positive trends in amputation-free survival and wound closure in the ixmyelocel-T treated group consistent with previous results seen in the Phase II RESTORE study. These results demonstrating positive trends with the ixmyelocel-T are inline with our expectations given that the number of treated patients was insufficient to demonstrate statistical significance. We remain enthusiastic about the potentials of ixmyelocel-T for the treatment of patients with CLI. However, at this time we are maintaining our focus of our internal ixmyelocel-T clinical development efforts on our orphan diseases program for the treatment of advanced heart failure in the ixCELL-DCM study, which as I mentioned is proceeding very well. Finally, with respect to our clinical activities, evaluating the use of ixmyelocel-T for the treatment of patients with craniofacial defects undergoing reconstructive surgery. We expect to complete enrollment in the third of three NIH sponsored studies that is a Phase I/II trial in patients affected by cleft palate or alveolar bone defects due to trauma by mid-year. I’ll now turn the call back over to Nick. Dominick C. Colangelo: Thank you, Dave. As we mentioned on our last call, in an effort to leverage our existing assets and industry leading technology platform, we’ve expanded our efforts at Marrow Donation LLC, our bone marrow collection center in San Diego in response to the significant interest across the biopharmaceutical industry in the use of bone marrow and bone marrow-derived cells as drug discovery tools. We’ve continued to move forward with these efforts and expect to initiate commercial supply of bone marrow to distributors and research organizations in the coming weeks. This is a promising new business opportunity for us and I’ll provide further updates on this initiative in the coming quarters. That concludes our update on recent activities; I’ll now turn the call over to Mike to review our first quarter financial results. Michael W. Elliston: Thanks Nick. For the first quarter ended March 31, 2014 Aastrom had a net loss of $6 million or $1.26 per share versus $5.5 million or $3 per share for the same period in 2013. The increase in net loss is due to the increases of non-cash changes in the fair value of warrants offset by the decreases in research and development and general and administrative expenses. Our loss from operations for the quarter, which excluded the impact of warrants was $4.6 million or $0.79 per share compared to $7.2 million or $3.19 per share a year ago. Research and development expenses for the quarter ended March 31, 2014 were $3.3 million versus $5.5 million for the same period a year ago. The decrease in R&D expenses was primarily attributable to the reduction of the clinical trial expenses, and the execution of a corporate restructuring that’s substantially reduced headcount and operating expenses. General and administrative expenses for the quarter ended March 31, 2014 were $1.4 million, compared to $1.6 one year ago. At the end of the first quarter, Aastrom had $8.8 million in cash and cash equivalents compared to $8.1 million at the end of December 2013. Our cash used for operations of $4.7 million during the quarter was inline with our previous forecast of $4 million to $5 million. We have continued to manage our cash position carefully and have utilized our existing facilities during the periods of price and volume strengthened for our stock, which enabled us to maintain our cash position with the cash balance of approximately $8.7 million as of the end of the April 2014. That completes my financial review. I’ll now turn the call over to Nick. Dominick C. Colangelo: Thanks Mike. We’ve accomplished a great deal in the first few months of 2014 as is always the case assembling strong assets and a strong management team are critical components of building a successful company. The acquisition of the CTRM business together with the additional outstanding new members of the executive leadership team are important building blocks as we continue to build Aastrom into a leading regenerative medicine company. Now, I would like to ask the operator to open the call to your question.

Certainly (Operator Instructions) Our first question will be coming from the line of Chad Messer from Needham and company. Your line is open. Chad J. Messer – Needham & Co. LLC: Great, thanks for taking my question, and I realize it’s a little bit early in the process, but I’m really trying to do my best to understand how the CTRM acquisition is going to affect basically your P&L and balance sheet at least in the near-term. So, if I’m correct in understanding, the $4.5 million due at closing, but you acquire $4.3 million in working capital, is that kind of – should I think of that as close to a wash in cash and then there is a promissory note. I don’t know if you can share a little more if it was disclosed somewhere in the release how that works? And then, these are for the most part older assets that obviously have at least been disappointing in the hands of Genzyme. Do you expect these to add to cash flow, is it going to take some expense on your part to make these productive assets, and if so how are you going to pay for that? Dominick C. Colangelo: So, Chad. This is Nick, that’s a multi-part question. So, I’ll try to address it in turns. So first of all, it’s actually $4 million due at closing and $4.3 million in net working capital, so I think you are thinking about that appropriately, and the note payable was disclosed in our 8-K filing, which included the asset purchase agreement. So, it’s a note payable 60-days after closing. So, obviously as we stated, and by the way my comments here will be sort of restricted, as you mentioned it’s a little early in the process to really discuss our plans going forward since we haven’t closed the transaction yet, and so my comments are generally going to be restricted to the press release we issued in the asset purchase agreement that’s on file with the SEC, but we certainly -- as we mentioned in the press release expect these assets to generate operating income that will fund our other programs at Aastrom. Chad J. Messer – Needham & Co. LLC: Are you acquiring sales and marketing personnel in this transaction, are these people you are going to have to hire or are these people you already have working for you? Dominick C. Colangelo: No we are acquiring the entire business, so that includes worldwide commercial rights to each of these products. A commercial organization, as I mentioned earlier, based principally in the United States. So well there are two manufacturing and production centers, one in Cambridge and one in Copenhagen in Denmark. So unlike when products are purchased and there is a risk of disruption here, we’re essentially acquiring the whole business, and we are working very hard with Sanofi on the transition aspects of the business to make sure that there is seamless transition and that the business is set up for success in the decades ahead. Chad J. Messer – Needham & Co. LLC: All right. Well, at the appropriate time, I certainly look forward to learning more details about how you are going to leverage this asset. On a different issue, the CLI data analysis that you did, is this something you are going to eventually present at a meeting, are we going to learn a little bit more than this topline of positive trends?

This is Dave, I can tell you that if you recall the original trial in order to reach statistical significance and demonstrate superiority of ixmyelocel-T to background therapy for amputation-free survival was powered with 600 patients. You recall that because of the challenges in enrolling the trail, the trail was prematurely discontinued primarily – exclusively for business reasons, it just wasn’t enrolling as folks at that time we had thought. There were, however, 41 patients actually that were enrolled in the program, and the expectation at the time of discontinuation frankly was not high with 41 patients, not a whole lot could be understood when it takes 600 to show that. The data that we see right now are preliminary, but again consistent with what we saw, there are some small trends towards improvement. We haven’t yet decided exactly whether or how to present these. I’m not sure any reputable organization frankly would be willing to present 40, stayed on 40 patients, but we haven’t rolled out the possibility of something to somewhere and having it presented. It’s still early as I said, we just unbounded of the trial last week. Chad J. Messer – Needham & Co. LLC: People present data on less than 40 patients all the time. Okay, I mean everything you said is understood, I was just wondering if we would have a chance to see more of the data and kind of interpret it for ourselves, but thank you I appreciate the added information.

Thank you. (Operator Instructions) Our next question will be coming from the line of Jason Napodano from Zacks. Your line is open. Jason Napodano – Zacks Investment Research, Inc.: Hey guys good afternoon. Dominick C. Colangelo: Good afternoon Jason. Jason Napodano – Zacks Investment Research, Inc.: So, you know Dominick, I appreciate the fact that you don’t want to go into too much details until the deal closes, I think I missed ,I don’t know if you said in your prepared remarks, when do you expect the deal to close? Dominick C. Colangelo: Yes, so we have a window – later this month is when we expect to deal to close, we have a window that we established with Sanofi and a target date within that window, which we’re operating towards. And again, what we’re trying to do as you can imagine extracting somewhat smaller business, global business, out of a large multinational company that supports the business with multiple corporate functions, it’s a complex process and we share the view that we want to do this well and so we are proceeding along that path, but we expect to close later this month. Jason Napodano – Zacks Investment Research, Inc.: So I am having a hard time understanding how you can acquire $44 million in revenues for what net looks like $2.2 million in cost after you payout the $6.5 million total and then acquire $4.3 million in positive working capital. Can you give us any sense of the trajectory of those revenue maybe what – if that $44 million was 2013 what that data over 2012 and then in terms of operating margin where that business is, is it generating – I mean you said positive cash flow, I mean I’m assuming this is a profitable business. Dominick C. Colangelo: Yes, so I’ll again address that multi-part question in turn, first of all we’re not in a position to comment on Sanofi’s strategic decision, but it’s common for large pharmaceutical companies to divest assets that aren’t core to their strategy moving forward. Particularly again when this was an acquired business and a small part of what is now Sanofi Biosurgery. So we are happy and we think it’s a deal that works for both parties particularly for us. I can’t really present the historical sales information, there are some information out there from when it was a part of Genzyme’s business that suggest that the revenues are essentially at about the same level they are now. These products have been out for about 15 years, we actually like that. So these are products that we see an equal or longer future with. These are products not – or certainly unlike small molecules and other biologics that are subject to generic competition. This is really about optimizing this business and then it will serve as annuity for Aastrom going forward. Jason Napodano – Zacks Investment Research, Inc.: Can you give us a sense of the number of employees that are coming over as part of the two manufacturing facilities or if there is sales staff that’s coming over? Dominick C. Colangelo: Yes, it’s about 200 employees all totaled and as I mentioned earlier, it includes manufacturing and production personnel, commercial personnel, et cetera. Jason Napodano – Zacks Investment Research, Inc.: Are there any synergies in terms of these manufacturing facilities with your own facility, that produces ixmyelocel-T? Dominick C. Colangelo: Well we certainly believe that there are synergies in terms of shared learning and so on, we’re not at – we haven’t even closed the transaction yet Jason, so we’re not at a point where we are looking much beyond properly and seamlessly integrating the business and those are kind of things we think about somewhere pretty far down the line. Jason Napodano – Zacks Investment Research, Inc.: Okay, last question on CLI, so if I’m understanding you guys correctly, I mean this is now sitting on the back burner, I mean is there anything that you guys are planning to do in terms of ixmyelocel-T with CLI although there are additional – you talked about it adjunct therapy in the past, is there anything that would move forward there or is it solely kind of if a partner wants to take it you are there to support them kind of thing?

I think that depends of the circumstances and on the opportunity. Right now, as I said our focus will be from a clinical perspective on ixCELL-DCM program a much more achievable program than the huge trial that was undertaken for CLI. We haven’t rolled out the potential for at some point, at some time, in some way investigating the intervention using ixmyelocel-T and CLI, but right now, as you said it’s on the back burner and we’ll focus our resources on Dilated Cardiomyopathy. Jason Napodano – Zacks Investment Research, Inc.: Okay, guys. I’m looking forward to when you could say more about this acquisition, because again paying 120 of trailing sales is just seems just like an incredible opportunity especially if its generating positive cash flow. So, I think really looking forward to hearing your update after the deal closes.

Thanks, Jason. We think it’s an exciting opportunity as well and look forward to talking more with you about it.

Thank you. And at this time, I’m not showing any further questions. I would now like to turn the call back over to Nick Colangelo for any closing remarks. Dominick C. Colangelo: Well, I just wanted to say thanks again for your questions and continued interest in Aastrom and our programs. We’re excited about the opportunities that lie ahead with our new colleagues from Sanofi and look forward to reporting on our progress on our next call. Have a great afternoon.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program. And you may all disconnect. Everyone have a great day.