StemCells, Inc. Announces First Patient Cohort Completes Spinal Cord Injury Trial - Gains in Sensory Function Persist 12 Months

StemCells, Inc. Announces First Patient Cohort Completes Spinal Cord Injury
Trial - Gains in Sensory Function Persist 12 Months After Stem Cell Transplant

Improvement From Complete to Incomplete Injury Observed in One Patient

NEWARK, Calif., Feb. 12, 2013 (GLOBE NEWSWIRE) -- StemCells, Inc.
(Nasdaq:STEM) today announced that the twelve-month data from the first
patient cohort in the Company's Phase I/II clinical trial of its proprietary
HuCNS-SC® product candidate (purified human neural stem cells) for chronic
spinal cord injury continued to demonstrate a favorable safety profile, and
showed that the considerable gains in sensory function observed in two of the
three patients at the six-month assessment have persisted. The third patient
remains stable.A summary of the data was presented today by Martin McGlynn,
President and CEO, at the 15^th Annual BIO CEO & Investor Conference.By
completing the twelve-month assessment, the first patient cohort has now
completed the trial, and has entered into a separate follow-up study for
long-term observation.

"The multi-segment gains observed in sensory function in two patients at six
months have endured at the 12-month assessment. In addition, between the six-
and 12-month evaluations, one patient converted from a complete to an
incomplete injury," said Armin Curt, M.D., Professor and Chairman of the
Spinal Cord Injury Center at Balgrist University Hospital, University of
Zurich and principal investigator of the clinical trial. "Importantly, the
persistence of these sensory gains at the 12-month evaluation was seen across
more than one clinical measure. While much more clinical research needs to be
done to demonstrate efficacy, the types of changes we are observing are
unexpected and very encouraging given that these are patients in the chronic
stage of complete spinal injury." 

Mr. McGlynn added, "While we need to be cautious when interpreting data from a
small, uncontrolled trial, to our knowledge, this is the first time a patient
with a complete spinal cord injury has been converted to a patient with an
incomplete injury following transplantation of neural stem cells.We are
encouraged that the cells appear to convey clinical benefit in such severely
injured patients. We are therefore hopeful that we will see similar or greater
benefit in AIS B and C patients, who already have partial sensation and motor
function below the level of injury which could be further augmented by cell
transplantation."

Patients in the study's first cohort all suffered a complete injury to the
thoracic (chest-level) spinal cord.In a complete injury, there is no
neurological function below the level of injury, and sensory function of all
three patients was stable before transplantation of the HuCNS-SC cells.All
three patients were transplanted four to nine months after injury with a dose
of 20 million cells at the site of injury. The surgery, immunosuppression and
the cell transplants have been well tolerated by all the patients. There were
no abnormal clinical, electrophysiological or radiological responses to the
cells, and all the patients have remained neurologically stable through the
first 12 months following transplantation. Positive changes in sensitivity to
touch, heat and electrical stimuli were observed in well-defined and
consistent thoracic regions in two of the patients, while no changes were
observed in the third patient. Importantly, quantitative tests of specific
sensory function, as well as electrophysiological measures of impulse
transmission across the site of injury, show an association with the
clinical examination, providing further objective confirmation of the sensory
gains.

About the Spinal Cord Injury Clinical Trial

The Phase I/II clinical trial of StemCells, Inc.'s HuCNS-SC® purified human
adult neural stem cells is designed to assess both safety and preliminary
efficacy. Twelve patients with thoracic (chest-level) neurological injuries at
the T2-T11 level are planned for enrollment, and their injuries must have
occurred within three to twelve months prior to transplantation of the cells.
In addition to assessing safety, the trial will assess preliminary efficacy
based on defined clinical endpoints, such as changes in sensation, motor
function and bowel/bladder function. The Company has dosed the first three
patients, all of whom have injuries classified as AIS A, in which there is no
neurological function below the injury level. The injuries are classified
according to the American Spinal Injury Association Impairment Scale (AIS).
The second and third cohorts will be patients classified as AIS B and AIS C,
those with less severe injury, in which there is some preservation of sensory
or motor function.

All patients will receive HuCNS-SC cells through direct transplantation into
the spinal cord and will be temporarily immunosuppressed. Patients will be
evaluated regularly in the post-transplant period in order to monitor and
assess the safety of the HuCNS-SC cells, the surgery and the
immunosuppression, as well as to measure any recovery of neurological function
below the injury site.The Company intends to follow the effects of this
therapy long-term, and each of the patients will be invited to enroll into a
separate four year observational study after completing the Phase I/II study.

The trial is being conducted at Balgrist University Hospital, University of
Zurich, a world leading medical center for spinal cord injury and
rehabilitation, and is open for enrollment to patients in Europe, Canada and
the United States. Enrollment for the second cohort is currently underway, and
the first AIS B patient was enrolled and dosed late last year.If you believe
you may qualify and are interested in participating in the study, please
contact the study nurse either by phone at +41 44 386 39 01 or by email at
stemcells.pz@balgrist.ch.

Additional information about the Company's spinal cord injury program can be
found on the StemCells, Inc. website at
http://www.stemcellsinc.com/Therapeutic-Programs/Clinical-Trials.htm and at
http://www.stemcellsinc.com/Therapeutic-Programs/Spinal-Cord-Injury.htm,
including video interviews with Company executives and independent
collaborators.

About Balgrist University Hospital

Balgrist University Hospital, University of Zurich is recognized worldwide as
a highly specialized center of excellence providing examination, treatment and
rehabilitation opportunities to patients with serious musculoskeletal
conditions. The clinic owes its leading international reputation to its unique
combination of specialized medical services. The hospital's
carefully-balanced, interdisciplinary network brings together under one roof
medical specialties including orthopedics, paraplegiology, radiology,
anesthesiology, rheumatology, and physical medicine. More information about
Balgrist University Hospital is available at www.balgrist.ch.

About StemCells, Inc.

StemCells, Inc. is engaged in the research, development, and commercialization
of cell-based therapeutics and tools for use in stem cell-based research and
drug discovery. The Company's lead therapeutic product candidate, HuCNS-SC®
cells (purified human neural stem cells), is currently in development as a
potential treatment for a broad range of central nervous system disorders. In
a PhaseI clinical trial in Pelizaeus-Merzbacher disease (PMD), a fatal
myelination disorder in children, the Company has shown preliminary evidence
of progressive and durable donor-derived myelination in all four patients
transplanted with HuCNS-SC cells.The Company is also conducting a Phase I/II
clinical trial in chronic spinal cord injury in Switzerland and has reported
positive interim data for the first patient cohort.The Company has also
initiated a Phase I/II clinical trial in dry age-related macular degeneration
(AMD), and is pursuing preclinical studies in Alzheimer's disease. StemCells
also markets stem cell research products, including media and reagents, under
the SC Proven® brand.Further information about StemCells is available at
http://www.stemcellsinc.com.

The StemCells, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=7014

Apart from statements of historical fact, the text of this press release
constitutes forward-looking statements within the meaning of the Securities
Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended,
and is subject to the safe harbors created therein.These statements include,
but are not limited to, statements regarding whether the improvements in
sensory function seen in the Company's Phase I/II clinical study of spinal
cord injury will persist and whether they will prove to be clinically
meaningful; continued authorization to conduct a clinical trial in Switzerland
in chronic spinal cord injury; the prospect for screening and then enrolling
patients into the AIS B and AIS C cohorts; the prospect for evaluating trial
patients for changes in their sensation, motor function and bowel/bladder
function; the potential of the Company's HuCNS-SC cells to treat spinal cord
injury and other central nervous system disorders; and the future business
operations of the Company, including its ability to conduct clinical trials as
well as its other research and product development efforts. These
forward-looking statements speak only as of the date of this news release. The
Company does not undertake to update any of these forward-looking statements
to reflect events or circumstances that occur after the date hereof. Such
statements reflect management's current views and are based on certain
assumptions that may or may not ultimately prove valid. The Company's actual
results may vary materially from those contemplated in such forward-looking
statements due to risks and uncertainties to which the Company is subject,
including the fact that additional trials will be required to demonstrate the
safety and efficacy of the Company's HuCNS-SC cells for the treatment of any
disease or disorder; uncertainty as to whether the FDA or other applicable
regulatory agencies will permit the Company to continue clinical testing in
spinal cord injury or in future clinical trials of proposed therapies for
other diseases or conditions; uncertainties regarding the ability of
preclinical research, including research in animal models, to accurately
predict success or failure in clinical trials; uncertainties regarding the
Company's ability to recruit the patients required to conduct its clinical
trials or to obtain meaningful results; uncertainties regarding the Company's
ability to obtain the increased capital resources needed to continue its
current and planned research and development operations; uncertainty as to
whether HuCNS-SC cells and any products that may be generated in the future in
the Company's cell-based programs will prove safe and clinically effective and
not cause tumors or other adverse side effects; uncertainties regarding the
Company's ability to commercialize a therapeutic product and its ability to
successfully compete with other products on the market; and other factors that
are described under the heading "Risk Factors" in the Company's Annual Report
on Form 10-K for the year ended December 31, 2011, and in its subsequent
reports on Form 10-Q and Form 8-K.

CONTACT: Rodney Young
         StemCells, Inc.
         Chief Financial Officer
         (510) 456-4128
        
         Ian Stone
         Russo Partners
         (619) 308-6541

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