NeoStem CEO's Letter to Shareholders

NeoStem CEO's Letter to Shareholders

NEW YORK, March 19, 2013 (GLOBE NEWSWIRE) --

Dear NeoStem Shareholders,

Regenerative medicine is the catalyst to radically change the practice of
medicine from that of chronic treatment to that of cure. The shift is away
from treating the symptoms with synthetic drugs towards treating the
underlying cause of disease by using one's own natural cells. Cell therapy
holds the promise of prolonging and, most importantly, enhancing quality of
life. This is the future of medicine and it is our singular mission to lead
the way.

NeoStem (NYSE MKT:NBS) is an integrative force in the cell therapy industry.
By vertically integrating the collection, storage and processing of cellular
material with the development, manufacture, distribution, and delivery of cell
therapy products, we are positioned to capitalize on the emerging cell therapy
industry. We provide such contract development and manufacturing services for
clients and we also have a proprietary pipeline of cell therapy products in
development designed to address unmet medical needs, including cardiovascular
disease (MI and CHF), immune disorders (type 1 diabetes, steroid resistant
asthma, organ rejection) and tissue repair(wounds, osteoporosis, macular
degeneration, etc). Our most advanced cardiovascular asset, AMR-001, is very
exciting (see video at www.neostem.com/videos.html) and is built upon a very
strong intellectual property portfolio.

PreSERVE Phase 2 Clinical Trial –

Presently, with thirty two (32) clinical trial sites having enrolled over
ninety (90) patients, Amorcyte has enrolled over half of the scheduled
patients in its PreSERVE-AMI Phase 2 clinical trial.We are also pleased to
report that an additional twenty (20) clinical trial sites are in the process
of coming on board. In the PreSERVE trial, stem cells are collected from the
patient's bone marrow and enriched, not expanded, to increase potency. These
cells are stabilized and have a 72-hour shelf life. The cells are infused via
the infarct-related artery 5 to 11 days following a stent placement – the
optimal time frame to prevent adverse ventricular remodeling. There, they are
being tested to save damaged tissue that would otherwise die within days or
weeks, consequently preserving cardiac function and potentiallypreventing
clinical adverse events by releasing chemicals and proteins that grow blood
vessels through a process called angiogenesis.We received six and twelve
month evaluations of our trial by the Data Safety Monitoring Board confirming
that there are no safety signals that would preclude the trial from continuing
as planned and expect to complete enrollment in 2013 with data read out 6-8
months after the last patient is enrolled.

An initial assessment of enrollment data from the PreSERVE Phase 2 clinical
trial found that one third of patients screened for enrollment who had
suffered an ST segment elevation acute myocardial infarction (STEMI) have a
persistent low ejection fraction 3-4 days post infarction. Based on this
initial assessment of enrollment data and assuming that AMR-001 is ultimately
approved by the FDA for use in the population NeoStem is studying and there
are not further restrictions implemented in Phase 3 studies, the Company
believes that there is a large eligible U.S. market for AMR-001 in the
treatment of heart attack patients.

We also believe that the AMR-001 platform may be applicable to other
conditions resulting from underlying ischemia and expect to file an IND in
2013 for the use of AMR-001 to arrest the progression of congestive heart
failure.

Amorcyte Intellectual Property Portfolio –

AMR-001 now has the benefit of 3 (soon to be 4) U.S patents,2 patents (soon
to be 3) outside of the U.S. and 31 additional patents pending around the
world.In brief, our granted U.S. patents are as follows:

U.S. Patent No. 7,794,705 covers a cell-based composition used to prevent
deterioration of heart muscle post a heart attack. The composition contains a
therapeutically effective amount of autologous mononuclear cells enriched for
CD34 cells which further contain a subpopulation of biologically active
CD34+/CXCR-4+ cells.With the grant of U.S. Patent 8,088,370, the AMR-001
product's use was extended beyond heart attack to treatment for any vascular
injury caused by vascular insufficiency.Amorcyte's claims in U.S. Patent
8,343,485 similarlycover a cell-based therapy to repair a vascular injury
caused by vascular insufficiency, but the product's CD34+ cell content
limitation was greatly expanded in this patent to cover purities of almost any
amount, and the product serum content was also expanded. Amorcyte's most
recently allowed claims cover AMR-001 for the treatment of progressive
myocardial injury due to vascular insufficiency, including the disease
progression that leads to heart failure, and have added claims that cover
freezing cells and using them in a treatment regimen that includes multiple
doses over time.

VSEL™ Technology Platform -

NeoStem's pipeline extends beyond cardiovascular diseases. The use of human
VSELs^TM for regenerative medicine presents the possibility of capturing the
key advantages associated with embryonic stem cells without the ethical or
moral dilemmas associated with their use, or the potential negative biological
effects associated with embryonic stem cells, such as their propensity to form
tumors. VSELs^TM offer the advantage of using autologous stem cells (i.e., the
patient's own cells) for therapy, as opposed to having to rely on donor cells
that are susceptible to immune rejection. Our research has identified cells in
human blood and bone marrow that have many of the key properties described for
murine VSELs^TM. This research includes evidence of primitivism, pluripotency
and tri-lineage differentiation. These observations provide the groundwork for
the development of VSEL^TM therapies to regenerate or repair damaged or
diseased tissues in human subjects. Initial experiments suggest that, in
certain contexts, VSELs may have a regenerative "potency" that is orders of
magnitude greater than mesenchymal stem cells.

We seek to pursue and commercialize therapeutic VSEL^TM products in selected
clinical applications and markets based on unmet medical needs. Largely
through grant funding, we are exploring VSEL^TM stem cell treatments for
periodontitis, healing complex skin and soft tissue wounds, corneal
regeneration and repair, age-related macular degeneration, nerve regeneration
and acute radiation. We anticipate that a single clinical manufacturing
process will be developed for these indications, collectively, and that the
major pacing item will be the generation of preclinical data to support an IND
application for a Phase 1 clinical trial. We expect to file an IND to commence
human clinical studies treating periodontitis in late 2013 or early 2014.

Athelos -

Through our Athelos subsidiary (which is 20% owned by Becton-Dickinson), we
are developing therapeutic products using a person's immune cells to treat
disorders of the immune system. Many immune-mediated diseases are a result of
an imbalance in the immune system whereby inflammatory cells go unchecked.
Therapy using regulatory T cells (Treg) represents a novel approach to
restoring immune balance by enhancing Treg cell number and function to inhibit
pathogenic immune responses. Through exclusive world-wide licenses, Athelos
has secured the rights to a broad patent estate within the Treg field,
covering natural Tregs (nTregs), induced Tregs (iTregs) and methods of
treating or preventing certain conditions and/or diseases. Both types of Tregs
have been shown in pre-clinical studies to be important in modulating
autoimmune and inflammatory diseases. Natural Tregs have been evaluated by
others in early phase human clinical trials and shown to be safe with
suggestions of clinical benefit in graft-versus-host disease. Both nTregs and
iTregs have demonstrated the ability to treat conditions like diabetes,
inflammatory bowel disease and organ transplant tolerance in animal models of
disease.

This ongoing development program is establishing methods to isolate and expand
human nTregs for large scale manufacturing to enable early clinical trials. We
are exploring potential relationships with key leaders and academic
investigators with sufficient preclinical data to support an IND application.
We plan to investigate the clinical feasibility of nTreg-based therapeutics to
prevent and/or treat type 1 diabetes, graft vs. host disease, steroid
resistant asthma, lupus, multiple sclerosis and solid organ transplant
rejection and expect to file an IND with the FDA in 2013 to commence human
clinical studies in one of these disease indications.

Progenitor Cell Therapy -

NeoStem is rapidly emerging as a technology and market leading company in the
fast developing cell therapy market. Our multifaceted business strategy
includes Progenitor Cell Therapy (PCT), a state-of-the-art contract
development and manufacturing organization (CDMO) . PCT increased revenues
over 40% in 2012 from 2011. Acquisition of this contract development and
manufacturing business brought cell therapy expertise in-house and allows us
to cost-effectively develop cellular therapies for chronic unmet medical needs
for both clients and for internal development. PCT has provided services to
over 100 clients in its 14-year history, and is the only contract
manufacturing organization to have worked with a client's product (Dendreon,
Inc.'s Provenge) through all of the phases of clinical trials and ultimately
to FDA approval. PCT offers its clients and NeoStem cell processing and
development capabilities on both the East and West Coasts of the U.S and has
plans to expand internationally. PCT has also builta strong foundation of
services that cater to the industry as a whole, reducing our reliance on the
success of our own varied technology platforms in that we still have the
opportunity to capture growing revenues from industry growth. Furthermore,
PCT's manufacturing revenues would increase significantly should a client
progress through Phase I, II, and III trials and select us to be their
commercialization partner where larger numbers of cell products are needed.

Stem for Life Foundation -

NeoStem also understands that, in order to support innovative and
transformative technologies, one needs to promote education and funding for
research and this resulted in the formation of the Stem for Life foundation
(SFLF) which is a non-sectarian, non-partisan public charity. SFLF engages in
continuous world-wide efforts to educate and raise awarenessof theparadigm
shift occurring in medicine through advancements in adult stem cell science.
SFLF partners with best in class researchers and clinicians dedicated to
developing critical new adult stem cell treatment options which hold the
promise of transforming clinical outcomes and reducing overall healthcare
costs. SFLF resources are committed to fostering and reinforcing a global
awareness of the promise of adult stem cell therapies with the paramount goal
of alleviating human suffering, supporting the advancement of adult stem cell
research and facilitating collection of adult stem cells among first
responders.

SFLF and NeoStem have partnered with the Vatican's Pontifical Council for
Culture on a joint initiative to foster the highest levels of world-class
scientific research on adult stem cells and explore the cultural, ethical and
human implications of their use and their promise for helping to alleviate
human suffering. The Second International Vatican Adult Stem Cell Conference:
Regenerative Medicine – A Fundamental Shift in Science & Culture will be held
within Vatican City April 11-13, 2013. Many of the world's leading media
outlets and news wiresplan on covering the conference with the exposure going
beyond the Vatican walls and flowing into leading newspapers and magazines
throughout the United States and abroad.

Expanded Board -

Finally, we are pleased that last month Stephen Potter joined the NeoStem
Board of Directors.Stephen has been involved with the cellular therapy
industry since its early days.He was most recently the Senior Vice President
of Operations and Corporate Development for Osiris Therapeutics, Inc. where he
worked as a member of the senior leadership that achieved one of the first
approvals for a stem cell therapy forProchymal.Previously he was Senior Vice
President of Corporate and Business Development at Genzyme Corporation.We
look forward to Stephen's insight as we look ahead to achieving the next level
in our development.

NeoStem is uniquely positioned to capture the value of this market and lead
the worldwide regenerative medicine market.We will continue to strengthen our
balance sheet, add industry expertise to our management and pursue the
expansion of the business through acquisitions and look for strategic
partnerships to aggressively advance our pipeline.

Regards,

Robin Smith, MD, MBA

About NeoStem, Inc.

NeoStem, Inc. ("NeoStem" or the "Company") is a leader in the emerging
cellular therapy industry. Our business model includes the development of
novel proprietary cell therapy products as well as operating a contract
development and manufacturing organization ("CDMO") providing services to
others in the regenerative medicine industry. The combination of a therapeutic
development business and revenue-generating service provider business provides
the Company with capabilities for cost effective in-house product development
and immediate revenue and cash flow generation. www.neostem.com

Forward-Looking Statements for NeoStem, Inc.

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements reflect management's current expectations, as of the date of this
press release, and involve certain risks and uncertainties. Forward-looking
statements include statements herein with respect to the successful execution
of the Company's business strategy, including with respect to the Company's
research and development and clinical evaluation efforts for cellular
therapies, including with respect to AMR-001, the future of the regenerative
medicine industry and the role of stem cells and cellular therapy in that
industry and the Company's ability to successfully grow its contract
development and manufacturing business. The Company's actual results could
differ materially from those anticipated in these forward- looking statements
as a result of various factors. Factors that could cause future results to
materially differ from the recent results or those projected in
forward-looking statements include the "Risk Factors" described in the
Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 11, 2013 and in the Company's periodic filings with the
Securities and Exchange Commission. The Company's further development is
highly dependent on future medical and research developments and market
acceptance, which is outside its control.

CONTACT: Trout Group
         Lauren Kwiecinski, Senior Associate
         Phone: +1-646-378-2934
         Email: lkwiecinski@troutgroup.com

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