StemCells, Inc. Launches Alzheimer's Disease Program Supported by California Institute for Regenerative Medicine

StemCells, Inc. Launches Alzheimer's Disease Program Supported by California
Institute for Regenerative Medicine

Company Has Received First Disbursement of $3.8 Million

NEWARK, Calif., July 30, 2013 (GLOBE NEWSWIRE) -- StemCells, Inc.
(Nasdaq:STEM) today announced that it has formally launched its Alzheimer's
disease program, which is being supported by the California Institute for
Regenerative Medicine (CIRM). The goal of the project is to file, within four
years, an Investigational New Drug (IND) application with the U.S. Food and
Drug Administration to evaluate the Company's proprietary HuCNS-SC® product
candidate (purified human neural stem cells) as a potential therapeutic in the
treatment of Alzheimer's disease. CIRM has agreed to provide approximately
$19.3 million to the Company in the form of a forgivable loan to help fund
preclinical development and IND-enabling activities, and the Company recently
received an initial disbursement of $3.8 million from CIRM. The funding was
awarded under CIRM's Disease Team Therapy Development Award program (RFA
10-05) in September 2012.

"With CIRM's support, we have taken the first steps towards the development of
a novel cell-based therapeutic for use in the treatment of Alzheimer's
disease," commented Eliseo Salinas, MD, Executive Vice President and Head of
Research & Development at StemCells, Inc. "Today, there are no good treatment
options for Alzheimer's disease; in particular, there are no approved drugs
which alter the progression of the disease.Furthermore, in the past few
years, several drugs have failed in late-stage clinical trials.These drugs,
like most of the treatments currently in development, target a single modality
in a complex disease believed to result from a biological cascade probably
triggered by multiple genetic and environmental factors.Cell-based therapies
have the potential to provide a therapeutic benefit by acting on several
relevant biological targets under the regulation of the host."

"We know from the preclinical work that our proprietary HuCNS-SC cells survive
in the toxic environment of the Alzheimer's disease brain and restore memory
under the regulation of the host.So rather than targeting a single mechanism
in this cascade, our strategy is to provide healthy, self-renewing cells that
can halt or slow disease progression and therefore preserve or restore
cognitive function.Even a modest slowing of disease progression could
translate into substantial improvements in quality of life for patients and
families, as well as significant economic savings for society." 

StemCells, Inc. will evaluate its HuCNS-SC cells as a potential therapeutic in
Alzheimer's disease in collaboration with researchers at the University of
California, Irvine (UCI) led by Frank LaFerla, Ph.D., a world-renowned
researcher in the field, and Matthew Blurton-Jones, Ph.D.In July 2012, Dr.
Blurton-Jones presented data at the Alzheimer's Association Annual Meeting
demonstrating that the Company's neural stem cells restored memory and
significantly enhanced synaptic function in two animal models relevant to
Alzheimer's disease.Importantly, these results were observed in the presence
of amyloid deposition and increased tau, two toxic hallmarks of the disease,
and provide the basis for a fundamentally different and novel approach to the
treatment of Alzheimer's disease.

About Alzheimer's Disease

Alzheimer's disease is a progressive, fatal neurodegenerative disorder that
results in loss of memory and cognitive function. Today there is no cure or
effective treatment option for patients afflicted by Alzheimer's disease.
According to the Alzheimer's Association, approximately 5.4 million Americans
have Alzheimer's disease, including nearly half of people aged 85 and older,
and the prevalence of the disease is expected to increase rapidly as a result
of the country's aging population. Moreover, the costs of the disease to
society are significant - recent estimates range from $150 to $200 billion per
year in the United States, with approximately three-quarters of those costs
resulting from daily care either at home or in nursing facilities.

About CIRM

CIRM was established in November 2004 with the passage of Proposition 71, the
California Stem Cell Research and Cures Act. The statewide ballot measure,
which provided $3 billion in funding for stem cell research at California
universities and research institutions, was overwhelmingly approved by voters,
and called for the establishment of an entity to make grants and provide loans
for stem cell research, research facilities, and other vital research
opportunities. A list of grants and loans awarded to date may be seen here:
http://www.cirm.ca.gov/for-researchers/researchfunding.

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 Canada and has
reported positive interim data for the first three patients.The Company is
also conducting 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.

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; the potential of the Company's
HuCNS-SC cells to treat a broad range of central nervous system disorders such
as Alzheimer's disease; the prospect of initiating a clinical trial in
Alzheimer's disease; the timing and prospects for funding by the California
Institute for Regenerative Medicine; and the future business operations of the
Company. 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 results of
the Company's preclinical studies will be replicated in humans; uncertainties
about whether the Company will satisfy, and continue to satisfy, all
preconditions for funding from CIRM; uncertainties about the Company's ability
to continue to satisfy theobligations under the Company's various loan
agreements and repay these loans when due; 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; and other factors that are
described under the heading "Risk Factors" in the Company's Annual Report on
Form10‑K for the year ended December 31, 2012, and in its subsequent reports
on Forms 10-Q and 8-K.

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

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