StemCells, Inc. Presents Two-Year Pelizaeus-Merzbacher Disease (PMD) Data Suggesting Departure From Natural History of the

StemCells, Inc. Presents Two-Year Pelizaeus-Merzbacher Disease (PMD) Data
Suggesting Departure From Natural History of the Disease

NEWARK, Calif., Aug. 2, 2013 (GLOBE NEWSWIRE) -- StemCells, Inc. (Nasdaq:STEM)
today presented data which show that two years after transplantation of the
Company's proprietary HuCNS-SC® cells (purified human neural stem cells) into
patients with Pelizaeus-Merzbacher disease (PMD), the evidence of myelination,
by magnetic resonance imaging (MRI), is more pronounced compared to one year
post-transplantation, the gains in neurological function reported after one
year were maintained, and there were no safety concerns. Patients with PMD
have a defective gene which leads to insufficient myelin in the brain,
resulting in progressive loss of neurological function and death. The
neurological and MRI changes suggest a departure from the natural history of
the disease and may represent signals of a clinical effect.The data was
presented today by Stephen Huhn, MD, FACS, FAAP, Vice President, CNS Clinical
Research at StemCells, Inc., at the 2013 Pelizaeus-Merzbacher Disease
Symposium and Health Fair being held at Nemours/Alfred I. duPont Children's
Hospital in Wilmington, Del.

"We are encouraged that the MRI data continue to indicate new and durable
myelination related to the transplanted cells and that the data is even
stronger after two years compared to one year," said Dr. Huhn. "Even in the
context of a small open-label study, these MRI results, measured at time
points long after transplantation, make an even more convincing case that the
HuCNS-SC cells are biologically active and that their effect is measureable,
sustainable and progressive. Our challenge now is to reach agreement with the
FDA on how best to correlate changes in MRI with meaningful clinical benefit,
as this will be a critical step in determining a viable registration pathway
for PMD."

In the Company's Phase I trial, which was conducted at the University of
California, San Francisco, four patients with connatal PMD, the most severe
form of the disease, were enrolled and transplanted with HuCNS-SC cells.The
patients were followed for twelve months after transplantation, during which
time they underwent intensive neurological assessments and magnetic resonance
imaging at regular intervals.The Phase I trial results indicate a favorable
safety profile for the HuCNS-SC cells and the transplantation
procedure.Analysis of the MRI data showed changes consistent with increased
myelination in the region of the transplantation, which progressed over time
and persisted after the withdrawal of immunosuppression at nine months.The
results support the conclusion of durable cell engraftment and donor
cell-derived myelin in the transplanted patients' brains.In addition,
clinical assessment revealed small but measureable gains in motor and/or
cognitive function in three of the four patients; the fourth patient remained
clinically stable.The Phase I trial results were published in October 2012 in
Science Translational Medicine, the peer review journal of the American
Association for the Advancement of Science.Upon completion of the Phase I
trial, all four patients were enrolled into a long-term follow up study, which
is designed to follow the patients for four more years.

The Pelizaeus-Merzbacher Disease Symposium and Health Fair is intended to help
educate families and healthcare professionals about PMD and related
disorders.Sponsors include The PMD Foundation, a non-profit organization
formed to raise awareness of the disease, create support for people with PMD,
reduce misdiagnosis of PMD, and fund scientific research, and Nemours
Biomedical Research, a branch of the Nemours Foundation, which is dedicated to
improving the health and health care of all children.

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) at two trial sites in the US.In addition, the Company is
pursuing preclinical studies in Alzheimer's disease, with funding support from
the California Institute for Regenerative Medicine (CIRM).  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 U.S.
securities laws, and is subject to the safe harbors created therein. These
statements include, but are not limited to, statements regarding the future
business operations of StemCells, Inc. (the "Company"); the prospect for
continued clinical development of the Company's HuCNS-SC cells in CNS
disorders; and the timing and nature of data from the Company's clinical
studies in PMD.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 uncertainties with respect to the fact that additional
trials will be required to confirm the safety and demonstrate the efficacy of
the Company's HuCNS-SC cells for the treatment of spinal cord injury, PMD or
any other condition; uncertainties about whether myelination formed by donor
cells, if any, will have any biologic effect; uncertainties about whether
preliminary data in any PhaseI clinical study will prove to be reproducible
or biologically meaningful; risks whether the FDA or other applicable
regulatory agencies will permit the Company to continue clinical testing of
its HuCNS-Sc cells, ; uncertainties about the design of future clinical trials
and whether the Company will receive the necessary support of a clinical trial
site and its institutional review board to pursue future clinical trials in
spinal cord injury, PMD, AMD, or in proposed therapies for other diseases or
conditions; 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 whether data
generated in clinical studies of one disease or condition will be predictive
of outcomes in other diseases or conditions; uncertainties regarding the
Company's manufacturing capabilities given its increasing preclinical and
clinical commitments; uncertainties as to whether the Company will become
profitable; and other factors that are described under the heading "Risk
Factors" disclosed in Part I, Item 1A in the Company's Annual Report on Form
10-K for the year ended December 31, 2012 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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