StemCells, Inc. Awarded Broad U.S. Patent Covering Expandable Liver Cells

Company Has Shown Cells Engraft and Have Robust Biologic Activity in the Liver

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| Source: StemCells, Inc.

NEWARK, Calif., Oct. 12, 2012 (GLOBE NEWSWIRE) -- StemCells, Inc. (Nasdaq:STEM) today announced the issuance of U.S. Patent Number 8,283,164 titled "Liver engrafting cells, assays, and uses thereof." The patent broadly covers purified populations of human liver cells, including the Company's human liver engrafting cells (hLEC). hLEC cells were first isolated by Company researchers in the late 1990s, and Company scientists have repeatedly demonstrated the cells' engraftment and robust bioactivity in vivo and that they are expandable. While the Company's hLEC cells are purified from donated adult livers not suitable for transplant, the newly issued '164 patent importantly claims cells independent of tissue source. Therefore, the '164 patent has potential relevance to those deriving liver cells from iPS or ESC platforms. The term of the '164 patent extends into 2022.

"This new patent extends our IP protection around hLEC cells and should be of interest to those searching for an expandable human liver cell," said Martin McGlynn, President and Chief Executive Officer of StemCells, Inc. "Because the liver is such a key organ, finding an expandable, reliable and well-characterized liver cell population is an important step forward in both medical research and drug development. For example, liver disease afflicts some 25 million Americans and transplantation of an expandable liver cell could potentially address many of the shortcomings of whole liver transplantation. Moreover, the right liver cells could make profound contributions to drug screening and toxicity testing."

In October 2011, StemCells formed a wholly-owned subsidiary to focus on both the therapeutic and research tool applications of its hLEC technologies and to serve as an investment vehicle for those interested in a "pure play" liver cell company. The '164 patent is one of several patents issued to the Company on a worldwide basis claiming expandable liver cells, including U.S. Patent Nos. 7,811,818 and 7,211,404, Japan Patent No. 4445876, Australian Patent No. 2002315392, and European Patent No. 1406998. Patent prosecution in the family is ongoing on a worldwide basis, including China application 02816528.4.

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.  The Company recently reported results from a Phase I clinical trial in Pelizaeus-Merzbacher disease (PMD), a fatal myelination disorder in children. The trial results showed 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 a Phase I/II clinical trial in dry age-related macular degeneration in the United States. In addition, the Company is pursuing preclinical studies of its HuCNS-SC cells 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.

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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 prospect of enforcing the Company's intellectual property against infringers, the potential breadth and length of patent protection in the United States or in any other geography; and the likelihood that any of the Company's intellectual property will be found to be valid and enforceable. 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 Company's ability to obtain the increased capital resources needed to continue its current operations and to conduct the research, preclinical development and clinical trials necessary for regulatory approvals and for continued patent prosecution efforts; uncertainty regarding the validity and enforceability of the Company's existing patents; 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.

Rodney Young
StemCells, Inc.
Chief Financial Officer
(510) 456-4128

Ian Stone
Russo Partners
(619) 308-6541