NEWARK, Calif., July 17, 2012 (GLOBE NEWSWIRE) -- StemCells, Inc.
(Nasdaq:STEM), today announced preclinical data demonstrating that its
proprietary human neural stem cells restored memory and enhanced
synaptic function in two animal models relevant to Alzheimer's disease
(AD). The data was presented today at the Alzheimer's Association
International Conference 2012 in Vancouver, Canada.

The study results showed that transplanting the cells into a specific
region of the brain, the hippocampus, statistically increased memory in
two different animal models. The hippocampus is critically important to
the control of memory and is severely impacted by the pathology of AD.
Specifically, hippocampal synaptic density is reduced in AD and
correlates with memory loss. The researchers observed increased
synaptic density and improved memory post transplantation. Importantly,
these results did not require reduction in beta amyloid or tau that
accumulate in the brains of patients with AD and account for the
pathological hallmarks of the disease.

The research was conducted in collaboration with a world-renowned
leader in AD, Frank LaFerla, Ph.D., Director of the University of
California, Irvine (UCI) Institute for Memory Impairments and
Neurological Disorders (UCI MIND), and Chancellor's Professor,
Neurobiology and Behavior in the School of Biological Sciences at UCI.
Matthew Blurton-Jones, Ph.D., Assistant Professor, Neurobiology and
Behavior at UCI, presented the study results.

"This is the first time human neural stem cells have been shown to have
a significant effect on memory," said Dr. LaFerla. "While AD is a
diffuse disorder, the data suggest that transplanting these cells into
the hippocampus might well benefit patients with Alzheimer's. We
believe the outcomes in these two animal models provide strong
rationale to study this approach in the clinic and we wish to thank the
California Institute of Regenerative Medicine for the support it has
given this promising research."

Stephen Huhn, M.D., FACS, FAAP, Vice President and Head of the CNS
Program at StemCells, added, "While reducing beta amyloid and tau
burden is a major focus in AD research, our data is intriguing because
we obtained improved memory without a reduction in either of these
pathologies. AD is a complex and challenging disorder. The field would
benefit from the pursuit of a diverse range of treatment approaches and
our neural stem cells now appear to offer a unique and viable
contribution in the battle against this devastating 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. The prevalence of Alzheimer's
disease is expected to increase rapidly as a result of the country's
aging population.

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(R) 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 Phase I 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 recently reported positive interim safety 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(R) 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 the prospect of the Company's HuCNS-SC cells to restore lost
memory in animal models of Alzheimer's disease; the prospect of
successful results from this research collaboration and advancing to
clinical testing in Alzheimer's disease; 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; 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
results of the Company's preclinical studies in Alzheimer's disease
will be replicated in humans; uncertainty as to whether the FDA or
other applicable regulatory agencies will permit the Company to
continue clinical testing in spinal cord injury, age-related macular
degeneration or in future clinical trials of proposed therapies for
other diseases or conditions given the novel and unproven nature of the
Company's technologies; 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 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 Forms 10-Q and 8-K.


CONTACT: Ian Stone
         Russo Partners
         (619) 308-6541