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StemCells, Inc. Announces Closing of Public Offering of Common Stock and Warrants

NEWARK, Calif., Dec. 22, 2011 (GLOBE NEWSWIRE) -- StemCells, Inc. (Nasdaq:STEM) today announced that it has closed its previously announced underwritten offering of an aggregate of 8,000,000 units and 8,000,000 Series B Warrants, each to purchase one unit, at a public offering price of $1.25 per unit. The Company received total proceeds, net of underwriting discounts, of approximately $9.5 million.  The proceeds will be used for general corporate purposes, including working capital and operational purposes, including product development. 

"We are pleased to have successfully closed the first tranche of this offering of up to $20 million, despite an extremely difficult financing environment for emerging life sciences companies," said Martin McGlynn, the Company's President and CEO.  "We view this funding as an important bridge to a number of potentially significant, value creating, milestones for the Company in 2012, such as the completion of our Phase I trial in Pelizaeus-Merzbacher disease, the initiation of a U.S. multicenter Phase I/II trial in age-related macular degeneration, and the dosing of the AIS B cohort in our ongoing spinal cord injury trail."

Each unit sold in the offering consisted of (i) one share of the Company's common stock, par value $.01 per share, and (ii) one Series A Warrant to purchase one share of the Company's common stock.  The Series B Warrants are exercisable immediately at an exercise price of $1.25 per unit and will expire at the close of business on May 2, 2012.  If all Series B Warrants are exercised, the Company will receive additional gross proceeds in the amount of approximately $10 million

Roth Capital Partners, LLC and Chardan Capital Markets, LLC acted as underwriters for the offering. LifeTech Capital, a division of Aurora Capital LLC, acted as financial advisor to the Company.

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.  Clinical trials are currently underway in spinal cord injury and in Pelizaeus-Merzbacher disease (PMD), a fatal myelination disorder in children. In addition, the Company plans to file an IND by year-end 2011 to initiate a clinical trial of HuCNS-SC cells in the dry form of age-related macular degeneration, and is also 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, and is developing stem cell-based assay platforms for use in pharmaceutical research, drug discovery and drug development.

The StemCells, Inc. logo is available at

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 Company's intention and ability to complete the second tranche of the offering and the expected use of net proceeds; the prospect for continued clinical development of the Company's HuCNS-SC cells in CNS disorders; the timing and nature of the final data from the Company's Phase I clinical study in PMD; the timing of patient dosing and possible outcomes of the Company's Phase I/II clinical study in spinal cord injury; and the timing and prospects associated with filing an IND to initiate a clinical trial in age-related macular degeneration.  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 Phase I clinical study will prove to be reproducible or biologically meaningful in any future clinical study; risks whether the FDA or other applicable regulatory agencies will permit the Company to continue clinical testing in spinal cord injury, PMD or in future clinical trials of proposed therapies for other diseases or conditions such as age-related macular degeneration; uncertainties regarding the potential for the Company to grow its SC Proven business and to advance the development and commercialization of stem cell-based assays for drug discovery and development; uncertainties regarding the Company's ability to obtain the increased capital resources needed to continue its current and planned research and development operations; uncertainties about the Company's ability to secure funding from any governmental agency, such as the California Institute of Regenerative Medicine; 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 results in preclinical research in animals will be indicative of future clinical results in humans; uncertainties regarding the Company's manufacturing capabilities given its increasing preclinical and clinical commitments; uncertainties regarding the validity and enforceability of the Company's patents; 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, 2010 and in its subsequent reports on Form 10-Q and Form 8-K.

CONTACT: Rodney Young
         Chief Financial Officer
         (510) 456-4128

Image: company logo

StemCells, Inc.