StemCells, Inc. Names Maria Millan, M.D., F.A.C.S., to Lead Its Liver Cell Transplant Program

StemCells, Inc. (NASDAQ: STEM) today announced that Dr.Maria Millan has joined the Company as Director, Liver Cell TransplantProgram. Dr. Millan, a transplant surgeon, is on leave from herpositions as Associate Professor of Surgery, Division of Multi-OrganTransplant, and Director of Pediatric Transplant Programs, Kidney &Liver, at Stanford University School of Medicine. Dr. Millan has along-standing interest in the potential of cellular transplants andhas been closely involved with the Company's liver stem cell programas a member of StemCells, Inc.'s Scientific Advisory Board. She joinsStemCells, Inc. now to lead the Company's efforts to bring itscandidate liver stem cell into the clinic.

"As previously announced, our scientists have been workingdiligently on our candidate human liver stem cell, on which we filed apatent application in 2002, to further elucidate its biologicalproperties in vivo in various animal models. We are now sufficientlysatisfied with the performance of this cell in vivo that we arecommitting the resources necessary to enable clinical testing as soonas possible," said Martin McGlynn, President and Chief ExecutiveOfficer of StemCells, Inc. "We are thrilled that we have been able toattract a clinician of Dr. Millan's experience and credentials to theCompany to lead this effort. This is a very exciting time forStemCells, Inc. In addition to this initiative in the liver field, ourhuman neural stem cell product, HuCNS-SC(TM), has been cleared by theFDA for clinical testing in Batten disease and we look forward todosing the first patient in the not too distant future."

"As transplant physicians and surgeons, we are fortunate to beable to treat patients suffering from end-stage organ failure withorgan transplantation. However, there are so many individuals who areunable to receive organ transplants in a timely fashion and asignificant number who are not surgical candidates because of severeco-existing medical conditions. I have great interest in bringingcellular therapy into clinical practice as a necessary alternative towhole organ transplant," said Dr. Millan. "I believe that the liverstem cell identified by the Company's research team shows greatpotential as a candidate cellular therapeutic for treating diseases ofthe liver and I am glad to have the opportunity to work with theStemCells team."

Dr. Millan brings a strong scientific and medical background inliver, pancreas and kidney transplantation. She was an Investigator onnumerous grants related to transplantation science and has co-authoredpeer-reviewed research and review articles in prestigious journalssuch as Transplantation, Journal of Experimental Medicine, and Journalof Immunology. She is licensed by the Medical Board of California andcertified by the American Board of Surgery and the American Society ofTransplant Surgeons. Dr. Millan is currently a member of nine nationalor international medical, surgical and transplant societies.

Dr. Millan received her M.D. from the New Jersey Medical School,and was a Resident and Chief Resident in General Surgery at HarvardMedical School/New England Deaconess Hospital and the Beth IsraelDeaconess Medical Center in Boston, Mass. She received a researchfellowship in Immunobiology at Harvard Medical School. Dr. Millan helda Fellowship in Multi-Organ Transplant Surgery at Stanford MedicalSchool in 1998-99, after which she remained at the school as a memberof the faculty.

About StemCells, Inc.

StemCells, Inc. is a clinical stage biotechnology company focusedon the discovery, development and commercialization of stem cell-basedtherapeutics to treat diseases of the central nervous system, liverand pancreas. The Company's stem cell programs seek to repair orrepopulate neural or other organ tissue that has been damaged or lostas a result of disease or injury. To date, the Company has discoveredthe human neural stem cell as well as candidate human liver andpancreas stem cells. Recently, the U.S. Food and Drug Administrationauthorized the Company to initiate clinical testing of its proprietaryneural stem cell product, HuCNS-SC, in Batten disease, a rare andalways fatal neurodegenerative disease. StemCells is solely focused onstem cell research and development and has approximately 40 U.S. and100 non-U.S. patents, as well as more than 100 patent applicationspending worldwide. Further information about the Company is availableon its web site at: www.stemcellsinc.com.

About Liver Disease

According to the American Liver Foundation (AFL), 25 millionAmericans, or about one in every 10, are or have been afflicted with aliver, biliary or gallbladder disease. Over 20,000 Americans die eachyear from chronic liver disease and cirrhosis; over 350,000 people arehospitalized each year due to cirrhosis. It is estimated that 25,000people are infected with hepatitis C each year, and 10 to 12 thousandpeople die of it each year. According to Center for Disease controlestimates, the number of annual deaths from hepatitis C will triple inthe next 10 - 20 years. In addition, AFL states that 1.25 millionpeople are chronically infected with hepatitis B, which kills 5 to 6thousand people a year. Organ transplantation is the only availabletherapy for end-stage liver failure at this time. Approximately 5,600liver transplants were performed in 2003. Because of the shortage oforgans, it is estimated that over 1,800 people died that year whilewaiting for a liver transplant. The United Network for Organ Sharingreports that about 5,850 liver transplants were performed in 2004 andabout 4,700 in 2005. There are currently over 17,000 people waitingfor a liver for transplantation.

Apart from statements of historical facts, the text of this pressrelease constitutes forward-looking statements regarding, among otherthings, the future business operations of StemCells, Inc. (the"Company") and its ability to conduct clinical trials as well as itsresearch and product development efforts. The forward-lookingstatements speak only as of the date of this news release. StemCellsdoes not undertake to update any of these forward-looking statementsto reflect events or circumstances that occur after the date hereof.Such statements reflect management's current views and are based oncertain assumptions that may or may not ultimately prove valid. TheCompany's actual results may vary materially from those contemplatedin the forward-looking statements due to risks and uncertainties towhich the Company is subject, including uncertainty regarding thepotential performance of the Company's candidate liver stem cell as atherapeutic agent; uncertainty regarding whether a suitable site forthe Company's clinical trial in Batten disease will be identified,whether the Institutional Review Board approval that is requiredbefore a clinical trial may go forward will be obtained for any site,and whether results obtained in the animal models of Infantile NCL,spinal cord injury, or other diseases and conditions will be able tobe translated into treatment for humans; uncertainty as to whether theFDA will permit the Company to continue clinical testing in the Battendisease trial or in future clinical trials of proposed therapies forother diseases or conditions despite the novel and unproven nature ofthe Company's technology; uncertainties regarding the Company'sability to obtain the capital resources needed to continue its currentresearch and development operations and to conduct the research,preclinical development and clinical trials necessary for regulatoryapprovals; uncertainty regarding the validity and enforceability ofthe Company's patents; uncertainty as to whether HuCNS-SC and anyproducts that may be generated in the future in the Company's stemcell programs, including the liver program, will prove safe andclinically effective and not cause tumors or other side effects;uncertainty as to whether the Company will achieve revenues fromproduct sales or become profitable; and other factors that aredescribed in Exhibit 99 to the Company's Annual Report on Form 10-Ktitled "Cautionary Factors Relevant to Forward-Looking Statements."