(NBS) Awarded $147,765 NIH Grant for Treating Scleroderma Wounds

NEW YORK, Sept. 12, 2013  — NeoStem, Inc. (Nasdaq:NBS) (“NeoStem” or the “Company”), a leader in the emerging cellular therapy industry, today announced that it has received an award under the Small Business Innovative Research Program (“SBIR”) of $147,765 for the “Development of Adult Pluripotent Very Small Embryonic Like (VSEL) Stem Cells to Treat Skin Wounds in Scleroderma” from the National Institutes of Health, National Institute of Arthritis and Musculoskeletal and Skin Diseases (“NIH-NIAMS”). This award will fund studies to investigate the potential of very small embryonic-like stem cells (“VSELs™”) in treating difficult to heal wounds in an animal model of scleroderma. The grant will support research to be headed by Denis O. Rodgerson, Ph.D., Director of Grants and Academic Liaison of NeoStem, and Dr. Vincent Falanga, M.D., The Barbara A. Gilchrest Professor of Dermatology and Professor of Biochemistry at the Boston University School of Medicine.

The study will employ the tight skin (“Tsk”) mouse to test the potential wound healing capabilities of autologous VSELs™ in treating difficult to heal skin ulcers in this disease. The Tsk mouse carries a heterogeneous mutation for the fibrillin-1 gene and rapidly exhibits the characteristic tight and thickened skin phenotype of scleroderma patients. Depending on the results of the study, the Company may qualify for up to an additional $1.5 million phase 2 grant for the indication from NIH-NIAMS.

Over 300,000 people in the United States live with scleroderma, an autoimmune, connective tissue disorder which causes fibrosis of the skin and internal organs. Patients with scleroderma have an overproduction of extracellular matrix, and type 1 and 3 collagen. The disease involves vascular breakdown where the blood vessels in the skin degenerate and are replaced by collagen to form fibrotic tissue. The sclerotic tissue can also lead to digital ischemia and ulcers. Because of the vasculopathy, there is diminished blood supply to the lesion making the ulcers difficult to heal, prone to infection and possible progression to gangrene can occur that requires amputation. The ischemic ulcers are frequent, painful, and cause significant morbidity. There is presently no effective treatment of scleroderma or the ischemic ulcers.

“Our collaboration with Dr. Falanga, a recognized expert in the management of chronic wounds and fibrosis, offers NeoStem a solid foundation to advance its investigation into the use of human VSELs™ in treating skin wounds and a host of other degenerative diseases and disorders in humans, including scleroderma,” said Dr. Denis O. Rodgerson. “This study has the potential to advance treatments that could one day help patients suffering from this and other debilitating autoimmune diseases.”

Dr. Vincent Falanga added, “The NIH award will allow us to explore the great potential of these very special stem cells that reside in the bone marrow and that we believe are able to convert to many other cell types and accelerate healing.”

“NeoStem is pleased that the NIH has awarded this funding to support NeoStem’s continued development of VSEL™ Technology as a therapeutic to heal chronic dermal wounds,” said Dr. Robin L. Smith, Chairman and CEO of NeoStem. “We look forward to this study, as well as studies by other academic collaborators, serving as a catalyst for the Company in its investigation of VSEL™ Technology therapeutics for multiple clinical indications.”

NeoStem continues to develop its VSEL^TM Technology platform in pre-clinical models and expects to advance into early clinical studies that assess the therapeutic potential of VSEL^TM Technology in wound care, bone regeneration and/or macular restoration. Recent pre-clinical data in animal models suggest that VSELs™ may be capable of developing into cells of all three germ layers which, if substantiated by further research, could imply significant potential for restorative healing. Unlike in the case of classically defined “pluripotent” stem cells, it is believed that VSELs™ do not contribute to teratoma formation. Independent investigators in preclinical models have observed the regenerative potential of VSELs™ and NeoStem will continue to support preclinical and early clinical studies to further assess their regenerative potential.

This research is supported by the National Institute of Arthritis And Musculoskeletal And Skin Diseases of the National Institutes of Health under Award Number 1R43AR062432-01A1. The content of this press release is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health.

About NeoStem, Inc.

NeoStem, Inc. (“NeoStem” or the “Company”) is a leader in the emerging cellular therapy industry. Our business model includes the development of novel proprietary cell therapy products as well as operating a contract development and manufacturing organization providing services to others in the regenerative medicine industry. The combination of a therapeutic development business and revenue-generating service provider business provides the Company with capabilities for cost effective in-house product development and immediate revenue and cash flow generation.

For more information, please visit: www.neostem.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect management’s current expectations, as of the date of this press release, and involve certain risks and uncertainties. Forward-looking statements include statements herein with respect to the successful execution of the Company’s business strategy, including with respect to the Company’s research and development and clinical evaluation efforts as well as efforts towards commercialization of cellular therapies, including with respect to AMR-001, the future of the regenerative medicine industry and the role of stem cells and cellular therapy in that industry and the Company’s ability to successfully grow its contract development and manufacturing business. The Company’s actual results could differ materially from those anticipated in these forward- looking statements as a result of various factors. Factors that could cause future results to materially differ from the recent results or those projected in forward-looking statements include the “Risk Factors” described in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2013 and in the Company’s periodic filings with the SEC. The Company’s further development is highly dependent on future medical and research developments and market acceptance, which is outside its control.

CONTACT: NeoStem
         Eric Powers
         Manager of Communications and Marketing
         Phone: +1-212-584-4173
         Email: epowers@neostem.com