NeoStem Receives Notification of Second Year NIH Grant Award for First Clinical Study of VSEL™ Technology in Periodontitis

NeoStem Receives Notification of Second Year NIH Grant Award for First Clinical Study of VSEL™ Technology in Periodontitis

September 13, 2013

New York, Sept. 13, 2013 — NeoStem, Inc. (NASDAQ:NBS) (“NeoStem” or the “Company”), an emerging leader in the fast growing cell therapy industry, today announced that it has been awarded funds for the second year of a two year grant totaling $1,221,854 for “Repair of Bone Defects with Human Autologous Pluripotent Very Small Embryonic-Like Stem Cells (VSEL),” from the National Institute of Dental & Craniofacial Research (“NIDCR”), a division of the National Institutes of Health (“NIH”). This peer reviewed grant is to support a Phase 2 investigation and first approved NIH clinical study of VSELs™ in humans. Enrollment for this study is expected to begin in 2014.

VSEL™ Technology, an autologous therapy derived from a patient’s own stem cells, is being developed for use in the regeneration of bone tissue damaged by periodontitis. The Phase 2 trial will be managed by Denis O. Rodgerson, Ph.D., Director of Grants and Academic Liaison for NeoStem, in collaboration with co-investigators Drs. Russell Taichman and Laurie McCauley of the University of Michigan. The award comprised of $706,682 for the first year and $515,172 for the second year of the project, and will cover the cost of the Investigational New Drug (“IND”) submission to the FDA for the product candidate.

The required preclinical data, cell manufacturing processes and clinical protocols necessary for submission of an IND to the FDA are in the final stages of preparation. The Company anticipates IND submission in late 2013 or early 2014.

Dr. Robin L. Smith, Chairman and CEO of NeoStem, commented, “We are very excited about our progress towards the IND submission for what we expect to be the first human clinical study for our VSEL™ Technology and for the support of the NIH. We continue to pursue opportunities for non-dilutive financing of our programs, such as our recently awarded phase 1 NIH grant to investigate VSEL™ Technology for the treatment of scleroderma.”

Dr. Denis O. Rodgerson, Director of Grants and Academic Liaison for NeoStem, added, “We are pleased that we have met our interim milestones and NIH has agreed to award us funding for the second year of these studies on bone regeneration by using VSEL™ stem cells.”

Periodontitis is a severe form of periodontal disease, which is prevalent in the U.S. and affects up to 90% of the world population. The most severe cases of periodontal disease affect between 5% and 15% of the U.S. population, or between 15 and 47 million Americans. The incidence of new cases of periodontal disease is estimated to be between 1 and 3 million Americans annually, and growing at a 7% rate each year. Studies have shown that periodontal inflammation could have a role in the initiation or progression of coronary heart disease and stroke. Market research experts have estimated that severe periodontal disease represents a market between $1.25 and $1.5 billion annually.

This research is supported by the National Institute of Dental & Craniofacial Research of the National Institutes of Health under Award Number 5R44DE022493-03. 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 VSEL™ Technology

Human very small embryonic-like (VSEL) cells are a resident population of multipotent stem cells in the bone marrow involved in the turnover and regeneration of tissues. VSEL™ Technology offers the potential to go beyond the paracrine effect, yielding cells that actually differentiate into the target tissue and create true cellular regeneration. 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. In addition to periodontitis, NeoStem and its academic partners are exploring the potential for VSELs™ in osteoporosis and bone health improvement, bone regeneration, acute radiation syndrome, macular degeneration and glaucoma, chronic wound healing, and motor neuron repair. NeoStem has a worldwide exclusive license to the VSEL™ Technology from the University of Louisville.

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.

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Forward-Looking Statements for NeoStem, Inc.

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 development 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.