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NeoStem Closes Divestiture of Its Ownership Interest in Suzhou Erye

Adds $12.3 Million in Non-Dilutive Cash to and Removes Over $30 Million of Debt From its Balance Sheet

New York 13, 2012 — NeoStem, Inc. (NYSE MKT:NBS) (“NeoStem” or the “Company”), an emerging market leader in the fast growing cell therapy industry, today announced that the Company has completed the divestiture of its 51% ownership interest in Suzhou Erye Pharmaceutical Co. Ltd. (“Erye”), a China-based generic pharmaceutical company. The divestiture provides NeoStem with $12,280,000 in cash and removes from the Company’s balance sheet over $30 million in short and long-term debt obligations.  Erye also returns 1,040,000 shares representing approximately 0.7% of the Company’s outstanding common stock, 1,170,000 stock options representing approximately 5.1% of the Company’s outstanding options and 640,000 warrants to purchase common stock held by Erye representing approximately 1.1% of the Company’s outstanding warrants.

“We are very pleased to have reached this significant milestone in our business,” said Dr. Robin Smith, Chairman and CEO of NeoStem. “The Erye divestiture brings non-dilutive capital that bolsters our cash position in the United States, reduces legal and financial reporting expenditures, simplifies our financial statements and focuses our efforts exclusively on the rapidly growing cell therapy industry. The divestiture also paves the way for the Company to qualify for new funding through the National Institutes of Health (NIH) Small Business Innovation Research (SBIR) program which would support our pre-clinical development of VSELTM Technology. NeoStem will also be able to invest more resources into its cell therapy development and contract manufacturing activities.”

About NeoStem, Inc.

NeoStem, Inc. continues to develop and build on its core capabilities in cell therapy, capitalizing on the paradigm shift that we see occurring in medicine. In particular, we anticipate that cell therapy will have a significant role in the fight against chronic disease and in lessening the economic burden that these diseases pose to modern society. We are emerging as a technology and market leading company in this fast developing cell therapy industry. Our multi-faceted business strategy combines a state-of-the-art contract development and manufacturing subsidiary, Progenitor Cell Therapy, LLC (“PCT”), with a medically important cell therapy product development program, enabling near and long-term revenue growth opportunities. We believe this expertise and existing research capabilities and collaborations will enable us to achieve our mission of becoming a premier cell therapy company.

Our contract development and manufacturing service business supports the development of proprietary cell therapy products.

NeoStem’s most clinically advanced therapeutic product candidate, AMR-001, is being developed at Amorcyte, LLC (“Amorcyte”), which we acquired in October 2011. Amorcyte is developing a cell therapy for the treatment of cardiovascular disease and is enrolling patients in a Phase 2 trial to investigate AMR-001’s efficacy in preserving heart function after a heart attack. Athelos Corporation (“Athelos”), which is approximately 80%-owned by our subsidiary, PCT, is collaborating with Becton-Dickinson in the early clinical exploration of a T-cell therapy for autoimmune conditions. In addition, pre-clinical assets include our VSEL TM Technology platform as well as our mesenchymal stem cell product candidate for regenerative medicine. Our service business and pipeline of proprietary cell therapy products work in concert, giving us a competitive advantage that we believe is unique to the biotechnology and pharmaceutical industries. Supported by an experienced scientific and business management team and a substantial intellectual property estate, we believe we are well positioned to succeed.

NeoStem - Cell Therapy Development - Media Section