An Update from Dr. Robin Smith, Chairman and CEO

Greetings from NeoStem where we have recently filed our Company’s 2013 Annual Report on form 10-k, which can be found here, with the SEC and made it available to shareholders, providing a great opportunity to update our investors and the public on NeoStem’s business by looking back at 2013 and ahead to our outlook for 2014.

This year, NeoStem is significantly transforming its therapeutic product pipeline.  We have announced the expansion of our clinical development for both our CD34 Cell Program (focusing on ischemic repair) and our T Regulatory (Treg) Cell Program (focusing on immune modulation). We plan to advance these programs in clinical studies including chronic heart failure, type 1 diabetes and steroid resistant asthma. Of significance, later this year we will also be announcing data results for both our PreSERVE AMI Phase 2 clinical trial, and our collaborator, Dr. Jeffrey Bluestone’s Treg Phase 1 type 1 diabetes trial.

Additionally, PCT, our wholly owned contract manufacturing business, is continuing to advance the regenerative medicine industry by utilizing its newly formed Engineering & Innovation Center to help its clients prepare for successful commercial-scale manufacturing.  The Engineering & Innovation Center develops innovative solutions for PCT’s manufacturing clients by accelerating the use of automation, integration, closed processing and other strategies to address the important issues of scale up, cost of goods, quality control and robustness of the manufacturing process.

Taking a look back at 2013, NeoStem significantly advanced its leadership position in the cell therapy industry, with highlights including:

  • Positive Data Safety Monitoring Board outcomes for the 12 and 18 month data and safety reviews for our PreSERVE AMI Phase 2 clinical trial evaluating AMR-001 for the preservation of heart function after a severe heart attack;
  • Full enrollment of 160 patients in the Phase 2 PreSERVE AMI trial by December 2013;
  • Expansion of CD34 cell intellectual property coverage globally;
  • Establishment of relationship with University of California, San Francisco and Dr. Jeffrey Bluestone resulting in the license of three patent families, Phase 1 data and related IND  to advance the Treg Program in type 1 diabetes;
  • Completion of enrollment in Dr. Bluestone’s Phase 1 trial for type 1 diabetes trial using Treg cells;
  • Expansion of PCT clean rooms  to include a Class 1,000 suite compliant with EU production standards;
  • Continued growth in processing and storage services including additional transplant center client;
  • Receipt of National Institute of Allergy and Infectious Diseases (NIAID) and National Institutes of Health (NIH) financial support for VSEL™ Technology research;
  • Recruitment of additional seasoned management raising the Company’s profile in the industry and increasing its knowledge, skill base and competitiveness;
  • Listing on NASDAQ Capital Market;
  • During the 2013 calendar year, the market capitalization of the Company increased by 89%; and
  • Raised $62 million from equity financings.

I am pleased to present the following 2014 Outlook and Company milestones for the year ahead:

Therapeutic Product Pipeline   

  • Release of data from PreSERVE AMI Phase 2 trial in 2H 2014;
  • Initiate a Phase 2 chronic heart failure trial in our CD34 Cell Program;
  • Data from the Treg Phase 1 trial in type 1 diabetes presented at the American Diabetes Association Scientific Sessions in June 2014;
  • Advance Treg Program to initiate Phase 2 trial in type 1 diabetes;
  • Initiate proof-of-concept study to determine if Treg cells can be used to treat steroid resistant asthma; and
  • Advance VSELTM research through preclinical studies.

Contract Manufacturing Business

  • Drive further growth in revenues through product and service expansion transaction(s);
  • Advance initiatives in Engineering & Innovation Center to lower cost of goods and improve robustness and efficiency of the manufacturing process in anticipation of commercial production; and
  • Expand manufacturing capabilities internationally.

Strategic Transactions

  • Explore strategic acquisitions and business development transactions to increase shareholder value.

Thank you for your confidence in our company and for your continued support.  I, as well as other executive team members from NeoStem, look forward to updating you further as more exciting and significant developments occur.

Warm regards,

Robin L. Smith

Chairman and CEO

NeoStem, Inc.

 

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Dr. Robin L. Smith has served as Chairman and Chief Executive Officer of NeoStem since 2006.

Company Information

Company Website: http://www.neostem.com/
Company Headquarters

420 Lexington Avenue, Suite 350
New York, New York 10170
Phone: (212) 584-4180
Fax: (646) 514-7787

Media Contact

Eric Powers, Manager of Communications and Marketing
Phone: (212) 584-4173
epowers@neostem.com

Investor Relations Contact

LifeSci Advisors, LLC
Michael Rice, Founding Partner
Phone: (646) 597-6979
mrice@lifesciadvisors.com

Forward Looking Statements

This blog contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as well as historical information. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from anticipated results, performance or achievements expressed or implied by such forward-looking statements. When used in this blog, statements that are not statements of current or historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “plan,” “intend,” “may,” “will,” “expect,” “believe,” “could,” “anticipate,” “estimate,” or “continue” or similar expressions or other variations or comparable terminology are intended to identify such forward-looking statements, although some forward-looking statements are expressed differently. We remind readers that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors and involve known and unknown risks that could cause the actual results, performance, levels of activity or our achievements or industry results, to be materially different from any future results, performance levels of activity or our achievements or industry results expressed or implied by such forward-looking statements. Such forward looking statements appear in this blog. Factors that could cause our actual results to differ materially from anticipated results expressed or implied by forward-looking statements include, among others:

• our ability to obtain sufficient capital or strategic business arrangements to fund our operations and expansion plans, including meeting our financial obligations under various licensing and other strategic arrangements, the funding of our clinical trials for product candidates in our development programs for our Targeted Caner Immunotherapy Program, our Ischemic Repair Program and our Immune Modulation Program, and the commercialization of the relevant technology;
• our ability to build and maintain the management and human resources infrastructure necessary to support the growth of our business;
• our ability to integrate our acquired businesses successfully and grow such acquired businesses as anticipated, including expanding our PCT business internationally;
• whether a large global market is established for our cellular-based products and services and our ability to capture a meaningful share of this market;
• scientific and medical developments beyond our control;
• our ability to obtain and maintain, as applicable, appropriate governmental licenses, accreditations or certifications or comply with healthcare laws and regulations or any other adverse effect or limitations caused by government regulation of our business;
• whether any of our current or future patent applications result in issued patents, the scope of those patents and our ability to obtain and maintain other rights to technology required or desirable for the conduct of our business; our ability to commercialize products without infringing the claims of third party patents;
• whether any potential strategic or financial benefits of various licensing agreements will be realized;
• the results of our development activities, especially:
• the results of our planned Intus Phase 3 clinical trial of DC/TC being developed to treat metastatic melanoma;
• the results of our PreSERVE Phase 2 clinical trial of NBS10 (AMR-001) being developed to treat acute myocardial infarction for which we released initial data on November 17, 2014 and for which all 6 month data has been collected; however it is subject to ongoing analysis, and currently reported results, although promising, are preliminary and there can be no assurance that further analysis may not reveal negative, or less promising, results;
• our ability to complete our other planned clinical trials (or initiate other trials) in accordance with our estimated timelines due to delays associated with enrolling patients due to the novelty of the treatment, the size of the patient population and the need of patients to meet the inclusion criteria of the trial or otherwise;
• the other factors discussed in “Risk Factors” in our Form 10-K filed with the Securities and Exchange Commission (“the SEC”) on March 13, 2014, and elsewhere in the Annual Report on Form 10-K; and
• the Company’s acquisition of California Stem Cell, Inc. (“CSC Acquisition”) and the ongoing operations associated with this new business will subject the Company to additional risks. Our Current Report on Form 8-K filed on May 8, 2014 reporting the closing of the CSC Acquisition contains a discussion of the risk factors related to the CSC Acquisition and our new Targeted Immunotherapy Program.

The factors discussed herein, including those risks described in Item 1A. “Risk Factors” in the Company's Annual Report on Form 10-K filed with the SEC on March 13, 2014, the "Risk Factors" described in the Current Report on Form 8-K filed by the Company on May 8, 2014 and in the Company's other periodic filings with the Securities and Exchange Commission (the “SEC”) which are available for review at www.sec.gov under “Search for Company Filings” could cause actual results and developments to be materially different from those expressed or implied by such statements. All forward-looking statements attributable to us are expressly qualified in their entirety by these and other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by law, the Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

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