SOURCE: NeoStem, Inc.

November 08, 2007 16:57 ET

NeoStem Issues Chairman's Summary of Recent Achievements Positioning Company for Revenue Growth in 2008

NEW YORK, NY--(Marketwire - November 8, 2007) - NeoStem, Inc. (AMEX: NBS), which is pioneering the pre-disease collection, processing and long-term storage of adult stem cells for future medical needs, today issued a Chairman's Summary of Recent Achievements that position the company for marked financial growth in the coming new year. As a leading-edge healthcare services company, NeoStem is seeking to capitalize on existing treatments and future breakthroughs in the burgeoning field of adult stem cell therapeutics, a market sector expected to reach $20 billion by 2010, according to Frost & Sullivan.

Addressing shareholders, Chairman and CEO Robin Smith, M.D., reviews:

--  the company's strengthened financial position,
--  the opening of 3 new stem cell collection centers and agreements for 2
    more,
--  alliances with 4 major medical service companies, and
--  the addition of bio-medical and business leaders to the Company's
    management team and Advisory Board.
    

Management believes these accomplishments position NeoStem as a strong first-mover in adult stem cell collection, processing and storage, to serve the emerging multi-billion-dollar industry of adult stem cell therapeutics.

Dear Shareholders:

NeoStem Inc. has had a remarkable year of achievement in which we have strengthened the Company's financial base and made great strides in building the infrastructure that will drive our financial growth beginning in the new year. In this letter, I want to succinctly summarize our specific accomplishments and briefly discuss the marketplace in which our proprietary technologies and services are now positioned to play a substantial role.

Our financial base is stronger.

In August, we created a stronger financial base for the Company as we

--  completed a 1-for-10 reverse stock split,
--  announced our new listing on the American Stock Exchange, and
--  completed a fully subscribed Public Offering of $6,350,000 million.
    

The proceeds from the offering and our position on a national stock exchange better enables us to carry out our scalable growth plan to build a nationwide network of collection centers in a relatively short time. We proudly rang the opening bell on the AMEX on the morning of October 23, 2007.

Three (3) new collection centers have opened.

Expanding our network of stem cell collection centers is a key to the Company's growth. Three NeoStem collection centers have opened in the past year -- in Encinitas, California; Bethlehem, Pennsylvania, and most recently Las Vegas. The Las Vegas facility, launched on October 23rd, offers an extremely high level of potential customer traffic (both U.S. and international travelers) drawn by an exciting destination center as well as by their desire to bank their own stem cells to protect their long-term health.

Collection centers generate important revenue for the company through upfront and ongoing fees charged to collection centers for marketing and support and for fees derived from stem cell collections and for processing the stem cells by NeoStem that will be stored for the donor's exclusive use in times of medical need. Long-term storage in our storage facilities generates further revenue on a recurring basis.

Prospective clients for each of these facilities include anyone concerned with their long-term health, well-being or risk of radiation exposure. People encountering age-related and congenital health issues gain a new form of "bio-insurance" by banking an accessible supply of healthy, genetically matched stem cells for use in time of serious illness.

Agreements have been signed for two (2) more collection centers.

More NeoStem collection centers are on the way. In October 2007, we announced an agreement with ProHEALTH Care Associates which includes opening an adult stem cell collection center in the New York Metropolitan area. ProHEALTH is one of the largest and most prominent multi-specialty practices in the affluent New York metropolitan area. It has gained added renown by becoming the official medical provider to major regional sports franchises and events, including the NY Jets, the NY Islanders and the US Open Tennis Championships. Operations will begin upon the receipt of licensure by the New York State Department of Health. We intend to work toward collaborations with other institutions of ProHEALTH's size and stature in other major metropolitan regions throughout the country, to further accelerate our growth and momentum.

Also in October, Stem Collect LLC agreed to open a Beverly Hills location as part of a multi-territory development agreement, described below. Under this agreement, Stem Collect purchased the right to open six (6) collection facilities, with an option to develop more territories. These facilities are envisioned as being located throughout California and to launch the market in Colorado.

Alliances with four (4) nationwide and regional bio-service companies have been established.

ProHEALTH and Stem Collect are but two of the national and regional companies that have formed alliances with NeoStem. Their outreach offers a highly valuable means for NeoStem to enter new markets and expand existing ones without assuming significant additional capital obligations.

1) Stem Collect LLC: We believe our multi-territory development agreement with Stem Collect offers an expanded growth model for the Company. Based on this model, a highly qualified company could receive exclusive permission to open several NeoStem-affiliated collection centers within a specified region. To maintain exclusivity in a region, a center will be required to generate a minimum number of adult stem cell collections, increasing our revenue and providing our shareholders an appropriate return.

2) New England Cryogenic Center Inc.: On October 11th, we announced a strategic alliance with the New England Cryogenic Center, Inc. (NECC), which will complement our West Coast storage facility, providing extensive new processing and storing capacity as NeoStem expands its services in the United States. NECC is one of the largest cryogenic laboratories in the country. We expect its services will support our growth on the East Coast as we expand our network of collection centers.

3) HemaCare Corporation: In early 2007, we announced a five-year agreement with HemaCare Corporation to provide NeoStem with outpatient collection services. HemaCare's high-quality cost-effective blood services are well known to hospitals and medical communities throughout California and on the East Coast. NeoStem expects this relationship to expand our collection infrastructure through HemaCare's mobile units and free-standing facilities. Under the agreement, HemaCare's main facility in Sherman Oaks, California, becomes an additional adult stem cell collection center for NeoStem.

4) CareCredit -- A different but highly important alliance was formed last May with CareCredit, a GE Money Company and the nation's leading patient financing program. The agreement allows NeoStem customers to choose to pay fees over a specified time period. The service will make our adult stem cell collection services available to a significantly larger client population.

Key additions strengthen our Management and Advisory Board.

Supporting this change and growth is our dedicated management team, advised by our growing Board of Advisors. We added substantial new talent to our company by hiring Renee Cohen as Vice President of Operations and Corporate Strategy and Arlene Graime to direct government affairs and raise nationwide consumer awareness.

Ms. Cohen previously worked for Pfizer in several senior positions directing venture management, product management, marketing strategy, as well as acquisitions and divestitures. She is focused on developing the infrastructure to grow NeoStem's nationwide collection network and identifying new business opportunities within the pharmaceutical sector.

Ms. Graime has had an accomplished and multifaceted career in corporate marketing, special event planning and working with the House of Representatives and two White House administrations. She is spearheading an initiative aimed at key federal and state agencies and Congressional committees to raise awareness of adult stem cell therapy as a treatment option, particularly for first responders.

Our advisory board benefits from the presence of emergency management and security expert Bradford E. Billet, security advisor and commentator Dr. Neil C. Livingstone, and the distinguished UCLA pathologist Dr. Richard Gatti, among others.

Awareness is growing about NeoStem's unique services in the medical and financial communities.

As Chairman and CEO, I have been speaking before groups of decision-makers in the medical and financial communities around the country to increase awareness of NeoStem's services. On November 5, 2007, I presented at Rodman and Renshaw's 9th Annual Healthcare Conference in New York City, always a dynamic setting of leading investment institutions and individuals. In October, our team spoke to the Nevada Biotechnology and Bioscience Consortium to educate the region's medical and scientific community about the benefits of adult autologous stem cell collection and storage. In September, I led a science and business panel discussion at the Stem Cell Summit in Boston. These are only a few of the audiences addressed throughout the year, and recognition of our company is clearly growing.

In addition, NeoStem has launched the "Stem for Life" Foundation to heighten public awareness of how adult stem cells are being used to treat serious medical conditions in the burgeoning regenerative medicine industry. The Foundation plans to lead a high-profile campaign directed at protecting the nation's first responders by assisting them in having their stem cells collected and stored for potential needs following national emergencies and war-related injuries. In addition, we want to make stem cell collection widely available to chronically ill patients who need the service but can't afford to pay for it.

We address a market projected to reach $20 billion worldwide by 2010.

According to Frost & Sullivan, one of the world's premier medical research firms, the global market for stem cell therapy is expected to be $20 billion by 2010. This is roughly the equivalent of 20 "blockbuster" drugs. The National Institutes of Health list more than 750 clinical trials under way relating to adult stem cells and over 240 relating to autologous use. Groundbreaking work is being done in the hope of benefiting those afflicted with some of today's most devastating diseases.

Numerous national magazines this year have discussed this bold new shift in the medical industry where adult stem cells are providing therapeutic treatments for a multitude of serious diseases.

As business columnist Gene Marcial wrote in a recent issue of BusinessWeek, "The idea of using adults' own stem cells to treat diseases such as leukemia, is drawing investors' attention." He went on to state: "They're looking at NeoStem (NBS), a tiny outfit that specializes in collecting, processing and storing stem cells from healthy adults for the personal medical use." That kind of recognition is priceless and we are proud to have earned it.

When you review all these accomplishments of the past few months, we believe you'll agree that NeoStem is poised for substantial growth in the coming year, and we foresee our shareholders experiencing the benefits.

We welcome any questions or concerns that you, our shareholders, might have concerning our plans for growth and our partnership with you. Please feel free to contact us at any time at info@neostem.com and visit our Web site at www.neostem.com.

Sincerely,

Robin L. Smith, MD
Chairman and CEO
NeoStem Inc.

About NeoStem, Inc.

NeoStem is a biotechnology services company enhancing the delivery of adult stem cell therapeutics to health-conscious consumers. The Company is developing a nationwide network of adult stem cell collection centers, enabling people to donate and store their own stem cells with NeoStem for personal use years or decades later in times of critical medical need. Although adult stem cell therapies are generally not standard of care, the Company believes medicine is on the threshold of a plethora of such new therapies.

The proprietary NeoStem technologies empower health-conscious consumers to help protect their future health by undergoing treatment with their own stem cells -- providing an accessible supply of healthy, genetically matched stem cells for use in the eventuality of illness.

Currently underway are hundreds of stem cell-based research programs and clinical trials investigating the use of these non-controversial adult stem cells, such as those collected from donors under NeoStem's methods. As the nation's population ages and encounters serious age-related and congenital health issues, NeoStem has positioned itself as a leader in the national trend toward protecting one's future health.

The Company's platform business plan is a service model that is completely scalable, thus minimizing risk levels ordinarily related to most long-term biopharmaceutical research and development. Under its strategic business plan, NeoStem has begun opening a nationwide network of adult stem cell collection facilities. Its stem cell collection systems will be located in physician offices and medical facilities, where the procedures and care can be administered by trusted personal doctors and medical professionals.

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

For other information and resources about the Company, visit www.CFSG1.com or www.trilogy-capital.com/tcp/neostem/quote.html.

Forward-Looking Statements

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements concerning the ability of NeoStem, Inc. ("the Company") to develop the adult stem cell business, the future of regenerative medicine and the role of adult stem cells in that future, the future use of adult stem cells as a treatment option and the potential revenue growth of the Company's business. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The Company's ability to enter the adult stem cell arena, its success in such arena and future operating results are dependent upon many factors, including but not limited to (i) the Company's ability to obtain sufficient capital or a strategic business arrangement to fund its expansion plans; (ii) the Company's ability to build the management and human resources and infrastructure necessary to support the growth of its business; (iii) competitive factors and developments beyond the Company's control; (iv) scientific and medical developments beyond the Company's control; (v) the Company's inability to obtain appropriate state licenses or any other adverse effect or limitations caused by government regulation of the business; (vi) whether any of the Company's current or future patent applications result in issued patents; and (vii) other risk factors discussed in the Company's periodic filings with the Securities and Exchange Commission which are available for review at www.sec.gov under "Search for Company Filings."

Pursuant to an October 1, 2006 agreement, as amended, Consulting For Strategic Growth 1, Ltd. ("CFSG1") provides the Company with consulting, business advisory, investor relations, public relations and corporate development services, for which CFSG1 receives a cash fee for the duration of the agreement and received shares of NeoStem's common stock and warrants. Independent of CFSG1's receipt of cash or other compensation from the Company, CFSG1 may choose to purchase the common stock of the Company and thereafter sell those shares at any time it seems appropriate to do so, subject to applicable laws and regulations. For more information, please visit www.cfsg1.com.

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