NeoStem CEO's Letter to Shareholders

NeoStem CEO's Letter to Shareholders

NEW YORK, July 9, 2012 /Globe Newswire/ --

Dear NeoStem Shareholders,

NeoStem (NYSE MKT: NBS) is rapidly emerging as a technology

and market leading company in the fast developing cell therapy market. Our multifaceted business strategy combines a state-of-the-art

contract development and manufacturing organization (CDMO) with a medically important cell therapy product development program

enabling immediate and long-term revenue growth opportunities. Our service business and pipeline of proprietary cell therapy products

work in concert, giving NeoStem a competitive advantage that is unique to the biotechnology and pharmaceutical industries. Supported

by an experienced scientific and business management team and a dynamic patent and patent pending (IP) portfolio, NeoStem is well

positioned to succeed.

We would like to take a moment to update you on the following

recent developments and important near term catalysts for the second half of 2012:

April 2012, Jonathan Sackner-Bernstein, MD, FACC joined the Company as Vice President of Clinical Development and Regulatory Affairs.

Jonathan brings to the Company over 20 years of experience as a clinical cardiologist and medical researcher with leadership in

healthcare management. Jonathan joined

the team to advance Amorcyte's PreSERVE AMI Phase 2 trial and to provide regulatory support for NeoStem's product pipeline. His

experience as Associate Center Director for Technology and Innovation at the U.S. Food and Drug Administration's Center for Devices

and Radiological Health and as CMO of Clinilabs where he established a Phase 1 research unit, coupled with his experience as a

cardiologist, make him a welcomed addition to the management team at NeoStem. Jonathan also served as assistant professor of medicine

at the Columbia University College of Physicians and Surgeons from 1993 to 2003. His academic accomplishments include contributions

to medical therapy of heart failure and patients following heart attack as well as leadership in changing the paradigms of drug

development in heart failure, giving him the academic credentials to effectively dialogue with physicians at the clinical trial

sites and get cardiologists excited about our new therapy.

We look forward to keeping you updated and encourage your questions

via the contact information below. Thank you for your continued support of NeoStem and our ongoing transformation.

NeoStem, Inc. ("we," "NeoStem"

or the "Company") continues to develop and build on its core capabilities in cell therapy to capitalize on the paradigm

shift that we see occurring in medicine. In particular, we anticipate that cell therapy will have a large role in the fight against

chronic disease and in lessening the economic burden that these diseases pose to modern society. Our January 2011 acquisition of

Progenitor Cell Therapy, LLC ("PCT") provides NeoStem with a foundation in both manufacturing and regulatory affairs

expertise. We believe this expertise, coupled with our existing research capabilities and collaborations, will allow us to achieve

our mission of becoming a premier cell therapy company. Our PCT subsidiary's manufacturing base is one of the few current Good

Manufacturing Practices ("cGMP") facilities available for contracting in the burgeoning cell therapy industry. Amorcyte,

LLC ("Amorcyte"), which we acquired in October 2011, is developing a cell therapy for the treatment of cardiovascular

disease. Amorcyte's lead compound, AMR-001, represents NeoStem's most clinically advanced therapeutic and Amorcyte is enrolling

patients for a Phase 2 trial to investigate AMR-001's efficacy in preserving heart function after a heart attack. We also expect

to begin a Phase 1 clinical trial by 2012/2013 to investigate AMR-001's utility in arresting the progression of congestive heart

failure and the associated comorbidities of that disease. Athelos Corporation, which is approximately 80%-owned by our subsidiary,

PCT, is engaged in collaboration with Becton-Dickinson that is exploring the earlier stage clinical development of a T-cell therapy

for autoimmune conditions. In addition, our pre-clinical assets include our VSELTM Technology platform as well as our

MSC (mesenchymal stem cells) product candidate for regenerative medicine.

For more information on NeoStem,

please visit www.neostem.com.

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

our ability to successfully consummate the sale of our interest in Erye, the Company's or its partners' successful development

of cell therapeutics, as well as the future of the cell therapeutics industry and the rate at which such industry may grow. 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 20, 2012 and in the Company's periodic filings with the Securities and Exchange Commission. The

Company's further development is highly dependent on future medical and research developments and market acceptance, which is outside