STEMCELLS, INC. RETAINS ACCOUNTING FIRM GRANT THORNTON AS NEW INDEPENDENT AUDITOR

Palo Alto, CA, December 9, 2003 -- StemCells, Inc. (NASDAQ: STEM) today announced that it has retained the accounting firm of Grant Thornton to act as its new independent auditor.

Founded in 1924, Grant Thornton International is a global accounting, tax and business advisory organization dedicated to serving mid-size companies. Grant Thornton has a network of 585 offices in 110 countries, including 50 offices in the United States, and is registered with the Public Company Accounting Oversight Board (PCAOB).

"We are pleased to retain Grant Thornton, and look forward to a successful and mutually beneficial relationship," said Martin McGlynn, President and CEO of StemCells. "Having served middle-market clients for more than 75 years, Grant Thornton's extensive experience in regulatory and compliance issues will bring increased efficiencies as StemCells continues to focus on building momentum for its growth."

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StemCells, Inc is a biotechnology company focused on the discovery, development and commercialization of stem cell-based therapies to treat diseases of, or injury to, the nervous system, liver, and pancreas. The Company's stem cell programs seek to repair or repopulate neural or other tissue that has been damaged or lost as a result of disease or injury. Further information about the Company is available on its web site, at www.stemcellsinc.com.

Statements in this press release other than statements of historical facts constitute forward-looking statements regarding, among other things, the future business operations of StemCells, Inc. ("the Company"). The forward-looking statements speak only as of the date of this news release. StemCells does not undertake to update any of these forward-looking statements to reflect events or circumstances that occur after the date hereof. Such statements reflect management's current views and are based on certain assumptions that may or may not ultimately prove valid. The Company's actual results may vary materially from those contemplated in the forward looking statements due to risks and uncertainties to which the Company is subject, including the risk that Company will not be successful in using the patented technologies to develop effective treatments for human diseases; uncertainties regarding the Company's ability to obtain the capital resources needed to conduct the research, preclinical development and clinical trials necessary for regulatory approvals; the fact that the Company's stem cell technology is at the pre-clinical state and has not yet led to the development of any proposed product; the uncertainty whether the Company's preclinical work will be replicable in another animal model and whether comparable results will be obtainable in humans; the uncertainty whether any products that may be generated in the future in the Company's stem cell programs will prove clinically effective and not cause tumors or other side effects; the uncertainty whether the Company will achieve revenues from product sales or become profitable; and others that are described in Exhibit 99 to the Company's Annual Report on Form 10-K entitled "Cautionary Factors Relevant to Forward Looking Statements."

Corporate Contact:

StemCells, Inc.
Martin McGlynn, President & CEO
650-475-3100, ext 108

BMC Communications Group (media)
Brad Miles
212-477-9007, ext. 17

Media / Investor Relations Contact:

The Investor Relations Group
Janet Vasquez / Jane Lin
212-825-3210