Erye's new facility passes SFDA inspection for manufacture of penicillin, cephalosporin powder

NeoStem, Inc. ("NeoStem" or the "Company") (NYSE Amex: NBS), an international biopharmaceutical company with operations in the U.S. and China, announced on June 15, 2010 that its 51% owned Suzhou Erye pharmaceutical subsidiary ("Erye") passed the government inspection by the State Food and Drug Administration ("SFDA") in China to manufacture penicillin and cephalosporin powder for injection at its new manufacturing facility. These two cGMP lines were responsible for $45,000,000 of Erye's sales in 2009. The new facility now has received government certification and is fully operational and manufacturing products on these two production lines.

The new facility will provide an increase in production capacity of more than 50% over the old facility. Coupled with the approval of the lines earlier in 2010, Erye has relocated over 90% of its 2009 sales to the new facility, placing the process significantly ahead of the original 2011 goal.

NeoStem's Chairman and CEO, Robin Smith, commented, "Erye's relocation of these two additional production lines to the new facility will increase capacity in the near term by more than 50%, bringing Erye another step closer to its goal of becoming one of the largest antibiotic producers in Eastern China."