Exhibit 99.2

[STEM CELLS INC LOGO]

StemCells, Inc. (Ticker: STEM, Exchange: NASDAQ)
News Release--December 10, 2003

                 STEMCELLS RAISES $9.5 MILLION IN NEW FINANCING

Palo Alto, Calif., December 10, 2003 -- StemCells, Inc. (NASDAQ: STEM) announced
today that it has completed a $9.5 million financing transaction with an
institutional investor through the sale of 5 million shares of common stock at a
price of $1.90 per share.

StemCells intends to use the proceeds of the sale of the common stock primarily
for general corporate purposes including current and future preclinical trials
of its lead product candidate, a proprietary human neural central nervous system
stem cell (hCNS-SC) for the treatment of diseases of, or injuries to, the brain
and spinal cord. The Company has previously announced that it intends to file
its first IND with the FDA to begin clinical trials in Batten Disease, a rare
but fatal neurodegenerative disorder.

About StemCells, Inc.

StemCells, Inc., is a biotechnology company focused on the discovery,
development and commercialization of stem cell-based therapies to treat diseases
of 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 www.stemcellsinc.com.

Apart from statements of historical facts, the text of this press release
constitutes 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 uncertainties regarding
the Company's ability to obtain the capital resources needed to continue its
current research and development operations and to conduct the research,
preclinical development and clinical trials necessary for regulatory approvals;
the uncertainty whether results comparable to the Company's preclinical work
will be obtainable in humans; the fact that the Company's stem cell technology
is at the pre-clinical stage and has not yet led to the development of any
proposed product; the uncertainty whether the Company will achieve revenues from
product sales or become profitable; uncertainties regarding the Company's
obligations in regard to its former encapsulated cell therapy facilities in
Rhode Island; and other factors 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:                           Media / Investor Relations Contact:
StemCells, Inc.                              The Investor Relations Group
Martin McGlynn, President & CEO              Janet Vasquez / Jane Lin
650-475-3100, ext 108                        212-825-3210

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