8-K

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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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                                    FORM 8-K

                                 CURRENT REPORT
                                   Pursuant to
                             Section 13 or 15(d) of
                       THE SECURITIES EXCHANGE ACT OF 1934



          Date of Report (Date of Earliest Event Reported): May 8, 2001

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                                 STEMCELLS, INC.
             (Exact name of registrant as specified in its charter)

        DELAWARE                       0-19871                  94-3078125
(State or other jurisdiction   (Commission File Number)     (I.R.S. Employer
      of incorporation)                                   Identification Number)

                                2155 PORTER DRIVE
                           PALO ALTO, CALIFORNIA 94304
          (Address, of principal executive offices, including zip code)

                                 (650) 475-3100
               (Registrant's Telephone number including area code)


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Item 5.  OTHER EVENTS

       On April 30, 2001, StemCells, Inc. issued a press release announcing that
it had sold all of its remaining founder's shares in Swiss Modex Therapeutics,
Ltd. (SWX New Market: MDXN) in a private placement. StemCells, Inc. sold 103,577
shares at a net price of 87.30 CHF (Swiss francs) per share, or a total sum of
approximately US $5,200,000. A copy of this press release is attached to this
Current Report on Form 8-K as Exhibit 99.1.












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                                   SIGNATURES

       Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                        STEMCELLS, INC.


                                        By /s/ George Koshy
                                           -------------------------------------
                                           George Koshy
                                           Controller and Acting Chief
                                           Financial Officer


Date: May 7, 2001






                                  EXHIBIT INDEX

99.1     Press Release dated April 30, 2001

EX-99.1

                                                                    Exhibit 99.1

     STEMCELLS, INC. PLACES ALL REMAINING MODEX THERAPEUTICS FOUNDER'S STOCK
                        SHARES SOLD IN PRIVATE PLACEMENT

Palo Alto, Calif. -- April 30, 2001 --StemCells, Inc. (Nasdaq: STEM) announced
today that it has sold all of its remaining founder's shares in the Swiss Modex
Therapeutics, Ltd. (SWX New Market: MDXN) in a private placement. StemCells,
Inc. sold 103,577 shares at a net price of 87.00 CHF (Swiss francs) per share,
or a total sum of approximately US $5,200,000.

StemCells, Inc. was one of the original founders of Modex Therapeutics and the
original developer of its encapsulated cell technology (ECT). Rights to the ECT
technology were sold to the French company Neurotech, SA in exchange for an
immediate payment plus future royalty payments. In exchange for Modex'
assistance in placing the shares, which have been acquired by European
institutional investors, plus a payment of US $300,000 from Modex Therapeutics
to StemCells, Inc., the rights to these future royalty payments have been
transferred to Modex Therapeutics. StemCells retains its licenses to use the ECT
in its current programs and for the development of future vaccine technologies.

       "The liquidation of the Modex shares at this time by StemCells allows our
company to build value in our technology in a non-dilutive way. This is
particularly important in very difficult U.S. equity markets," said Martin
McGlynn, President and CEO of StemCells, Inc. "After StemCells Inc. restructured
and focused on its core business of stem cell technology, it became advantageous
to the Company to divest itself of its ECT assets."

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 central nervous system, liver, and pancreas. The Company's stem cell
programs seek to repair or repopulate tissue that has been damaged or lost as a
result of disease or injury.

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., or of StemCells California, Inc., its
wholly-owned subsidiary (collectively, "the Company"). 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 conduct the research, preclinical development and clinical
trials required to develop products and obtain regulatory approvals; the fact
that the Company's stem cell technology is at the preclinical stage and has not
yet led to the development of any proposed product; the risk that any products
that may be generated in the future in the Company's stem cell programs may not
prove clinically safe or effective or may cause tumors or other adverse side
effects; the uncertainty whether the Company will achieve revenues from product
sales or become profitable; and other risks and uncertainties described in
Exhibit 99 to the Company's Annual Report on Form 10-K entitled "Cautionary
Factors Relevant to Forward Looking Statements."