Alzheimer’s disease (AD) treatment is constrained due to the inability of peripherally administered therapeutic molecules to cross the blood–brain barrier. Encapsulated cell biodelivery (ECB) devices, a tissue-targeted approach for local drug release, was previously optimized for human mature nerve growth factor (hmNGF) delivery in AD patients but was found to have reduced hmNGF release over time. To understand the reason behind reduced ECB efficacy, we exposed hmNGF-releasing cells (NGC0211) in vitro to human cerebrospinal fluid (CSF) obtained from Subjective Cognitive Impairment (SCI), Lewy Body Dementia (LBD), and AD patients. Subsequently, we exposed NGC0211 cells directly to AD-related factors like amyloid-β peptides (Aβ40/42) or activated astrocyte-conditioned medium (Aβ40/42/IL-1β/TNFα-treated) and evaluated biochemical stress markers, cell death indicators, cell proliferation marker (Ki67), and hmNGF release. We found that all patients’ CSF significantly reduced hmNGF release from NGC0211 cells in vitro. Aβ40/42, inflammatory molecules, and activated astrocytes significantly affected NGC0211 cell proliferation without altering hmNGF release or other parameters important for essential functions of the NGC0211 cells. Long-term constant cell proliferation within the ECB device is critically important to maintain a steady cell population needed for stable mNGF release. These data show hampered proliferation of NGC0211 cells, which may lead to a decline of the NGC0211 cell population in ECBs, thereby reducing hmNGF release. Our study highlights the need for future studies to strengthen ECB-mediated long-term drug delivery approaches.