Playing Stem Cells
2782 views
Rate Now: 1 2 3 4

average rating: 2.50 / 2 ratings
Created by Jamie Fitch
DESCRIPTION:

Date updated:05-17-2007

Before we begin, allow me to give you a primer on stem cells and how we've gotten to the point we're at today.

Life begins as one cell (The egg) and quickly explodes into billions of cells - all differentiated for specific functions. Stem cells are the template cells that allow for the creation of a wide variety of cells that are necessary in the body. They become specific types of cells by being subjected to chemical enzymes. There are several types of stem cells. What you hear about are adult stem cells and embryonic stem cells. Adult stem cells can come from several locations including bone marrow, blood, and even the brain. However, these cells are usually pretty specialized. They can normally only used to create a few different types of cells within the body (termed pluripotent). Conversely, embryonic stem cells are still very generalized and can lead to the creation of nearly any type of cell (termed totipotent). Why this is the case and how adult stem cells even arise are still issues that are being researched. But the fact is with our current knowledge+technology embryonic stem cells offer the greatest hope for discovering cures since they are virtually limitless in their abilities.

Stem cells were discovered nearly 50 years ago. However, they were not able to be isolated applied to treating human diseases until 1998. Originally there was no federal money available for research in this field. In 2001 George Bush and his cabinet laid down the original laws for embryonic stem cell research. It allowed for federal funding on stem cell lines that were produced before the law but not on new ones. He considered this to be a compromise on the issue since he was ethically "against destroying life" but understood the medical promise of the cells.

Fast foward to now - academic research has been slow by modern standards due to the difficulty of obtaining funding for stem cell projects. Slow academic gains = slow private gains. The academic community must establish the basics before the private sector jumps in. Due to this, there have been little gains in treatments for currently uncurable diseases by the technology that was rumored to be the cure all a decade ago. So congress decided the current stem cell rules needed to be adjusted. They proposed that federal funding be made available to researchers working on new embryonic stem cell lines. These new lines are far more useful than original lines as technology has greatly improved in the past 6 years thanks to information gained. Congress contends that these new lines could greatly accelerate medical progress and treat increasingly distressing diseases such as parkinsons, alzheimers, and diabetes. The bill was easily passed but not by the 66% needed to overcome a presidential veto. GW Bush promptly vetoed the bill citing ethical concerns. He cited improved ability to harvest adult stem cells as well as the discovery of new sources of adult cells as reasons to avoid using embryonic cells. As you shall see when reading about these picks, there is some truth to this statement.

Still, the general belief is that Bush's concern over the destruction of life is short sighted since only donated embryos will be used for the creation of new lines. Thus, no life will be destroyed. This has put the issue at the forefront of debate and made it a strong topic for presidential candidates. Presumably the next president will side with Congress and the American People in general (numbers indicate ~75% approve the bill) and sign the bill into law. This will usher in the stem cell age. I will be looking at companies that are best positioned to make you money if/when this law is passed.

It should be noted that none of these companies are cash producing machines. At this point in time the costs of research are too high and the ability to get a stem cell treatment onto the market is too low to make profits. If you want "safer" picks I suggest looking at large companies like DNA/AMGN/GENZ, or the companies that these guys contract with to market their product.

One more note - I am suggesting that you buy any of these at this point in time. Simply be aware of them and consider them as the stem cell debate moves foward. I believe these companies will eventually be those that are affected the greatest.

symbol name last price % change open
  • +
  • STEM
    Stemcells
  • $1.09
  • -1.80%
  • $1.11

StemCells Inc.(STEM) has chosen to focus on using stem cells to battle central nervous system diseases (ie Alzheimers/Parkinsons). They currently have one product in clinical trials. This is in phase I for treating Batten disease. It is an extremely rare (2-4/100,000 births-->less than active 5,000 cases in the USA) genetic disease of the nervous system that is 100% fatal. Most of the people with the genetic flaw do not make it past their early 20s. Morally, it is good to see research being done on a devastating disease that affects relatively few people. However, this doesn't necessarily make for a good business model. A company needs something in a larger market to make some profit to keep it afloat while working on a treatment for a rare disease. At this point in time StemCells does not have that product. They are researching liver+pancreas stem cells which could ultimately treat a wide host of diseases relating to these organs. However, nothing is approaching clinical trial status which means financial fruition of this research is probably at least a decade away. As a result, StemCells has seen their losses widening over the past several years. In turn, this has dropped the price of the stock from nearly 7 dollars to 2-3. It looks nearly impossible for them to make a profit with their current pipeline. However, the numbers don't always tell the entire story. When the stem cell law is passed investors will immediately look for a way to play it. StemCell will obviously come up thanks to its name and symbol. Additionally, its research on liver/pancreas progenitor cells will produce enough scientific jargon to convince those not well versed in the field that there is great progress being made (and indeed there could be). They also have a great advantage in that they have been working exclusively with stem cells for 5+ years while many other companies will just be jumping into the field or shifting their focus onto it. I believe this will be sufficient enough to greatly push this stock up. It is difficult to project a price on a company with no earnings and really no product pipeline but a 3x increase is certainly sensible. Just make sure you're in the stock well before the next president is in office.

People owning STEM also tend to own: CELGGERNABBCOMSFMOFXITDF

TheStreet.com Rating: D What is this?

  • +
  • OSIR
    Osiris Therapeuti
  • $6.50
  • -0.31%
  • $6.55

Osiris Therapeutics is focusing on using mesenchymal stem cells (MSCs). these cells come from adult bone marrow. They are interesting in that they are not highly specialized and can be converted into a variety of connective tissues using specific enzymes (they are the adult stell cells most similar to embyronic stem cells). Osiris is currently looking to use MSCs to treat inflammatory diseases, heart disease, and to aid in spinal fusions. They already have one product in the market (Osteocel) for spinal fusions. This product helps create the spongy interior of bones and aids in fusion. It is the only stem cell treatment that is on the market (as of Dec 06). Additionally, they have three other products in phase I-III stage clinical trials. This bodes well for the company. While their financials have been ugly of late, at least this company has a treatment on the market. Additionally, research approaching advanced trials on diseases such as Crohn's disease could pay off in the somewhat near future. Finally, it has been able to harbor MSCs to create a wide variety of tissues, much like embryonic cells will be able to do. This makes me believe they will be able to adapt and use the new + presumably more potent cells quickly. They have shown the ability to get a stem cell product to the market, which is extremely challenging. Unlike STEM, this company will rely more on its products and less on its potential to convince investors to back them. They are probably the furthest along of all of companies I will be considering in stem cell therapy techniques.

People owning OSIR also tend to own: CHKCHTRIDTIGOMRIPFEPPHM

TheStreet.com Rating: E+ What is this?

  • +
  • GERN
    Geron Corporation
  • $5.46
  • -0.91%
  • $5.52

(will complete)

People owning GERN also tend to own: CELGSTEMACTC.OBALXNARIAASTMCRIS

TheStreet.com Rating: D What is this?

  • +
  • KOOL
    Thermogenesis Cor
  • $0.611
  • -0.65%
  • $0.619

(will complete)

People owning KOOL also tend to own: NWSSUNHACTC.OBALXNARIAASTM

TheStreet.com Rating: D What is this?

  • +
  • CYTX
    Cytori Therapeuti
  • $4.94
  • 0.00%
  • $5.12

(will complete)

People owning CYTX also tend to own: ABPATICMGICVAFRPTKYPHMER

TheStreet.com Rating: E+ What is this?

  • +
  • ASTM
    Aastrom Bioscienc
  • $0.29
  • -1.13%
  • $0.2908

(will complete)

People owning ASTM also tend to own: ACTC.OBALXNARIACELGCRISDNDNGERN

TheStreet.com Rating: D- What is this?

 

Start Price

Return Value

Start Date
STEM 2.58 -57.75% May 17th
OSIR 13.31 -51.16% May 17th
GERN 8.93 -38.86% May 17th
KOOL 2.96 -79.36% May 17th
CYTX 5.81 -14.97% May 17th
ASTM 1.4601 -80.14% May 17th

Average return:

 -53.71%

Success rate:

 0%

Tracking Started: 05-17-2007

06/30/2007 05:36 AM CDT Asked by Patrick19861
Awesome insight. I'd enjoy reading the rest of your thoughts as part of my research into this very exciting field.

show all comments

ADD YOUR COMMENTS:

latest articles | popular forums
Black Friday Short-Squeeze Oppor...

By Jonas Elmerraji Posted on Nov. 25, 2009 With Thanksgiving fast approaching, retailers have one thing on their collective minds: Black Friday. After all, the day, whi...

11.25.09 | 13:33 PM
Dividend Stocks for the Week

By Jonas Elmerraji Posted on Nov. 24, 2009 Don’t dismiss dividends right now. While stocks may have made significant strides in the rally that’s taken hold of the m...

11.24.09 | 11:36 AM
This Week's 'Barron's' Roundup

By Roberto Pedone Posted on Nov. 24, 2009 10 Terrific Dividend Stocks: This Barron’s article highlights 10 high-quality dividend-paying stocks for investors who’re ...

11.24.09 | 08:05 AM
Rocket Stocks for the Week

By Jonas Elmerraji Posted on Nov. 23, 2009 As well as broad-based indexes have performed in the last few months, Stockpickr's weekly Rocket Stocks list has managed to d...

11.23.09 | 10:34 AM
more articles
General market Technical Analysi...
11.14.07 | 22:55 PM From author ZA
The YouTube Exchange
07.22.09 | 17:45 PM From author Rawbrrt
huge rally in the making?
11.23.09 | 08:09 AM From author tradintrash
new margin requirements for leve...
11.25.09 | 21:01 PM From author graspthemarket
more forums
recent answers | popular answers
bubble(0)
today 's lists
Analyst Downgrades

Analyst Downgrades or Estimate Reductions for Nov. 25, 2009. Read more here. more

Biggest % Gainers

Here are some of the largest % gainers from Nov. 25, 2009. more

Analyst Upgrades

Analyst Upgrades or Estimate Increases for Nov. 25, 2009. Read more here. more

show all today's lists