Expecting Post-Stimulus Catalyst for Stem Cell Research Companies

by: Mike Havrilla

The accompanying table (click to enlarge) includes 26 companies in the ETF Innovators Emerging Stem Cell Index, which lost 7% of its market value in the past week (at 1,148 today) and posted a 15.2% loss over the past year on an equal-weight basis.

Results for benchmark indexes and ETFs include gains of 1.5% for the Cosmetic and Restorative Medicine Index and losses of 1.2% for SPDR S&P Biotech (NYSEARCA:XBI), 18.7% for Healthcare Sector SPDR (NYSEARCA:XLV), 7.2% for iShares Nasdaq Biotech (NASDAQ:IBB), and 17.7% for PowerShares Biotech & Genome (NYSEARCA:PBE).

The next catalyst expected for stem cell and regenerative medicine companies is federal funding for stem cell research, which has been blocked by the previous administration for the past eight years. Look for an announcement soon to provide an upside catalyst for these companies now that the economic stimulus plan is expected to be finalized by Tuesday.

The decline in stem cell stocks over the past week was led by Geron (NASDAQ:GERN), which declined by nearly 20% on Friday after the Company sold over 7M shares in a financing deal that will close on 2/19/09. Below is a summary and website links for the 26 companies included in the ETF Innovators Emerging Stem Cell Index, which are now featured at here.

StemCells (STEM) engages in clinical and preclinical research and development for human neural stem cells and liver engrafting cells. Earlier stage preclinical work is focused on spinal cord injuries, myelin, and retinal disorders.

BioMimetic Therapeutics (NASDAQ:BMTI) develops regenerative medicine device/therapeutic combination products for bio-therapeutic applications for orthopedic/spine, sports medicine, and dental procedures.

RTI Biologics (NASDAQ:RTIX) is a provider of bio-implants and grafts to promote healing and repair for orthopedic/spinal applications, sports medicine, bone graft substitutes, and cardiovascular applications.

Cytori Therapeutics (NASDAQ:CYTX) is a commercial-stage regenerative medicine company which is developing the Celution System to process a patient's own fat (adipose) tissue in about one hour for a variety of reconstructive and cosmetic medicine therapeutic applications.

CYTX also offers StemSource Cell Banking for a patient to preserve their own adipose-derived stem + regenerative cells (ADRCs) for use in the future as ongoing clinical trials establish the safety and effectiveness for cardiovascular disease, breast reconstruction/augmentation, liver disease, kidney failure, orthopedic/spinal disc regeneration, and gastrointestinal disorders.

CYTX currently offers its products and services in Japan and Europe along with two key strategic partners – Olympus Corp. (OTCPK:OCPNY) (a strategic investor + medical device partner for Celution System) and Green Hospital Supply (OTC:GHSPF) (a strategic investor + partner for StemSource Cell Banking, initially targeting hospitals in Japan).

Aastrom Biosciences (ASTM) is developing autologous (derived from the patient) cell products for the repair and regeneration of human tissue. Aastrom's Tissue Repair Cell (NYSE:TRC) technology utilizes a patient's own bone marrow as the source of progenitor and stem cells for use in cardiac and vascular tissue regeneration.

Mesoblast (MBLTY.PK) (Australia: MSB.AX) is an adult stem cell company focused on commercializing RepliCart for bone and cartilage repair and regeneration, with recent approval to conduct a Phase 2 clinical trial for knee osteoarthritis. Mesoblast also has a U.S. subsidiary focused on cardiovascular applications for its regenerative medicine technology.

BioTime (BTIM.OB) offers blood plasma expanders such as Hextend along with its Embryome Sciences subsidiary, which includes 11 new cell lines that will be marketed to universities and bio-pharma companies for use in research programs focused on developing new cell-based therapies for neurodegenerative disease, muscular dystrophy, heart disease, cancer, and arthritis, as well as other potential applications in the emerging field of regenerative medicine.

Osteotech (OSTE) provides OsteoBiologic solutions for regenerative medicine applications to repair and replace bone loss caused by trauma or disease, augment prosthetic implant procedures, facilitate spinal fusion, and replace/repair damaged ligaments and tendons.

Neuralstem (NYSEMKT:CUR) manufactures human neural stem cells for research grant and collaborative programs and outsources the manufacturing and storage of its stem cells for use in pre-clinical studies to Charles River Labs (NYSE:CRL).

RegeneRx Biopharma (RGN) has developed three drug product candidates based on a peptide molecule (Thymosin beta 4), which demonstrates promise for a variety of tissue and organ repair applications. RGN-137 is a topical gel product for healing chronic dermal wounds. RGN-259 is an eye drop for ophthalmic injuries. RGN-352 is an injectable treatment for heart attacks.

ThermoGenesis (NASDAQ:KOOL) is a commercial-stage provider of systems for the storage and processing of adult stem cells derived from cord blood and bone marrow. KOOL offers the AutoXpress Platform (NYSE:AXP) (cord blood processing) as a family of automated devices which includes the MarrowXpress (bone marrow processing) and related disposables as a closed system to process and collect adult stem cells.

The CryoSeal FS System produces fibrin sealants from blood in about one hour for use in liver resection surgeries. KOOL also expects to enter the veterinary stem cell market under the Vantus brand and plans to launch Res-Q (a system for real-time processing of bone marrow and platelet rich plasma processing) during its fiscal 4Q09 as the Company hopes to achieve profitability during 2010.

Athersys (NASDAQ:ATHX) collaborates with Angiotech Pharma (ANPI) to develop MultiStem for the treatment of damage caused by heart attacks, peripheral vascular disease, and strokes in addition to support for stem cell transplants.

Advanced Cell Technology (ACTC.PK) focuses on human embryonic and adult stem cell technology, with FDA approval to begin Phase 2 clinical trials for adult stem cell technologies, which are focused on cardiovascular disease and transplants.

International Stem Cell Corp (OTCQB:ISCO) offers a unique technology technology, Parthenogenesis, which results in the creation of pluripotent (ability to differentiate into a variety of unique cell types) human stem cell lines from unfertilized human eggs. ISCO's technology has the potential to eliminate the rejection of stem cell transplants, avoid ethical issues by eliminating the need for fertilized embryos, and produce specialized cells for research applications.

Bioheart (OTCPK:BHRT) recently secured private financing commitments for up to $7M and recently announced a grant-funded study in Italy for the Bioheart A&C Bio Science Twin-Pulsatile Life Support System which is expected to be completed within just 45 days with the potential for $2.1M in contract sales if results are positive.

BHRT develops devices and biological therapeutics for the diagnosis, treatment, and monitoring of cardiovascular disease and heart failure. MyoCell is the Company's lead product candidate, which represents a muscle-derived stem cell therapy designed to improve heart function by replacing scar tissue with living cells to restore function.

Pluristem Therapeutics (NASDAQ:PSTI) has developed a pipeline of product candidates derived from the human placenta and processed by the Company's PluriX bio-reactor as allogeneic (ready-to-use, non-personalized cell therapy products). The Company's pipeline includes product candidates for the treatement of peripheral artery disease (PLX-PAD), inflammatory bowel disease (PLX-IBD), multiple sclerosis (PLX-MS), bone marrow transplants (PLX-BMT), and ischemic stroke (PLX-STROKE).

HepaLife Technologies (OTC:HPLF) cell-based technologies under development include an artificial liver device (HepaMate), in-vitro toxicology and pre-clinical drug testing platforms, and cell-culture based vaccine production methods for the manufacture of vaccines against H5N1 avian influenza and other viruses.

Stem Cell Innovations (PINK:SCLL.PK) is a develop-stage company focused on its C3A human liver cell line for the production of human serum proteins, including the clotting factors, Factor VIII and Factor IX, used by hemophiliacs to allow their blood to clot.

Isolagen (ILE) develops products for skin and tissue rejuvenation which are designed to improve the appearance of skin injured by the effects of aging, sun exposure, acne, and burn scars using a patient’s own (autologous) fibroblast cells produced by its Isolagen Process for therapeutic and cosmetic medicine applications.

CellCyte Genetics (OTCPK:CCYG) is a development-stage company focused on cell expansion and cell maintenance through the use of its patented bioreactor technology. The Company’s therapeutic focus is on investigative collaborations to research and develop compounds to allow the safe and efficient non-invasive delivery of stem cells through the patient’s own circulatory system to a diseased or damaged organ.

Cryo-Cell (OTCPK:CCEL) offers cellular processing and cryogenic storage, with a focus on the collection and preservation of umbilical cord blood stem cells as a family cord blood stem cell bank and preserves the specimens in commercially available cryogenic storage equipment.

Brainstorm Cell Therapeutics (NASDAQ:BCLI) is a development-stage company focused on focused on using a patient’s own bone marrow stem cells to generate neuron-like cells that provide treatment for Parkinson’s Disease (PD), Amyotrophic Lateral Sclerosis (ALS) and spinal cord injuries.

Opexa Therapeutics (NASDAQ:OPXA) develops autologous (patient-derived) cell-based therapies to treat multiple sclerosis (NYSE:MS), rheumatoid arthritis (NYSE:RA), and diabetes based on the Company’s T-cell and adult stem cell technologies. Opexa's lead product candidate is Tovaxin (a T-cell based therapeutic vaccine) for MS which is in a Phase 2b clinical trial.

Neostem (NBS) operates a commercial, autologous (patient-derived) adult stem cell bank for the pre-disease collection, processing and long-term storage of stem cells from adult donors that they can access for their own future medical treatment. The Company manages a network of adult stem cell collection centers throughout the U.S. and conducts research to identify and isolate rare stem cells from bone marrow.

Bio-Matrix Scientific Group (OTCPK:BMSN) is a provider of disposable instruments and medical devices which are used in stem cell extraction and tissue transfer procedures and also operates cryogenic stem cell banking facilities.

Cord Blood America (OTCPK:CBAI) preserves umbilical cord blood stem cells through a quick and non-invasive procedure at the time of birth. CBAI is focused on marketing initiatives to increase awareness of their services, which literally represent a once in a lifetime opportunity to collect and preserve cord blood stem cells which can be used in the future to treat dozens of conditions with the promise of even more medical breakthroughs with the FDA ruling to allow human stem cell testing and pending federal funding for stem cell research.