I think there are some parallels between stem cell companies and companies engaging in RNAi drug discovery. That is, the idea is great, but implementation still remains elusive. I wrote in September that I thought RNAi discovery company Alnylam Pharmaceuticals (NASDAQ:ALNY) was trading too high, and that the price was being buoyed by hype.
The Market, however, disagreed, and has pushed the stock up over 50% since then (I did recommend waiting until ALNY’s technicals degraded, which they haven’t, before shorting). I remain convinced I’ll be right on ALNY this year. In the meantime, buying into some stem cell hype is probably a smart move.
In my opinion, the best stem cell company right now is Osiris Therapeutics (NASDAQ:OSIR). They went public just last year, and the stock price has doubled since. They are looking at three different products in clinical trials, and have a product, Osteocel, on the market to aid in bone regeneration. As I mentioned, I think this is the best of the stem cell companies, but would not recommend buying until the price retraces a bit.
Other stem cell companies include Viacell (VIAC), StemCells (NASDAQ:STEM), and Aastrom (NASDAQ:ASTM). While none of these companies is going to be profitable any time soon, they are likely to trade higher based on hype.
Of the smaller stem cell stocks I think Aastrom has the best pipeline. They will soon announce results of a one year follow up on a Phase 1/2 clinical trial for bone regeneration, have an ongoing Phase 1/2 study underway for spinal fusion, and have completed a small trial in Spain for patients requiring bone regeneration prior to dental implantation.
So, I think OSIR is the best of the breed stem cell company, but am a bit concerned it’s trading too high. At less than $1.50 I think ASTM (which is looking to close the week off at 10%) is a good, highly speculative, stem cell play. This is certainly not a long term investment, and I would look to cash out when the stock takes an inevitable bump on hype in the next couple of months.
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ASTM vs. OSIR vs. ALNY vs. VIAC vs. STEM 1-yr chart