Stem Cell Technology To Revolutionize The Skin Care Industry?

by: Equitable Research

The business of eternal youth and longevity

In the field of skin care, finding the perfect anti-aging solution has been one of the most common pursuits. Over the past few years, stem cell technology through extensive research and development has provided what is perhaps (debatably) the most innovative new skin care ingredient we have seen emerge. Many products in the market today include stem cells, but to the common user or everyday consumer the technology behind the final product can often be confusing. But buyers are sane enough to not use something that they do not understand. This is why, it is very important that as stem cell research progresses, that people should also be made aware of how these cells help them through the skin care products they are used in.

Even the skin care experts, spa clinic staff and beauty salon people need to be educated on the science properly so as they are able to allay any doubts their patients, clients or customers might have. Granted, it is not easy to decipher the science behind this emerging technology, but much confusion can be cleared up with a basic knowledge and understanding. At the crux of it, people want to believe that these new methods can actually counter the effects of stress, poor lifestyles choices and free-radical damage.

So what are stem cells?

Stem cells can be found in all multicellular organisms. Amongst other biological cells, they are unique in the sense that they can morph into any other type of cell in the body. Ideally, stem cells do not have any particular function but when the body needs a multitude of cells to perform a particular function, the stem cells answer the call of duty. Old age causes depletion of stem cells in the body, which often happens faster in case there is any lack of nutrition or environmental factors.

How does stem cell technology help in skin care?

Often, one hears of spas using advanced medical science methods to help in skin care treatments while at other times there are some spas that have never even tried using such methods. That is the difference between traditional and medical spas. In the former, ointments and lotions are used on the surface of the skin. Any kind of stem cell based product applied on the bare surface would be a waste here as this method does not allow the stem cells to come in contact with the blood vessels, in the absence of which the cells would just die. Stem cells require a constant nutrition which can only happen through blood vessels. This means that applying cell based ointments on wounds or burns can potentially lead to full recovery of the surface.

Where do the stem cells come from?

As of now, there are predominantly two ways of using stem cells for any procedure you might undertake. The first method involves extraction some cells from your adipose tissue (fat) using a minor liposuction procedure. The cell is then kept in a growing culture where stem cells are produced. This process ensures a unique quota of stem cells for every person who approaches this method. The second option is to use plant stem cells as the human and plant variations are very similar to each other on such levels. Botanical stem cells can be made to mimic the behavior of human stem cells as long as they are able to secrete an enzyme that is very similar to the one used by human cells to help in cell growth in case of damage. For example, stem cell extracts from a rare Swiss apple are used in number of skin care products as these cells help in tissue regeneration to a great extent.

Is there a demand for stem cell technology in skin care products?

As part of my ongoing research into the emergence of new technologies in the cosmetics business, I recently took the opportunity to talk to Timothy Schmidt, President and CEO of SkinPro -- a technology driven skin care laboratory in Florida. I asked him about his thoughts on the growing demand of stem cells in cosmetic products and he replied that "Our company is currently exploring several new strategic initiatives with regards to this particular technology, namely the use of cell protecting and regenerating messengers that attach to skin cells whereby signaling them to begin the reparative process. We have been formulating and manufacturing skin care products with the Uttwiler Spatlaube apple stem cell since 2010, but we believe that this is just the tip of the iceberg when it comes to integrating stem cells with skin care. Clearly this technology is in its infancy and as always we will be at the forefront of any non-invasive approach to helping people look and feel younger."

I thought that this last line from Schmidt summed up the entire skin care technology debate quite nicely. If something helps people look younger (as clearly stem cells do), then everybody in the business will want a piece of the pie. While SkinPro is using the stem cells from the Uttwiler Spatalaube apple, Estee Lauder (NYSE:EL), recently introduced the new Re-Nutriv which includes white tuberose stem cells. Furthermore, ZO Skin Health, Inc. utilizes various plant stem cells in their ZO Medical Products series. While the technology is far from being widely adopted in skin care (or in medical practice for that matter), the applicational interest is growing significantly.

Is it safe to invest in stem cell research or in a skin care brand that uses stem cell research?

Knowing how the medical research industry is very unpredictable and inherently risky, it would be naive to not think twice before investing any capital to purchase shares in companies that conduct stem cell research. For example, the bio-pharmaceutical company Geron (GERN), which had been running stem cell therapy trials up until November of last year, realized that the work was not producing the desired results. That is when they started calling themselves a company dealing in cancer therapeutics. Such a drastic change can often result in a drop in points in the stock market. However, the futuristic potential of this field is virtually limitless, somewhat akin to nanotechnology.

However, things are looking up for the stem cell industry. On December 12th, the directors of California Stem Cell Agency will be looking to approve a $40 million research program. Companies like BioTime Inc. (BTX), StemCells (STEM) and CryoCell International (OTCPK:CCEL) are welcoming this news as a potential boon for the industry as state governments are warming up to the emerging technology.

Why should investors ultimately care?

There are a few factors to consider making educated decisions regarding investment in this field. When trying to figure out which company to invest in, always look at the time frames after which a company will be needing money again. When that happens, the value of your share in the company can get reduced in the future. Always be on the lookout for health related facts or side effects that are not mentioned in these companies' press releases. If you invest heavily in a company and then the FDA does not approve it, then all the money can be lost.

As mentioned, stem cell therapy research is an on-going process, and this makes for an extremely risky investment. However, the results have so far been positive and the potential upside rewards are quite lucrative. I cannot recommend any particular names in the medical stem cell space as my research is focused mostly on retail applications, but this article sums up some good opportunities available to risk adverse potential investors.

Which skin care companies are investable and which are not?

In the skin care industry everybody is becoming well aware of the application of stem cells into cosmetic formulas and a lot of products with this emerging technology as a principle ingredient are being launched especially in the anti-aging and skin regeneration niche. However, only some forward thinking companies are embracing the innovation but most are sadly ignoring it and just content on missing the proverbial boat. For this reason, I would get long the innovative players like Estee Lauder and Obagi who are specifically adapting stem cell technology and I would avoid the unimaginative and more traditional names that have not quite adopted this emerging and potentially disruptive technology, like Avon (NYSE:AVP) who seem to be stuck in a contemporary black hole.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.