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Avoiding a rollercoaster in Stem Cell Research investments

In early 2009, the Obama Administration lifted the ban for federal funding for certain types of embryonic stem-cell research that had originally been imposed by the Bush administration in 2001. The move indicated a boon for companies, federal funding, and respective stocks related to the stem cell industry.  Any company involved in embryonic stem-cell research appeared to be a mecca for investment dollars.

 However in August of 2010, Judge Royce Lamberth of the U.S. District Court approved a temporary injunction of federally funded research involving embryonic stem-cells on the grounds that it violates the 1995 Dickey Wicker amendment, which prohibits federal funded research in which a human embryo is "destroyed, discarded or knowingly subject to risk of injury or death”. The injunction halted federally funded embryonic stem-cell research sending the industry into a swift descent of a roller coaster ride, and severely rattling investors.  Companies and scientists who have significant roles in the embryonic stem-cell research industry worked furiously to determine if their research projects were affected by the injunction, which had implications on their funding status and the value of their investors’ stock.

 The upswing of that ride emerged recently as the ban issued by Judge Lamberth was over turned.   While this news appeased the industry, one has to wonder what mid-term elections will bring to the future for the industry. If Democrats lose control of either house of Congress, Republicans bent on overturning ‘Obamacare’ could send the stem-cell coaster ride back on a downhill path, leaving investors white knuckled again and braced for a steep decline.

 If you’re an investor in the embryonic stem cell industry do you just take Meclizine to  ride out the motion sickness?   The answer is, you don't have to. 

With some qualified research of your own, you may be able to determine what companies, and respective stocks, are not subject to the roller coaster of politics within the embryonic stem cell research industry, and whose fortunes and research funding are not affected by the swing of a pen of a president or the prevailing party in Congress.   The key is to look for firms that use new technology designed to harvest stem cells without destroying the fetus therefore avoiding funding and political controversies, and judicial court rulings. These “embryo-safe” stem cells may be the key to advances in research and cell harvesting which lead to life saving measures in the years to come (for adults and children alike), therefore fueling the growth of companies, and potentially their stock price.

 Another potential safeguard to avoid a white knuckle investing experience is to invest with firms who do not rely on government funded research for their product development.  This funding information is readily available in any company’s investment prospectus or through inquiries to their investor relations’ departments.



Disclosure: No Holdings