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Advanced Cell Technology: Buy, Sell or Hold?

Rarely has there been research in the medical field that has engendered such hope as stem cell research.  Heralded as a potential cure for incurable conditions such as cancer, Parkinson's disease, spinal cord injuries and even baldness, this research has the potential of improving humanity forever.  Basically, the concept is cells that can regenerate themselves thus repair damaged or diseased cells in the patient.  However, there is some controversy with the research due to the use of embryonic cells that may require the destruction of a fetus to harvest.

 

One of the company's on the cutting edge of this study is Advanced Cell Technology (OTC:ACTC).  This Massachusetts based research firm was the first ever to obtain FDA approval to initiate a human clinical trial using retinal pigment epithelial cells to treat eye disease.  This trial is slated to start in early 2011.  They also recently announced the filing of an investigational new drug application (INDs) for Dry Age Related Macular Degeneration (DRY AMD).  This market is estimated to be $25 billion to $30 billion in the U.S. and Europe alone, creating a monstrous opportunity.    Interestingly, Geron (Nasdaq:GERN) is the only other firm that has two INDs with the FDA for these therapies.  Addressing the embryo controversy head on, Advanced Cell Technology has an embryo safe blastomere program.  Therefore, even a Federal ban on this embryonic research could help the company as they could be one of the only sources of the material needed should such a ban go into effect.

 

On the financial front, the company has significantly strengthened its balance sheet by paying off around $33 million in debt.  Due to the speculative nature of the research, this company remains a penny stock trading at approximately 20 cents per share.    Technically, price has exploded higher since November 22.  It is trading above both the 50 and 200 day Simple Moving Averages.  The stock hit a high of 26 cents before falling back over the last several sessions.  Although short-term speculators can have a ball trading this stock, I believe the real worth is in the long term.  Should things pan out for the company as it expects, fortunes could be made by owning this stock.  I am very excited about this opportunity and the research.  However, it is very risky at this point.  As they say, no risk, no reward therefore Advanced Cell Technology (OTC:ACTC) is a BUY in my book.  



Disclosure: I am long ACTC.