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Stem Cells Have a Long Way to Go

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StemCells (NASDAQ: STEM  )   stock jumped more than 20% after the biotech released long-term data for its neural stem cell product HuCNS-SC, but investors seem to be coming to their senses today, knocking it down about 5% as of this writing.

No doubt the data are tantalizing. Of the three patients that were treated with HuCNS-SC a year ago, two have seen gains in sensory function -- detecting touch, heat and electrical stimuli -- which was also observed at the six-month follow-up. One of those patients converted from a complete spinal cord injury to an incomplete injury since the last update.

What does this mean? Unfortunately, not a whole lot. There's varying degrees of the definition of an incomplete spinal cord injury, but it's still considered a paralysis. It's not like these patients have gotten up and started walking.

Investors should keep in mind that StemCells has a long way to go. It's hard to draw hard conclusions from three patients in an uncontrolled trial. Sarepta Therapeutics'  (NASDAQ: SRPT  ) trial testing eteplirsen in Duchenne muscular dystrophy had eight patients in the drug arms and a placebo group to compare against, and many people question whether the data is strong enough to convince the Food and Drug Administration to approve the drug.

That wasn't really the point of StemCells' trial, of course; it was more of a proof of concept. I think the biotech has proven that HuCNS-SC likely has activity (without a matching placebo group, we can't know for sure). What isn't clear is whether the activity is clinically meaningful. What's the point of getting the injection if it doesn't improve your quality of life?

StemCells is running a second cohort of patients with incomplete injury, hoping that they can see a more dramatic effect starting with patients that aren't as severe. Whether it works or not, we're still years away from HuCNS-SC getting on the market.

The reason why Geron (NASDAQ: GERN  ) got out of the stem cell business wasn't necessarily because there wasn't promise, but because it was clear that development was going to be costly and time-consuming. There's still a lot we don't know about how to create stem cell treatments.

At a market cap of $70 million, it's hard to call StemCells overvalued. But if you're going to buy, be prepared for a long haul that might never result in a product.

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Read/Post Comments (9) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 13, 2013, at 2:49 PM, ICanFool wrote:

    Brian is a total idiot. Not a fool yet. We will give him the longest rope to hang himself with his comments in the days to come. The trial is to prove the safety of stemcells and the results went far beyond expectations, showing the potential of the stemcell cure. He writes on behalf of the shortsellers who is waiting to buyback those stocks. The has been at 2+ territory before.

    STEMCELLS Inc progress has been phenomenal. There is no other cure thru medicine. Hope is closeby with the progress made by stemcells inc. Did brial hear/read about the rat that was able to walk after paralysis? Brian is a patheically negative

  • Report this Comment On February 13, 2013, at 3:07 PM, tellis1112 wrote:

    How stupid can you idiots be. There is no hope for these patients and this seems to be the only answer even remotely close. If I were a paraplegic and now I can feel heat, touch etc. it would be a great day for me. They were entirely successful in the trial. Of course there is a way to go but its nice that the expectations were met.Would you rather that no change occurred? You clearly do not know anything about medical research. You're the kind of guys who think lab results in 10 mice that shows improvement is a major break through. This is the kind of do-do that we always see on the 7 o'clock news and they it get from know nothings like you.

  • Report this Comment On February 13, 2013, at 3:11 PM, rdsrich wrote:

    fails to mention other testing going on....the treatment for paraplegics is a known fact will last years and years, hopefully not...but Stemcell has macular degeneration tests going on that are successful, among many other things, all it takes is one for a HR here...and with market cap so low, a buyout with one success is a sure thing

  • Report this Comment On February 13, 2013, at 3:12 PM, rdsrich wrote:

    also, look at Brians picture,with all due respect he cant have many years experience in the biotech research field. Looks more like a sportswrite for a AAA class hockey team, but good luck to you Brian.

  • Report this Comment On February 13, 2013, at 7:32 PM, bobleeman wrote:

    Bri Is correct in some aspects of his posting. Im not happy it got posted on Yahoo Fiance page.

    This not a a 3B Pharma/Bio Co. This Co. has patents and and a future, I wish you had done you homework before you spouted out. Regardless if this was a FDA or other regulatory controlled study, it was a success, this is the future. Drugs will not correct any of these malaise, the future is Stem Cells.

  • Report this Comment On February 14, 2013, at 5:24 PM, BJCummings wrote:

    Brian Orelli clearly has no understanding of the subject area he is giving investment advice on. Conversion from an AIS A designation (complete) to an AIS B (incomplete) could be life-changing to a patient.

    For a patient to have a conversion so long after their injury is very rare and thus is likely attributable to the stem cell therapy, not random chance. Of course, this is a safety trial, not an efficacy trial and there was no placebo. However, having no sensation and being unable to feel a bedsore to now knowing/feeling that something is rubbing on your skin and you need to shift positions or risk getting an infection is a big deal. Having no bowel or bladder sensation and then being able to feel when your bladder is full is a big deal. It is indeed an improvement in the patient's quality of life. No, patients are not walking, but that result would be beyond a grand-slam and is unrealistic.

    Disclosure, I hold no position in STEM. I am a neurobiologist who worked on the preclinical research which supported this trial.

  • Report this Comment On February 14, 2013, at 7:47 PM, ICanFool wrote:

    Thanks BJ. People like spend your life so that others can regain their life and be a human again instead of vegetable. The beginning of hope thru regained sensation must be awesome for those living like a vegetable. Hope FDA can fast track based on the safety trial on a big number to make it statistically significant. If the disabled rat can walk, how long does it have to be for human victims get the chance to become mobile again?

  • Report this Comment On February 16, 2013, at 8:56 AM, zzlangerhans wrote:

    If only there was a stem cell treatment for illiteracy I might be able to read the comments on this article. Maybe some day.

  • Report this Comment On February 18, 2013, at 2:37 PM, daven19 wrote:

    It's incredible though how far research in stem cell regeneration has come. Like Doctor Xu and his ointment for instance, incredible

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