Using a patented, proprietary method of replicating stem cells gathered from bone marrow, AastromBiosciences (Nasdaq: ASTM) announced it had received FDA approval to expand clinical trials of its bone graft repair product. It marks another milestone in the progress of stem cell research, a field of study that is often clouded by misunderstanding and politics.
Aastrom's Tissue Repair Cells were initially used in patients who had fractures of their tibias that would not heal even after extended periods of time. Using a mix of bone marrow stem cells and progenitor cells -- a sort of advanced form of stem cell -- the company was able to meet the FDA's clinical safety standards and can now expand the use to patients suffering from fresh fractures.
Stem cell research has been marred by the injection of politics into the field because of opposition to use of embryonic stem cells in research. Embryonic stem cells are derived from embryos, as the name implies, and can turn into any other type of cell. They're essentially a blank slate that researchers can use in any part of the body. Because of political, religious, and moral opposition to their use for fear of encouraging abortions, there has been a lot of misinformation and distortion, and many people equate all stem cell research with embryonic stem cells.
However, the sort of stem cells used by Aastrom are not culled from embryos but rather from adults. Yet adult stem cells are somewhat more limited; they can generally be used only in the organ in which they are found. And whereas stem cells are unspecialized, progenitor cells have already begun the path toward specialization. In its study, Aastrom collected the cells from the adult patient's hip and reproduced them using its proprietary technology. They are able to turn into different types of tissue, such as blood, bone, and cartilage, among others.
While stem cell research has the potential to become a Rule Breaker technology, it is indeed an unproven, high-risk science. Companies such as Aastrom, StemCell (Nasdaq: STEM), and Geron (Nasdaq: GERN) are among a group of fewer than 100 companies worldwide engaged in the field of stem cell research. Yet finding one that is profitable is as complicated as the science behind them because it is still an emerging field.
For investors looking for an entree into the field, you might consider a "picks-and-shovel" company such as Invitrogen (Nasdaq: IVGN), which is the primary provider of the media in which stem cells are grown. It is profitable, generates considerable amounts of free cash flow, and has a diversified product line that saw revenues jump 34% for the first 9 months of the year. But with a P/E of 52, it's not cheap.
Aastrom and the other stem cell companies have the potential to make significant scientific achievements. It will be an industry worth keeping an eye on. Break a leg!
Interested in finding out more about this nascent industry? Start here:
Fool contributor Rich Duprey still has pins in his hip from a fracture suffered as a result of a car accident. He does not own any of the stocks mentioned in this article.
Terms & Conditions
RSS Headlines
Fool UK