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Why Cellect Biotechnology Stock Is Skyrocketing Today

By George Budwell - Updated Mar 27, 2017 at 2:19PM

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The stem-cell specialist's first successful transplant caused its shares to explode higher on Monday.

What happened

Cellect Biotechnology (APOP), an Israeli-based stem-cell company, today announced the first successful stem cell transplant procedure using its ApoGraft technology in a combined phase 1/2 clinical trial in a blood cancer patient, causing its shares to rise by as much as 115%. The company's stock has since cooled off, but is still up by 80% as of 3:00 p.m. EDT.   

Rocket blasting off into the atmosphere

Image source: Getty Images.

So what

Even though stem cell transplants can be a curative treatment for many blood disorders and blood-related cancers, they tend to be a treatment of last resort because of their life-threatening side effects, such as graft-versus-host disease (GvHD). So, if Cellect's ApoGraft technology turns out to be a viable workaround, it would be a major advancement in the field, and potentially an extremely lucrative product for the company. 

Now what

While Cellect's announcement is indeed exciting, its stock still isn't a great long-term bet. Cellect exited 2016 with a paltry $8 million in cash and ApoGraft is probably five to six years away from reaching the market. This current trial, after all, is simply a safety and proof-of-concept study that's not designed to provide a basis for a regulatory approval.

In addition, Bellicum Pharmaceuticals' adjunct T-cell therapy BPX-501 could reach the European market as one possible solution to the GvHD problem in blood cancer patients by early 2019, and in the U.S. by perhaps 2020. In other words, Bellicum has a significant head start on Cellect, which may diminish the commercial prospects of ApoGraft moving forward.

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