In news that's sure to upset the vocal fringe group "Homo Sapiens," Britain's Human Fertilisation and Embryo Authority (HFEA) announced yesterday that it will permit scientists to create human-animal hybrid embryos.

Nor is this a theoretical ruling. HFEA, which regulates human embryo research in the U.K., currently has two applications pending approval, which -- according to The Washington Post -- could be granted as soon as November. In each case, the application asks HFEA to approve the taking of an animal egg (a cow or rabbit, to be precise), sucking out most of the dam's original DNA, and injecting human DNA in its place. (Personally, I prefer my bunny eggs to consist of a tasty milk chocolate shell, filled with a sugary concoction and delivered around Eastertime. But to each his own.)

Why all the Frankenstein-ing around in Merrie Olde England? It's the usual reason: finding new ways to create stem cells for research, without entering into the hotly debated ethical bog of creating human life and then mining it for spare parts. Technically, by using an animal egg, the science experiments in question will result not in "human life," but in the creation of "chimeras" -- a term referring to hybrid creatures, derived from the mythological lion-headed, goat-torsoed, and snake-tailed critter of Greek lore.

I suspect that news of this development will initially spur interest in shares of stem cell researchers such as Geron (NASDAQ:GERN), StemCells (NASDAQ:STEM), and Osiris Therapeutics (NASDAQ:OSIR). Like the proverbial butterfly in China affecting the weather half a world away, any liberalization of the laws restricting stem-cell research, anywhere in the world, will ultimately push forward the debate here in the United States. But in this Fool's view, HFEA's decision is a cure worse than the disease, conjuring up thoughts of the chimerical Island of Dr. Moreau (if not quite as badly acted).

While perhaps a logical workaround to the purely scientific mind, the idea of creating chimeras seems to me "monstrous" by definition -- and I expect the general public to react similarly. Granted, in the U.K., embryos created for research are required by law to be destroyed within 14 days. But it's another law that I'm worrying about, and that I expect the public will worry about, too: the law of unintended consequences. Once this research is legalized, you just know that at some point, someone, somewhere, is going to try to bring one of these chimeras to term.

With every action inevitably yielding an equal and opposite reaction, I suspect that as the general public recoils in horror over this decision, we'll see it rebound to the benefit of companies with less objectionable ideas for stem-cell collection -- such as cord-blood storage specialists ViaCell (NASDAQ:VIAC), Cryo-Cell (OTC BB: CCEL), and privately held Cord Blood Registry.

For related Foolishness on the issues and the industry, read:

Fool contributor Rich Smith does not own shares of any company named above. His dog may think she's human, but she lacks the DNA for it. He thinks. The Motley Fool has a disclosure policy.