The Motley Fool's new Rule Breakers newsletter service is closely monitoring developments in stem cell research, looking for up-and-coming biotechs offering the potential for 50-bagger returns. Still, many investors have serious reservations about research in this area. Once upon a time, one of our old-time favorite companies, human genome researcher Celera Genomics (NYSE:CRA), was widely panned by Fools on our discussion boards for associating with stem-cell researcherGeron (NASDAQ:GERN), which "harvests" human embryos for its research.

No such objections are raised, however, to the use of stem cells derived from umbilical cord blood from newborn infants. And in twin announcements over the holiday weekend, such stem cells were shown to have considerable promise. On Friday, TheWall Street Journal reported on two studies exploring the use of cord blood to treat adults -- even those unrelated to the donors -- for leukemia. A couple of days later, ABC News announced that doctors in Korea had used cord blood to repair an adult woman's 20-year-old spinal injury and cure her paralysis.

Because stem cells harvested from cord blood do not involve the termination of a fetus, they sidestep the ethical debate over when life begins. Thus, this is a cure that both sides can agree on. What's more, while studies suggest that cord blood-originated stem cells are less versatile than embryonic stem cells, cord blood stem cells have the advantage of being less likely than embryonic stem cells to trigger an immune response in patients.

As for what companies stand to benefit from this new field of medicine, the leader in the field appears to be a private company called ViaCell, whose ViaCord subsidiary currently "banks" blood from 20,000 umbilical cords deposited by parents who pay for this service. The company is not yet publicly traded, but did file an intent to go public back in April, with the proposed Nasdaq ticker VIAC. Another "Nasdaq hopeful" is a company variously known as Cord Blood America or Cord Partners, which, unsurprisingly, intends to take the Nasdaq symbol CORD. At this time, the only public company directly involved in cord blood collection and storage is a little company that is only traded "over the counter": Cryo-Cell (OTC BB: CCEL), which last year lost as much money as it collected in revenues, and which has a sales growth rate just a fraction of ViaCell's.

It's far too early to say whether any of these companies will evolve into the 21st century's version of Pfizer (NYSE:PFE), Merck (NYSE:MRK), or Johnson & Johnson (NYSE:JNJ). But the technology does seem to have the potential, and Rule Breaking investors may want to keep an eye on these contenders.

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Fool contributor Rich Smith owns no shares in any company mentioned in this article.