Okay who is he recommending now? (See last paragraph.)
By Michael Murphy
Editor, Biotech Investing
July 27, 2001
If you've followed the news at all recently (and perhaps even if you haven't), you've probably heard about the ongoing debate over federal funding for embryonic stem cell research. What exactly are stem cells, and why are they important? Quite simply, they are the mothers of all cells -- touted as possible cures for everything from Alzheimer's to diabetes to Parkinson's -- and they hold incredible promise for both patients and smart investors. Here's why.
Imagine having a blank cell that could grow into any kind of cell, tissue or organ in the human body. For example, healthy heart cells that could repair damage suffered in a heart attack. Stem cells have that kind of revolutionary potential. In fact, they were considered the "Breakthrough of the Year" in 1999 by Science magazine. Scientific American has said, "Stem cells might be a cure-all of sorts, basically one-stop shopping for repairing anything that ails you." I couldn't have said it better.
Once, long ago, you were nothing but a stem cell. Human embryonic stem cells are literally the mothers of all cells -- the daughters of the original fertilized egg you once were. When you were born, you still had a heavy concentration of stem cells, 1-in-500 by some estimates. As long as you live, you'll have stem cells in your body, but they become fewer as you age. (Elder humans are thought to have fewer than 1-in-500,000.)
Indeed, stem cell loss is one of the reasons we age. Cells divide a certain number of times, depending upon their function. Until recently, it was thought that human cells divide about 50 times and then die off, usually damaging innocent bystander cells in the process. But then it was found that the "divide 50 times" rule was true mostly in laboratory test tubes, not in the human body.
For example, the cells lining your intestine divide thousands of times before growing old, and so do the cells lining your lungs. By contrast, hearts have very few stem cells in an adult, so hearts cannot renew themselves naturally. The same is true for the islet cells of the pancreas, where insulin is made. But the day may come soon when new insulin-producing cells can be grown from stem cells, curing diabetes.
It was only in 1998 that human embryonic stem cells were first grown in culture. (The company that did it saw its stock jump 150% in one day!) Each pluripotent stem cell (the inner cell that results after an egg is fertilized and starts to divide), given the appropriate growth factors at the appropriate moments during development, has the potential to become any kind of cell in your body.
Now, one of the key issues here is "giving the right growth factors at the right moments." This is a rock over which many companies have stumbled, most notably those specializing in the central nervous system. The brain, for example, is very particular about which growth factors it wants and where. Thus, several companies like Regeneron, which dabbled in diseases like Parkinson's a decade ago, came up with big fat zeros at the time.
But as you can see, the day is approaching when stem cells will open up a whole new world of medical possibilities to patients…and huge profit opportunities for smart investors who own the right companies. I'm currently recommending two such companies to clients of my Biotech Investing service. One in particular has some of the best technology and many of the patents in that area. It's a company with quite possibly the most valuable technology in biotech today, and it's a stock that every biotech investor should own. |
