Tale of 7 stem cell biotech stock woes

To get from point A of a stem cell discovery to point B of a patient actually receiving a treatment based on that discovery is a long and non-linear road, which requires biotech company research.

Stem cell biotech companies including publicly traded companies are an integral part of the field making that journey. How those companies fare financially is not just of interest to investors, but also should be on the radar screen of scientists and advocates too.

Lately, stem cell companies have not been doing so well financially to put it mildly and their stock prices have generally been going down, down, and down further. A lower stock price and market capitalization are not just a headache for investors and bad for the companies, but they also strongly interfere with the progress of the clinical science.

Today I’m looking at 7 stem cell biotechs. To be blunt, why are their stocks doing so miserably?


Ocata Therapeutics (OCAT, formerly ACTC) is the only biotech discussed in this post in which I hold a financial stake and it is a small stake…growing smaller by day as the stock spirals down. If you look at the chart you can see what a terrible 6-months it has been for OCAT.

BioTime (BTX) is another stem cell biotech company often discussed on this blog. Like Ocata, I’m a fan of the science in this company and the scientific leadership. The stock has been seriously roughed up in the last three months after a good period prior to that.

The stock price of StemCells, Inc (STEM) has really been struggling since March, when it took a nose dive and then another precipitous drop in late June.

Caladrius (CLBS), which was formerly NeoStem, is basically at its 52-week low.

Athersys (ATHX) stock dropped off a cliff in April of this year (down more than 50%) and has not recovered at all.

Cytori (CYTX) stock is at a fraction of the price it was a year ago.

Neuralstem (CUR) stock cratered in March and remains way down.

One exception (and I’m sure there are others) I found is Osiris (OSIR), which has had a good run of late.

NASDAQ Biotech index

The NASDAQ Biotech Index (above) has done great in the past year so this trend in stem cell stocks is definitely going against the overall biotech trend.

Stem cell biotechs constitute a volatile area for sure, but in some cases the companies have reported encouraging results and progress. Good news seems to be accompanied by no positive change in the stock price.

If this trend continues at some point are some of these companies going to fold?

Overall, why all the stem cell biotech stock woes of late?

Disclaimer: this post is not financial advice.

11 thoughts on “Tale of 7 stem cell biotech stock woes”

  1. Hi Muggles,

    yes, I am actually a regular on Seekingalpha, though reading too much about oil these days as I have unfortunately too much invested there.
    The few analyses I read about biotech were mostly as I said evaluating clinical trials.
    I am optimistic though and I believe the funding available for research from the market (or venture capital) may grow if worldwide interest rates are to stay low for an extended period as the world runs out of meaningful short term investment opportunities compared to the volume of savings.

    I am enthusiastic about stem cell technology (as an outsider) and I would expect one of the first commercial success could be the mass production of erythrocytes and thrombocytes. There would be no problem with malignancy risk or immune responses either.
    The maturity of the whole stem cell industry could be gauged by this development. However I could find very little on the obstacles to achieving this on google scholar and am unaware that any company is planning to come out with a method like this. Are you?
    Best regards,


  2. @jbdel – thanks for the link – I think I need shares in this company!

    @Gabor – clinical trial success is a key value inflection point for any program, but you can still have an earlier valuation, otherwise no company with preclinical assets would get investors. Analysts predict the likely success of clinical trials based on a number of factors and come up with a valuation – then you know if it’s worth buying in at a given price. This calculation of current biotech value in biotech is (risk-adjusted) net present value (rNPV) and is a monster of assumptions, guesswork and experience (check out seekingalpha,com)

    So funding “research which has no immediate (2-3 years) return” is the business of venture capital and philanthropy and is worth billion of dollars each year – a large chunk of which evaporates and some of it multiplies. The secret is not to put all your eggs into one stem cell company (pun intended).

  3. I think the market does not like to fund research which has no immediate (2-3 years) return. From what I get most analysts focus on clinical trials only and the valuation of a biotech depends mostly on the outcome of clinical trials.

  4. @jbdel – thanks for the link. I’m a regular visitor to seekingalpha.com but I didn’t catch this story. Aside of the business aspects, there are several important statements here that bear on adipose-derived stem cell therapies.

    In particularly: “..another key characteristic of adipose-derived MSCs [eASCs] is their ability to be injected into unrelated patients without requiring any HLA matching or the use of immunosuppressants. While this might seem odd, as the injection of donor-extracted MSCs could be seen as a form of allograft or allogeneic transplantation, raising the fear of rejection or graft-related pathologies, it has in fact been demonstrated to be perfectly safe and uneventful. One explanation is that eASCs have been shown to lack MHC or HLA expression thus contributing to making them immunoprivileged cells …the absence of major adverse reactions related to the injection of allogeneic MSCs is now widely accepted.”

    Wow! It seems as if TiGenix is doing what we all want to see – real controlled clinical trials with characterized SVF MSCs. And the data for stroke are good. Does this mean that all those more unregulated fat stem cell clinics are doing unnecessary liposuction to get autologous cells when they could use a standardized source of MSCs?

    1. hello Muggles – results of the clinical trials in a few weeks…Q32015.
      But there is another new from Tigenix : ” TiGenix acquires Coretherapix, a cell therapy company with an ongoing Phase II clinical trial of allogeneic cardiac stem cells in acute myocardial infarction (AMI)”
      http://www.tigenix.com/ 30 july 2015…enjoy.

  5. @Paul, why so pessimistic? The company has great assets, a platform, clinical programs and a management team that moves investors. In the long term value will increase or they will be acquired – both profitable options.

    The market is fickle in the short term – great for hedges but not a reflection of long-term potential and value. I’d estimate about 3-5 years before they are reflecting value consistently on the market – but you’ll cash out anyways when the Roche rumors begin 😉

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