Prospects for stem cell stocks in 2016

stem cell stocksMoney plays a major role in the arena of stem cells, cell therapy, and regenerative medicine. The financial side of this cutting-edge field ranges from grants to private investors to publicly traded stocks. One could argue that the flow of total investment going into this area has a direct and tangible impact on how rapidly and effectively the research moves forward.

In the specific area of publicly traded companies working in stem cells, cell therapy, and regenerative medicine, what’s the investment outlook for the coming year? How will stem cell stocks do?

I’m not an investment expert so don’t take this post as financial advice, but overall things look pretty mixed for 2016. On the one hand, there have never been more clinical trials and ones with real potential, which is a great positive hallmark. On the other hand, for many stem cell companies what seems to be “good news” does not always equate to consistent increases in the stock PPS or company valuation. It’s a super high-risk arena for investors.

Pharma purchases in 2015 of stem cell companies such as CDI and Ocata can also be viewed in polar opposite ways. This could signal more purchases/acquisitions of stem cell biotech’s coming in 2016 and that could both help get treatments to patients and benefit investors, but will the price be right and does it translate to a positive outcome for investors? Many investors are very unhappy about the price paid for Ocata. What do you think of that sale?

What are your favorite stem cell stocks as you look ahead to 2016 and why? Do you see acquisitions coming? What about IPOs? Could an exciting stem cell company such as ViaCyte do an IPO in the next 12-24 months?

21 thoughts on “Prospects for stem cell stocks in 2016”

  1. Hi WST, you make the comment in your December 28 post: “MAPCs have a major advantage over MPCs in that they can be expanded to a point of procuring millions of doses per donor without a loss in efficacy.” I am intrigued about the evidence supporting this statement, especially given the clinical results for MAPCs to date. Are you able to elaborate?

      1. Thanks WST for drawing my attention to the 2009 publication by Ji et al. Whilst this publication identifies apparent differences between MAPCs and MSCs in terms of morphology, cell surface markers, differentiation
        potential, and effects of multiple passages, to my reading it says nothing about efficacy, or retention/loss thereof upon expansion. Efficacy is ultimately determined in controlled clinical trials and thus far neither MAPCs nor MSCs, derived from primary tissue sources, have been shown to be capable of being expanded to derive “millions of doses without loss of efficacy”.

        1. Ross, yes you are correct that efficacy can only be determined in the clinic but the point is that if either MSCs or MAPCs do demonstrate efficacy in a placebo controlled double blinded trial, MAPCs will have a distinct manufacturing advantage. That was the point I was trying to make.

  2. As someone without a scientific background, but one that has watched this sector since 2005, I would only place my money on the most primitive derivation of MSC’s, and that would be for Lanza’s Hemangioblast derived MSC’s. We now have access to three published papers on the power of these cells, Chrohns disease, Lupus Nephritis, and Multiple Sclerosis in their animal tests. Any drug compound that would achieve the same results in these animals would be hailed as a Medical Breakthrough of the century. Why there has not been major media coverage on these discoveries is my question. Paul, Is there a reason I am dead wrong ?

  3. Paul this is a great article. .. but Astellas’ attempt to purchase Ocata is not yet a done deal and not yet a sale. Retail stockholders banded together to reject the initial offer. We succeeded . We don’t yet know what will happen… but the company HAS NOT YET “been sold “

  4. WST, I understand your position. You probably know that I am firmly in the pluripotent stem cell camp.

    I’ve never done research with MSC-spectrum (“MSC-S”) cells (I’m coining that term ironically, since MSCs are very diverse), except to profile a few different samples using gene expression.

    My curiosity about such cells came as a consequence of being consulted in the examination of the MAPC paper that was retracted in 2008 (story about it:

    It would be great if all of the myriad MSCs effectively suppressed inflammation in heart disease and stroke- they might have advantages over systemic administration of anti-inflammatory drugs. The problem is that so many, many clinical trials with MSC-S cells have failed, I think because the cells didn’t live up to the scientists’ hopes and dreams. The exception is graft vs host disease in children receiving bone marrow transplants- the cells used (Osiris’s version of MSCs) seem to be helpful in that case.

    You are well educated about this subject, which is why I asked that you share the information that all stem cells are not alike with your readers- who are probably laypeople investing in companies. It would be great for you to help them to be educators to their colleagues who are interested but don’t know enough.

    1. Thanks for your comments Jeanne. Not all stem cells are created equal and I do try to share that concept with readers. This topic is even more critical to those desperate patients who seek stem cell treatments and not only have no idea what the differences are but, incredibly, have no FDA enforced safeguards in place to insure that they are receiving viable stem cells in the first place! The jury is still out on which cells will work and for what indication and we are all still looking forward that first major breakthrough.

  5. Thanks Jeff. I havent traded on the TSE so I cant provide any insights. May I ask if you or anyone else was able to access the ATHX analysis I linked to?

  6. @WST – thanks to you alphas for the superb reviews – a real education as well as a free stock tip!

    I’m thinking of picking up Healios stock in the hope they become another CDI, but it’s traded on the Tokyo Stock Exchange (TSE). Given that we expect many Japanese companies to be major players in the stem cell field can you give any insights into playing on the TSE?

  7. Jeanne thanks for pointing out the different types of stem cells….. The differences should be look at from the potency, migration and cytokine productions in microbiome ….you can setup QC assays to standardize these functions in Flow and gene expression and or SNPs PCR

  8. I have a question for WST. Have you (or would you) explain to your readers the differences between the types of stem cells used by different companies? They are quite different.
    Athersys has its own patented version of adult mesenchymal stem cells (MSC) and Ocata and Viacyte are using human embryonic stem cells (hESC). WARF’s patent on hESCs expired this year. Stem Cells Inc. has IP for fetal-derived neural stem cells (NSCs).
    hESCs are pluripotent, of course, and can make all cell types, but the MSCs and NSCs have very limited differentiation ability. This means that strategies for cell therapy are dependent on the cell type that the company is using (or holds patent rights to).

    1. Jeanne, you already did a good job of explaining. I’ll add a bit though. Mesoblast uses two major types of cells. Mesenchymal stem cells that were acquired from Osiris for a song and a dance that have recently been approved in Japan for GvHD with full reimbursement. They also use bone marrow derived mesenchymal precursor cells (MPCs) in their clinical trials. Athersys uses a bone marrow derived cell they call multipotent adult progenitor cells (MAPC) that are expanded in a product called MultiStem. MAPCs have a major advantage over MPCs in that they can be expanded to a point of procuring millions of doses per donor without a loss in efficacy. MPCs are limited in expansion capabilities, a definite disadvantage. Cytori uses the autologous model and extracts adipose derived regenerative cells using proprietary technology in a same day procedure.

      Disclosure – I own Athersys and Cytori.

    2. One more point. Adult stem cells (MESO, ATHX,CYTX) generally work in a paracrine manner. In fact, Arnold Caplan recently proposed changing the acronym, MSC, to Medicinal Stem Cells. In fact, the MOA of MultiStem in stroke is primarily to mitigate the spleen’s inflammatory response that does much if the damage in an iscemic stroke.

  9. Hi Paul,

    I follow the stem cell sector closely for Seeking Alpha under the alias Wall Street Titan Research. The sector has been a major disappointment but I’ve laid out my case that Athersys is well positioned for 2016 in this extensive article:

    The article is behind a paywall until Jan 20 but I understand that some have been able to access it early.

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