Stem Cell Breakthroughs and Investor Fortunes
Something happened last week that I predicted many months ago. Big Pharm initiated a collaboration with one of the stem cell companies I recommended to my Breakthrough Technology Alert readers. Specifically, Geron Corp. (NASDAQ: GERN) announced a partnership with GE Healthcare.
The deal is to develop and sell drug-discovery technologies derived from two stem cell lines approved by the Bush administration. The stock rose over 10%, adding about $70 million to Geron’s capitalization.
I don’t write this to crow about being right. I write this because it is critically important that you understand that this is just the tip of the iceberg. For anybody familiar with the way pharma interacts with disruptive startups, it was inevitable. New products from Big Pharma have slowed to a trickle in recent years. The old platforms have largely played out. Slowly, recognition is dawning on the world’s medical giants that it’s time to invest in the most disruptive technology the world has ever seen — stem cell technologies.
Let’s look at the implications.
Pharm is a lumbering behemoth. It may take years for the industry to change focus, but it spews cash wherever it turns. The Geron deal is only the first, so let’s consider what’s next.
Geron has had years to cultivate its Big Pharm contacts, but Geron’s founder, Dr. Michael West, was busy creating and acquiring his own stem cell lines. His inventory, as a result, dwarfs Geron’s.
He has, in fact, most of the stem cell lines approved by the Obama administration’s new funding guidelines. They comprise, remarkably, more than 50% of all known eSC lines. At last count, he had over 200 lines, and 88 had important genetic diseases.
These cell lines, incidentally, were acquired from genetic screeners who help parents who carry genetic diseases assure that they do not pass them onto their children. They include cystic fibrosis, Huntington’s, muscular dystrophy and breast cancer.
Ironically, these cell lines hold the promise of producing treatments for birth defects that currently motivate a significant percentage of abortions. This means, of course, that the utilization of these cells may produce cures that reduce abortion rates.
The story does not end there. West’s ACTCellerate platform is producing the tools for potentiating stem cells into different cell types. Currently, West knows how to turn stem cells, including induced pluripotent stem cells created from adult cells, into more than 140 cell types. Recently, for example, he announced the ability to program cells to repair cartilage and connective tissues.
Therefore, the real number of cell lines that he can produce is in excess of 200 eSC lines times 140 SC types, which is over 28,000 cell types. If only a fraction of these cell types have drug discovery potential, West will do very well, indeed.
Yours for transformational profits,
July 8, 2009
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