Which of these ASX-listed stem cell stocks will make the next breakthrough?
Health & Biotech
It’s no secret that stem cells are thought of as a sort of utopian solution in the medical world.
In the past month news headlines have spruiked stem cells as a potential cure for cystic fibrosis, Parkinson’s disease, heart failure, infertility, cancer and more.
There are some 2,485 stem cell clinical trials going on around the world — and that’s just the active ones.
The stem cell market is expected to reach $US15.6 billion by 2025 with a growth rate of more than 9 per cent, reports Grand View Research. In 2016, the market was estimated at $US6.9 billion.
That’s good news for the handful of ASX-listed biotechs focused on stem cell research (see below).
Stem cells simplified
Stem cells are cells that are found in all multicellular organisms — that is, organisms that consist of more than one cell, which includes everything from algae and mould up to human beings and blue whales.
What makes them special is they can change from one type of cell to another via a process called differentiation, and they can then divide and produce more of that type of cell.
This ability means they have limitless medical potential. We know we can create stem cells in the lab, so what if we could differentiate them into any of a person’s cells that needs repair?
That’s what these ASX-listed stem cell companies are looking into.
ASX-listed stem cell companies
There’s a range of ASX-listed companies working with stem cells, either as their singular focus or dabbling in it on the side.
One of the country’s pre-eminent biotech experts, David Langsam, is owner and author of Biotech Daily, which covers more than 140 ASX-listed biotech companies.
There are four companies with stem cells as their core focus: Cynata Therapeutics, Regeneus, Orthocell and Mesoblast, which is the biggest and best-known.
“I have great respect for all four companies, they’ve all had different degrees of success,” Mr Langsam told Stockhead.
“Not one yet has made the billions we hope for but it’s a very difficult and slow-moving area.”
The four key stemcell stocks:
Cynata (ASX:CYP) is easily the best-performing of the four. Its stock has ballooned 103 per cent over the past year, following positive results in its Phase 1 trial targeting graft-versus-host disease (GvHD). That is their only in-human trial, but it is also targeting a number of other indications in pre-clinical trials currently, such as heart attack, shock lung and asthma. They had $12.2 million in cash at the end of the June quarter.
Mesoblast (ASX:MSB) has been around a long time, having been founded by Silviu Itescu in 2004. The company traded as high as $9.50 in October 2011, though it now sits at $1.71 — a 2 per cent improvement over the course of 12 months. It has by far the biggest market cap, at $820 million, and is also quite advanced, having reached Phase 3 trials for a number of indications. Its cash balance at the end of June was $US77.8 million.
Orthocell (ASX:OCC) is up 8 per cent year-on-year. It’s dedicated to providing treatments for people who are suffering from tendon, cartilage and soft tissue injuries. Orthocell says it can grow patients a 26 per cent better jaw bone and treat severed nerves. It had $2.9 million in the bank at the end of June.
Regeneus (ASX:RGS) has had a terrific year, up 50 per cent at around 18c. That’s been driven by strong news flow, including positive results from a cancer trial and reduced osteoarthritis knee pain. It’s got $1.09 million in the bank, according to its latest statements.
There are also a handful of other ASX-listed biotechs who have dabbled in the stemcell area such as Kazia Therapeutics, Avita Medical, Holista and cannabis plays Stemcell United and Zelda Therapeutics.
Which ones to back?
As ever, it comes down to clinical results, Mr Langsam says.
“The mantra is large, randomised clinical trials of several hundred patients followed up by quarterly reports which shows receipts showing an upward trend.
“That’s the proof in the pudding.
“It is the future of medicine, but maybe not this generation.
“These companies have been around for years and are very serious about their work but it might be the next generation that provides the real breakthroughs.”