Late Monday afternoon a U.S. district court in Washington issued a preliminary injunction stopping federal funding of human embryonic stem cell research, casting a shadow of doubt in the minds of investors concerning biotechnology companies specializing in the controversial field of regenerative medicine.
Among those companies is Advanced Cell Technology (OTC: ACTC) which has acquired, developed and maintains a portfolio of patents and patent applications that forms the base for its research and development efforts in the area of embryonic and adult stem cell research.
While ACTC has, up to this point, been among the volume leaders in the penny stock market Monday’s decision could halt the company’s progress. That decision backed a June lawsuit that argued human embryonic stem cell research involves the destruction of human embryos. As it stands, a law already bans the use of federal funds to destroy human embryos.
Just last month regulators gave Geron Corp. (NASDAQ: GERN) the go-ahead to a clinical trial that will test embryonic stem cells as a treatment for spinal cord injuries. Advanced Cell Technology has been waiting nearly a year to get FDA approval for their own clinical trial that would involve human embryonic stem cell therapy to treat Stargart disease, a condition that affects children and could lead to blindness. ACTC believes they should get their answer within 30 days.
So where does that leave Advanced Cell Technology? Fortunately for ACTC shareholders the company isn’t putting all their eggs in the human embryonic stem cell research basket. The biotechnology company recently stated that they positioned to obtain “significant patents relating to cellular reprogramming and the generation of induced pluripotent stem (iPS) cells.”
This is significant because the iPS cells could be just as effective as embryonic stem cells but wouldn’t involve the use of embryos. According to company Chairman and CEO William M. Caldwell if the claims are granted ACTC “, would dominate the use of what the rest of the research community is now coming to understand are the key regulators of induced pluripotency,”
An aggressive patent filing system has been the focus of Advanced Cell Technology for some time, positioning the company as well as shareholders, for tremendous gains if those claims are acknowledged.
A shift away from the controversial human embryonic stem cell research and toward iPS cells offers Advanced Cell Technology a clear advantage over other biotechnology firms battling for FDA approval and following federal guidelines. By eliminating the need for human embryos for their stem cell research ACTC can reprogram cells generated from adult cells to create iPS cells.
As promising as iPS cells are in the fight against debilitating diseases and abnormalities they haven’t quit proven as useful as their embryonic stem cell counterparts. This means there is still plenty of research and development that will have to take place before they become a viable option. While that could take some time it may be the only real alternative as the debate over using human embryos in stem cell research continues to rage. On that issue Robert Lanza, M.D., Chief Scientific Officer at ACT stated “We believe that our protocols for reprogramming cells are scalable and safe, and that in the coming years, will play an important role in helping patients suffering from a range of debilitating diseases.”
Because embryonic stem cell research has continued to find federal backing problematic the biotechnology companies dedicated to regenerative medicines have found that without a legitimate Plan B they could be facing serious trouble. ACTC appears to be positioned on the right path but it could be some time before that path, paved by iPS cells, proves its worth.
Currently, ACTC has a 200 day moving average of 0.0901 and a 50 day moving average of 0.0774 as can be seen in the chart below.
Technical Chart of ACTC
ACTC is a penny stock traded on the over-the-counter bulletin board (OTCBB). Penny stocks are shares in public corporations which trade below $5 per share.
