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Mo. stem cell vote aids biotechs

Price up for Stemcells, Geron ahead of initiative, which squeaked to approval.

By Aaron Smith, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- The results of Missouri's referendum on stem cell research Tuesday could impact several biotechs specializing in that line of work.

In fact, they already have. Judging from recent stock activity, investors seemed to think that voters would approve Amendment 2, which would ensure that any federally approved stem cell research and treatments would be available in Missouri.

It looks like they were right - barely. The initiative carried by about a 51-49 margin as of 3 a.m. ET.

"This is delineating the first real battle ground for stem cell research in America today," said Stephen Brozak, analyst for WBB Securities.

Stock prices for two biotechs specializing in embryonic stem cell research - Stemcells Inc (Charts). and Geron Corp. (Charts) - have risen since the beginning of last week, when the political advertising and rhetoric really ramped up. Stemcells stock has risen about 4 percent in the last week or so while Geron is has surged nearly 40 percent since the beginning of October.

"All boats are lifted by this type of a rising tide," said Brozak, noting that biotechs involved in the less controversial adult stem cell research are also being affected by anticipation of the Amendment 2 vote.

Thermogenesis Corp. (up $0.03 to $4.38, Charts) has jumped about 6 percent in the last seven sessions and Osiris Therapeutics (down $0.04 to $16.00, Charts) is up about 4 percent, while trading has been flat for Cytori Therapeutics (up $0.04 to $4.14, Charts). These adult stem cell companies harvest stem cells from donated human tissue instead of embryos.

As always with biotechs, beware that investing in these companies is risky. Brozak said that a negative vote on the referendum could have a big negative impact on the biotechs.

The Missouri referendum has gotten a lot of nationwide attention, aided in no small part by Michael J. Fox, an actor with Parkinson's disease who appeared in television ads supporting stem cell research. Proponents of stem cell research point to its possible but so far unproven benefits, such as curing Parkinson's and other debilitating diseases, and repairing spinal and cerebral damage.

President Bush has spoken out against embryonic stem cell research for the same reason that he opposes abortion. Earlier this year, Bush vetoed a bill that would loosen federal restriction for stem cell research.

Geron gains on stem cell rat study

Biotech stock sector Top of page

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