Biotechs surge ahead of stem cell vote

NEW YORK (CNNMoney.com) -- Stock prices for biotechs involved in stem cell technology continued to surge Monday, after soaring the prior week, after a new source of stem cells was announced, and as the House prepares to vote on whether to loosen federal funding for research involving embryonic stem cells.

The Monday stock activity follows a Sunday report from U.S. researchers that said stem cells nearly as powerful as the ones found in embryos could be extracted from amniotic fluid, according to Reuters. This could alleviate some of the controversy surrounding embryonic stem cells.

The stock price for Stem Cells Inc., (up $0.15 to $3.47, Charts) a biotech that develops medical technology from the use of stem cells extracted from human embryos, jumped 7 percent in Monday morning trading, after soaring more than 25 percent during the week ended Jan. 5.

The stock price for Aastrom (up $0.10 to $1.55, Charts), another stem cell company, jumped 6 percent on Monday, after rocketing nearly 18 percent during the three trading sessions that were open last week, even though the company specializes in adult stem cells, not embryonic.

The price for Geron (down $0.06 to $9.07, Charts), a biotech that focuses on embryonic stem cells, slipped 1 percent on Monday, loosing some of the ground gained during the prior week, when it rose 4 percent.

Also, the Democrat-dominated House of Representatives is expected to vote Thursday on whether to expand the type of stem cell research that can be supported by government funding.

"This is really an opening move in this chess game, that involves the basic building block of research for stem cells in the U.S.," said Steven Brozak, analyst for WBB. "It's the demarcation line of what this new Congress is going to set up to do."

Brozak said the stem cell research is "the most important research that has ever been attempted in medicine."

The development of embryonic stem cell technology could, in theory, repair the damage from catastrophic injuries and debilitating diseases, such as paralysis from severed spinal columns and brain damage from trauma or illness. But the use of embryonic stem cells is controversial, and has encountered opposition from the pro-life lobby.

President Bush vetoed a similar bill in 2001, and said his administration would not fund the type of research that uses embryonic stem cells, in order to protect the unborn.

The use of adult stem cells are less controversial. Biotechs specializing in that type of technology include Osiris (up $0.24 to $24.60, Charts) and Cytori (down $0.05 to $5.23, Charts), as well as Aastrom.

Brozak does not own shares of stock in the companies mentioned here.

Adult stem cells: better prospects, less controversy