Another Coin-Flip Bet on a Stem Cell Drug

• By the tickerspy.com Staff
• On 11:08 am EDT, Friday October 9, 2009

The recent pullback in stem cell stocks is testing the 2009 uptrend's support.

In September, when the expected results of Osiris Therapeutics' (NASDAQ: OSIR - News) Graft versus Host Disease (GvHD) study were delayed, Wedbush Morgan Securities analyst Duane Nash offered his opinion to Reuters. Investors assumed that "no news is bad news," he said, and they were right. After the failure of two late-stage studies of its Prochymal drug, Osiris watched its shares tumble even farther, eventually cutting its September highs in half.

One month after Wedbush's Nash commented on investors' pre-data sentiment, he is offering a more optimistic outlook. In another Reuters report issued yesterday, Nash said, "I think there is a strong possibility that Prochymal gets regulatory approval in pediatric steroid refractory GvHD." The question, the analyst explained, is whether the FDA will require further testing or approve it outright. Nash gives it 50-50 odds for an outright approval - the same outlook Piper Jaffray analyst Edward Tenthoff gave the first GvHD study.

Over the last month Osiris' drop has slowed. It is actually outperforming three of its peers in the Stem Cell Stocks Index.

Aastrom Biosciences (NASDAQ: ASTM - News), Pluristem Therapeutics (NASDAQ: PSTI - News), and Opexa Therapeutics (NASDAQ: OPXA - News) have suffered more than -15% losses in the last month.

Meanwhile, only Neuralstem (AMEX: CUR - News) and Cytori Therapeutics (NASDAQ: CYTX - News) are positive for the period.

The Stem Cell Stocks Index's performance chart shows that it is currently testing the low-end support of its upward trend since March. It will be interesting to track the sector as new developments either extend or reverse the sector's rally from 2009 lows.

As of this writing, the Stem Cell Stocks Index's one-month performance is the worst of tickerspy's more than 250 sector-based Indexes, down -12%.

Fun and informative, tickerspy.com is a free investing website where you can track multiple stock portfolios and compare against 250 proprietary Indexes tracking themes from nanotech to agriculture to precious metals. Best of all, tickerspy.com lets you spy on the portfolios of nearly 3,000 Wall Street institutions and hedge funds and see graphs of their performance. Try tickerspy.com today and find out how you stack up against investing legends like Warren Buffett!

Buzz up!