Sunday, February 08, 2009

CIRM and the Stem Cell Industry: A Lobbying Question

The state of the stem cell/biotech biz drew some attention late last week in Business Week along with a piece on Stockpickr.com dealing with Geron.

Business Week reporter Ben Levisohn painted a depressing picture for most "middling" companies. He wrote that Big Pharma is buying Big Biotech – not the smaller companies. He said,
"That's bad news for small biotech companies, who are already facing a spate of problems. A recent study estimated that 50% of the roughly 380 publicly traded biotechs have less than one year of cash remaining. In the past, they would have raised new capital by selling shares, merging, or partnering with a larger outfit. But for publicly traded companies, equity deals are out—none has been brought to market in the last year, and few are expected to see the light of day in 2009. And even if a deal could be brought to market, with the smallest 10% of stocks in the Nasdaq Biotechnology Index trading down 84% from their 52-week high, vs. 21% for the largest 10%, an equity deal wouldn't make financial sense for many companies."
Over on Stockpickr.com, they had this to say,
"Over the last three months, shares of biotechnology firms Geron (GERN) and StemCells (STEM) are up roughly 200%, compared with a decline in the S&P 500 of almost 5% and a decline in the Nasdaq Biotechnology Index of about 3%.

"So why have both names massively outperformed the boarder market?"
Stockpickr laid out Geron's upcoming clinical trial and surrounding hoopla, but concluded:
"There are still several unknown variables that could take the short-term momentum out of both names."
The Business Week and the Stockpickr pieces could be construed as arguments for the $10 billion biotech aid package promoted by CIRM Chairman Robert Klein. However, the question for the stem cell agency is whether it should be in the business of lobbying the federal government on behalf of the industry. Klein would probably put the question another way: Should CIRM support assistance to the biotech biz so that therapies will result and suffering eased? Sphere: Related Content

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