Biotech Investing

Stem cell research seems to be heating up—a hypothesis further evidenced by 2016’s acquisition activity.

Are stem cell securities a fool’s game? A decade ago, the answer from unlucky investors may have been a resounding yes. Back then, hot companies went bankrupt, others devalued as much as 99 percent. And that led select investors to swear off stem cell companies for good … but they just might be worth a second look.
As we’ve covered elsewhere, stem cell research seems to be heating up—a hypothesis further evidenced by 2016’s acquisition activity.
Take Thermo Fisher’s (NYSE:TMO) recent purchase of MTI-GlobalStem. On November 29, 2016, Thermo Fisher announced it had acquired this private company, which provides neural and stem cell growth media, assay kits, feeder cells and more to the life sciences research market.

“Their technology and expertise, combined with Thermo Fisher’s global commercial reach, is a strategic fit that enables us to better serve our transfection and stem cell research customers,” said Amy Butler, VP of Cell Biology at Thermo Fisher.
Clearly, Thermo Fisher is banking on the stem cell market continuing to grow. In fact, buying MTI-GlobalStem isn’t the company’s first investment in this area.
Early 2016 saw Thermo Fisher announce plans to acquire Affymetrix. Their products center around cellular and genetic analysis, tools required in stem cell research. That deal was finalized in April 2016.
And Thermo Fisher isn’t the only one investing in this market. AbbVie (NYSE:ABBV) bought Stemcentryx for $5.8 billion this year, adding several stem cell protein-targeting cancer therapies to their pipeline.
Back in 2015, Fujifilm (TYO:4901) made headlines when it acquired Cellular Dynamics International, which produces pluripotent stem cells. This year, Fujifilm expanded its stem cell interests further: a partnership with Cynata Therapeutics (ASX:CYP) is in the works. Ross Macdonald, CEO of Cynata, told us the companies aim to have that deal completed before year-end.
Some investors may have soured on stem cell stocks—but it seems major companies aren’t counting them out just yet. Certainly, this is a volatile market, where returns are far from guaranteed. But for the risk-tolerant investor, stem cell stocks are worth considering.
Don’t forget to follow us @INN_LifeScience for real-time news updates.
Securities Disclosure: I, Chelsea Pratt, hold no direct investment interest in any company mentioned in this article.


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