Robin Young's Fourth Annual Stem Cell Summit was about as far removed as you could get from the grim economic headlines. Companies at the summit were presenting in the halo of a market forecast suggesting that this current $65 million dollar revenue industry could well grow to $8.2 billion in ten years.
Even if this potential 32% growth in stem cell products seems overly optimistic, there is something to be said about public company pure plays in the sector being up 5% in 2008 - even if driven largely by Osiris' meteoric rise. Oh to be up in the stock market's annus horribilis!
The themes of the meeting centered around the possibilities of stem cell commercialization, but commercialization does not happen in the long run without real science. The good news is that there was plenty of in depth science presented that supported the clinical and market potential.
We discuss some of our takeaways below:
- However distant, commercialization is real. Forecasts are forecasts, but the industry is developing traction. Big pharma is taking notice and others are beginning to do deals. The notable $1.4 billion (milestone driven) deal between Genzyme and Osiris last year combined with the company's FDA trial progress is inidicative. Could be the beginning of a payoff after 17 years of development and half a billion of capital invested.
- Anti-inflammation is a core element of deploying stem cell technologies. The Summit's keynote delivered by Arnold Caplan at Case Western Reserve set the tone. Stem cell don't just promote regeneration, they aid in dialing down autoimmune responses thus reducing inflammation. The anti-inflammatory potential is not merely restricted to injury given the prevalence of diseases such as Crohn's and graft host disease.
- Sources and uses of cells are expanding. There are three basic sources of stem cells: allogenic, autologous and cultures. Further discoveries are being made on sourcing cells from the placenta, umbilical cord blood and even the amniotic fluid itself. Uses are being furthered such as embryonic stem cells being harnessed for diagnostics not just theraputics.
- Will take some time to gain traction in orthopedics. While the growth possibilities for stem cell applications in orthopedics are high in percentage terms, the ortho component is forecasted to be about 1/8th of the market. Interestingly a good portion of ortho growth is related to cartilage repair. Could the holy grail of ortho come from stem cells?
Exciting stuff, but many of the companies presenting at the Summit were private. So it remains a challenge for the investors outside of the venture capital community to get access to the growth potential save for a handful public companies. And studying those few public companies requires quite a bit of homework.
