Despite not knowing whom the ultimate winner of the 2008 Presidential election will be, it looks like stem cells may be one of the real bright spots as far as which area in biotech will be open for more funding down the road.  If the Democrats win this is a shoe in.  If McCain wins, the current research clamp-downs won’t likely be as stringent in 2009 and beyond as they are today.  If Romney stages a comeback, despite many thinking of him as a religious figure our indications are that he at worst would not be anywhere as tough on the stem cell studies as the current administration.  Public companies such as StemCells Inc. (NASDAQ: STEM), Geron Corporation (NASDAQ: GERN), Aastrom Biosciences, Inc. (NASDAQ: ASTM), and others are going to be watching closely.

If you look at Tradesports.com for the political futures, you can see the Presidential nominee futures right now if you want to make a determination where the actual money bets are going right now.  McCain is priced at $93.00 and Romney is now priced at $1.90, so this would indicate a 92.9% probability of a McCain nomination.  The Democrat race is much closer right now with Tradesports showing a Hillary Clinton nomination with a $54.60 price (down $8.40), and Obama with a $47.40 price (up $8.90).  So the futures are showing a McCain essentially as a shoe-in now, yet the Democrat race is still too close to call.  Guess what, this would be a win-win for stem cell research beyond this year.

Last June (boy, these guys have been running forever already) both Clinton and Obama criticized Bush’s stem cell veto.  There you can see a link to each comment from either candidate.

StemCells Inc. (NASDAQ: STEM) shares have surged some 20% in the lasttwo trading days, and shares are some 40% under its 52-week highs.Geron Corporation (NASDAQ: GERN) shares are basically flat over thelast two days and are almost 50% under 52-week highs.   AastromBiosciences, Inc. (NASDAQ: ASTM) shares are up over 20% in recentsessions with shares off more than 50% from their 52-week highs.  Thereare some other stocks that have stem cell exposure as well:

• Invitrogen Corp. (NASDAQ: IVGN) also has a broader stem cellmonitor kit for analyzing the state of human embryonic stem cells,although this is a much larger company and its shares are up some 3%after earnings.
• Osiris Therapeutics (NASDAQ: OSIR) also has an FDA fast track designation for its stem cell treatment PROCHYMAL for the highly debilitating Crohn’s Disease.
• Two smaller plays here are Thermogenesis (NASDAQ: KOOL) and the OTC stock Cryo-Cell International (OTCBB: CCEL).
• There is also a smaller AMEX listed company called NeoStem Inc.(AMEX: NBS) that just yesterday announced a New York state license forADULT Stem Cell collection, so this one may have an implied ‘less controversial stance’ to it.

Obviously this is a controversial area for many, and there are manyarguments on both sides that have merit.  This is the Wall Street angleto a controversial situation.

Jon C. Ogg
February 6, 2008

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