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Advanced Cellular
(OTC BB: ACTC): High Profile News Fuels Wild Roller Coaster Ride |
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The last two weeks of August are
generally the quietest of the year. Not so for ACTC, the subject
of my last two editions. Today will make three in a row- unprecedented
in the 8 year history of the OTC Journal.
Prior to the publication in Nature
Magazine, ACTC was lucky to trade 100,000 shares a day. The
day the Nature article came out the stock traded 24 million shares
in two trading days, moving up nearly 400%. This past Friday the stock
traded 2.5 million shares. The day traders are now all over this one.
Most of the gains enjoyed by those
first two days have been surrendered thanks to some rather nasty publicity
following the release of the article. Not surprising. I should have seen
it coming. There are, of course, many misconceptions about what the company
has achieved. Let's try to straighten them out.
Just prior to the release of the
article, Nature Magazine put out a press release stating the ACTC
study showed a stem cell line could be created from a single cell derived
from a Blastomere. A Blastomere is an early stage human egg. According
to the press release, scientist Dr. Robert Lanza of ACTC
had succeeded in removing the required cell to create a fetal stem cell
line while leaving the egg intact. The human egg could then be taken to
term. ACTC chief scientist Dr. Michael West stated in a conference
call that the company had met President Bush's challenge.
Then came the naysayers who have
viciously attacked the study, and spun their view to meet their moral objective.
Here's what happened. The Nature press release stated the eggs used
were left intact. The article correctly stated the eggs were destroyed
for this particular study. Dr. Lanza had removed more than one cell,
rendering the eggs unusable for future fertilization. It was not the purpose
of the study to try keep the eggs intact. Dr. Lanza was trying to
create new stem cell lines, and wanted to maximize his opportunity. In
short, the study was reported correctly in Nature Magazine; Nature's
press release was inaccurate.
For the past 10 years fertility clinics
have routinely used a genetic diagnostic test in which a single cell is
removed from an embryo at the eight-cell stage to be tested for abnormalities
like Down syndrome. Once the test is completed, the embryo with its remaining
seven cells is implanted in the womb and grows to term. Babies born from
seven-cell embryos have been as healthy as any others.
Dr. Lanza's study could have
been performed using the single cell, thereby allowing for the same result
that has been achieved over the past 10 years. The study was only designed
as a "proof of concept"- Deriving the stem cell lines was the objective
of this study.
I have read articles from Newsweek,
Time, the NY Times, AP, and numerous more obscure right wing web sites
on the issue. Predictably, President Bush's spin doctors had "let's have
our hand selected bioethics experts" response. The US Conference of Catholic
Bishops was also predictably extremely negative on the new science.
The most moderate and sensible review
I read was published in Newsweek and authored by Michael Gerson, former
speech writer and advisor to President Bush. Gerson observes:
A Delicate Balance
Why Bush and science may yet meet in the middle
By Michael Gerson
Newsweek
Sept. 4, 2006 issue - The issue of
stem cells was the first test of the infant Bush administration, pitting
the promise of medical discovery against the protection of developing life
and prompting the president's first speech to the nation. His solution?
funding research on existing stem-cell lines, but not the destruction of
embryos to create new ones was seen as a smart political compromise. In
fact, the president was drawing a bright ethical line. He argued that no
human life should be risked or destroyed for the medical benefit of another.
This was an intentional rejection of the chilly creed of utilitarianism?the
greatest good for the greatest number?because the greatest number would
gain the unrestricted right to extend their lives by ending or exploiting
the lives of the weak..
Now the suggestion that science may
be able to extract usable stem cells from early embryos without destroying
them offers a technological answer to this ethical puzzle, and exposes
some tensions within the pro-life movement.
In the reported experiment, every
embryo was killed to extract their stem cells, a fact not likely to encourage
enthusiasm in the pro-life community. But the growth of viable stem-cell
lines from very early cells raises the prospect that these cells could
be collected in more ethical ways, through existing fertility technologies
that test for disease without ending a life. This method, as it stands,
is still questionable, but it is testable.
And there is another hurdle, written
into law. The Dickey amendment prohibits federal funding for research in
which human embryos are "knowingly subjected to risk of injury or death
greater than that allowed for research on fetuses in utero." Children who
underwent an embryo biopsy during in vitro fertilization (there are, perhaps,
a couple of thousand) don't report genetic problems. But the data on their
health is slight, and the procedure is relatively new. Yet assuming this
technology works, and assuming it doesn't expose the embryo to greater
risk, this approach would pass the standard set by the president, and fulfill
the letter of the law.
It is not, however, likely to meet
the standard of Roman Catholic teaching, and this exposes a division within
the pro-life community. Catholic teaching is not only concerned about harm
to the embryo, it also asserts an unbreakable connection between reproduction,
sexuality and family life, which makes it critical of most fertility technologies,
including IVF. This is not the fight the president has chosen. But it is
fair to say that most pro-life people would view this new technology as
an improvement over the destruction of embryos.
Two conclusions: First, the president's
policy has been useful, giving scientists the time and incentive to pursue
a number of alternatives to the wholesale destruction of embryos. Second,
all this research and debate concerning a small clump of cells is an encouraging
sign that American conscience remains on duty. They reveal an intuition,
even among people who consider themselves pro-choice, that this clump is
different from a hangnail or a tumor. It is genetically distinct, biologically
alive and undeniably human. And when this life ends, like a snowflake in
a warm hand, we know that something irreplaceable has been lost.
Gerson was a speechwriter and
policy adviser to President Bush. He now is a senior fellow at the Council
on Foreign Relations and a NEWSWEEK contributor.
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Here's my message to the readership,
and it's not a moral stance. It's a reality stance. Like it or not, stem
cell research is coming. Fetal stem cell are going to find their way into
therapies in the future. Fetal stem cells have been shown to be far more
robust than the adult version, and the science is simply too important
to those living with currently untreatable diseases.
ACTC will be at the forefront
of developing the science that will lead to a compromise. Reasonable people
on both sides of the debate will be able to live with the compromise. Of
course, you will have extremists with their heads in the sand on both sides.
You can take them out of the equation. Like all great debates, the solution
is somewhere in the middle.
Now let's have a look at this crazy
chart:
The massive two day surge in the
stock price yielded a 400% gain in short order. Then the
negative spin starting coming out. The stock then starting selling off.
When it traded down to about $.95, I thought it was a great entry point.
I suggested a stop loss of $.75 (ssl) for traders. If you have a trading
mentality on this idea, you should be out right now looking to get back
in.
Over the first couple of days the
stock traded as if the market believed the company had solved the ethical
dilemma of fetal stem cell research. They have not. They have taken a first
step and developed some science no one before them has been able to duplicate.
The compromise solution is coming,
and my hope is eventually every stem cell research company will need to
use ACTC's science to remain within ethical guidelines.
I have read most of the coverage
related to the Nature Article, and it's about 80% favorable. Of
course, the 20% unfavorable remains the loudest voice in the short term.
When it comes to the press, it's tough to take on the White House to get
attention.
Technically, I can't make a call
on this one. The stock has finally turned back up, and we are now better
off than we were before the article. Thanks to the volume, the company
will now have another $13 million in its treasury- funded at $.95- much
higher than Friday's close of $.71.
Owning this stock is like owning
an option that doesn't expire. It might never go anywhere, but if the right
factors come together you could be looking at $5, $10, even $20 per share.
Who knows?
The faux pas by the press release
people at Nature has been heaven sent to those looking to own this
stock. The religious zealots pounced on the mistake, calling the whole
study a lie. I'm sure this mistake and negative publicity led in part to
the downturn in the stock. For those not in, here's your chance.
Perhaps we should throw the charts
away for this one, and own the stock with the knowledge that the company
will come under attack from time to time for the worthy goal it is trying
to achieve. This idea is far closer to the beginning than the end. If you
own ACTC, you own a piece of the company closing in on providing
a solution to the ethical debate surrounding fetal stem cell research.
Sure seems like a good use for some high risk capital.
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