By Brian Nichols
The Nobel Prize is among the most celebrated of awards in history, one that puts recipients in some very exclusive company. Past winners of (one of) the awards include Martin Luther King Jr. (civil rights), Albert Einstein (physics), Sir Alexander Fleming (discovery of penicillin), Hermann Muller (effects of X-ray radiation), and a slew of others including Nelson Mandela and Mother Teresa.
With those recipients in mind, it’s safe to imply that Nobel Prize winners have helped to shape the world as we know it. And although those individuals awarded branch into various industries of focus, I am looking at the most recent winners in Medicine, who are Sir John B. Gurdon and Shinya Yamanaka, and their potential footprint in the healthcare industry.
Both Gurdon & Yamanaka were awarded the Nobel Prize for their findings in cell research. In a study, they found that mature cells can be reprogrammed to become pluripotent. In other words, they discovered that ordinary cells in both mice and humans can be reverted back to an earlier stage, which just so happens to be the stage that is most effective at treating disease.
The theory of harvesting, reverting, and then growing into replacement tissue may be particularly important in the future of medicine. The reason of its importance is because embryonic cells have been proven to be the most efficient cells at treating degenerative diseases. The problem is that no politician or regulator is going to approve a drug that uses human embryos to treat disease, regardless of how many lives it can save. Therefore, a discovery of this degree opens the door for healthcare companies to use these findings to bypass the moral dilemmas that surround the use of human embryos in medical treatments by simply reverting normal cells to an earlier stage.
The Nobel Prize in Medicine has a long and storied history of being transcendent in healthcare. We have seen the discovery of penicillin, radiation in cancer, gene targeting, and the isolation of insulin amongst countless others. Sometimes we see these theories and practices in the marketplace immediately, and sometimes it takes many years to develop; but in regards to Gurdon & Yamanaka, it looks as though their study will be tested on a large scale fairly soon in biotechnology.
One of the leaders in cell therapy, NeoStem Inc. (NYSEAMEX:NBS), is developing a line of products known as VSELs, or very small embryonic-like cells. These cells are rarely mentioned with the company because NeoStem has a revenue-producing manufacturing segment that is growing by 100% year-over-year and because it has a late-stage clinical development segment with AMR-001. In other words, VSELs are under-the-radar. However, these VSELs might be among its most promising assets, and relates to the theory that won Gurdon & Yamanaka the Nobel Prize.
NeoStem’s VSELs are a population of stem cells from adult bone marrow that have been altered to mimic the regenerative properties of embryonic stem cells. In early testing, VSELs formed human bone when implanted into the bone tissue of SCID mice. Not only is the theory of VSELs supported with the Nobel Prize, but the use of mice might also be further validated from the findings of Gurdon & Yamanaka, due to their study showing a direct correlation between mice and humans in cell development. Furthermore, NeoStem’s VSELs are not actually embryonic stem cells, which avoid the prior moral issues associated with the research.
In recent years, stem cell therapies have been proven to be highly effective. Just last year Baxter International Inc. (NYSE:BAX) reached endpoints that were never before seen with the use of its cell therapy. However, the moral dilemmas and potential backlash of using cell therapy in society remains a huge question mark. The findings of Gurdon & Yamanaka will directly address this issue, and strangely enough NeoStem’s decision to develop VSELs was made with moral dilemmas in mind. If VSELs continue to succeed in study, then the findings of Gurdon & Yamanaka could be put to the test in the near future.
Fortunately, we will learn sooner rather than later if Gurdon & Yamanaka were deserving of the Nobel Prize. NeoStem (NBS) is practicing their theories in the development of VSELs and is creating a whole line of products using these theories. In the past we’ve seen findings for penicillin, radiation, X-rays, DNA-sequencing, and the use of insulin treat a multitude of diseases and open new industries in biotechnology. NeoStem is testing its VSELs on bone regeneration, eye diseases, wounds, sciatic nerve regeneration, and radiation exposure. Thus, much like Nobel Prizes of the past, the findings of Gurdon & Yamanaka do not just affect one disease, but rather could become an entirely new industry and revenue stream within the healthcare industry. When you stop to consider this fact, you can see how meaningful the discovery was, to both science and in business.
Brian Nichols is a blogger, author, and investor. Brian studied in the field of psychology and has researched extensively into behavioral finance, which include fear, emotional reaction, and all other emotions and or decisions that are clouded from an investor’s thought process as a result of money making (or losing) decisions. Brian uses his knowledge of psychology as a way to find value in the market and capitalize on the fear and irrational thinking that creates value in fundamentally strong companies. Brian is neither a long or short-term investor but invests with a system that includes selling once certain price targets are reached. The strategy can take weeks, months, and sometimes years but if the company is truly undervalued it will almost always return sizable gains. Brian explains this process in detail in his upcoming book “Taking Charge With Value Investing: How to Choose the Best Investments According to Price, Performance, & Valuation to Build a Winning Portfolio” which will be released in February 2013 by McGraw-Hill.