High Hopes in Animal Models, but Far from Sufficient for STEM

Stemcells, Inc (NASDAQ:STEM) is up 27% premarket on preclinical data showing improved memory and synaptic function in two animal models after transplantation of the company’s proprietary human neural stem cells into the brain. With hopes of a future Alzheimer’s treatment, the company says, “The hippocampus is critically important to the control of memory and is severely impacted by the pathology of AD. Specifically, hippocampal synaptic density is reduced in AD and correlates with memory loss.” STEM faced a 1:10 reverse split last year and multiple stock offerings, pointing to a troubled balance sheet with a high cash burn. First quarter losses outweigh current assets for the company, and although the announcement comes as good news for STEM, it looks as though they will need to raise capital soon. Though nowhere near their $4.50 52-Week high, today’s premarket $1.13 is the stock’s highest since December.