StemCells, Inc. (NASDAQ:STEM) is down 9% this morning after a downgrade from Roth Capital lowered STEM’s price target from $5.00 to $1.80; a “Buy” rating to “Neutral.” Shares experienced impressive gains after reporting preclinical trial results in July, from $0.87 to over $2.00 before receding slightly this month after investors began taking profits. The company develops stem cell-based therapies for central nervous system disorders and liver diseases. In its most recent quarterly update last Wednesday, StemCells reported for the first time net positive income of $1MM, although gains are unlikely to affect the company’s average annual loss of ~$25MM. The company’s products are still far from commercialization and revenue-creation, having just entered early clinical trials, and will only incur greater expenses as studies move forward.
Also in the field of stem cell technology, Pluristem Therapeutics (NASDAQ:PSTI) declined 7% in early trading today, possibly in relation to STEM’s losses. PSTI saw a similar 75% increase since mid-July and investors may be seeing Roth’s downgrade of STEM as a signal to sell this stem cell-based company. Pluristem does, however, have cash and bank notes available that should support development for the next 12 months, possibly into 2014.
To see our earlier coverage of STEM and PSTI, click here.