Shares of Geron (GERN) are soaring today by more than 40% on FDA approval to begin human clinical testing this summer for an embryonic stem cell treatment for spinal cord injuries. The approval comes just days after the new administration took office, breathing new life into related companies such as StemCells (STEM), Aastrom Biosciences (ASTM), and others tracked in the ETF Innovators Cosmetic & Reconstructive Medicine Index.
This index and new ETF idea represents a first-to-market idea to provide investors with an exchange-traded product to invest in a basket of regenerative medicine and stem cell companies such as Osiris (OSIR), Genzyme (GENZ), Cytori Therapeutics (CYTX), Mesoblast (MBLTY), Integra LifeSciences (IART), and Kinetic Concepts (KCI) (LifeCell acquisition). The index includes 79 companies engaged in cosmetic medicine, regenerative medicine + stem cells, orthopedic repair, joint replacements, and cardiovascular (heart + blood vessels) treatments.
As a semi-active ETF idea, this product would be rebalanced each month to select the top 35 rated companies with market caps over $100M as equally-weighted active components based on a variety of factors, including market cap weighting, revenue weighting, historical stock price return, and others.
The accompanying table (click to enlarge) includes the top seven rated regenerative medicine + stem cell companies and full index statistics over the past year, with favorable results compared to the Healthcare Sector SPDR (XLV), iShares Nasdaq Biotech (IBB), SPDR S&P Biotech (XBI), and S&P 500 SPDR (SPY). Other favorable trends for this index include a bias toward small/mid-cap companies, making them takeover targets – as evidenced by the Johnson & Johnson (JNJ) buyout of breast implant maker and former index component Mentor.
