The move allows federally funded researchers to use hundreds of new embryonic stem cell lines for what remains long-term but very promising research which has the potential to cure a wide variety of conditions, including diabetes, paralysis, Parkinson's disease, and many others.

On a year-to-date basis (YTD), the stem cell index is up 39% on an equal-weight basis, thanks to major gains in many of the smallest companies in the index with the companies listed in the table in descending order by their YTD stock price changes. The stem cell index performance compares favorably to losses of 17.6% for the Healthcare Sector SPDR (XLV), 16.9% for iShares Nasdaq Biotech (IBB), 18.2% for SPDR S&P Biotech (XBI), 19.6% for PowerShares Biotech & Genome (PBE), and 24.5% for the S&P 500 SPDR (SPY).

Osiris Therapeutics (OSIR) has taken over the top position in terms of market cap at $587, with former leader Integra LifeSciences (IART) losing nearly half of its market value on a YTD basis. OSIR formed a major collaboration with Genzyme (GENZ) last October and will report pivotal Phase 3 results during 2Q09 for Prochymal as part of a rolling BLA submission, which will represent the first stem cell product submitted for regulatory approval.

Last Friday, Cytori Therapeutics (CYTX) completed enrollment in the APOLLO trial to evaluate the safety and feasibility of adipose (fat) derived stem cells processed with its Celution System for the treatment of severe heart attacks. No safety issues were raised in the trial and the oversight committee recommended that a pivotal study be conducted to further evaluate efficacy.