BOSTON (TheStreet) -- Welcome to the Biotech Stock Mailbag: Memorial Day 2010 edition.
Preston M. kicks things off, asking, "Adam, I appreciate your critical eye when it comes to evaluating drug stocks. What do you think of Neostem (NBS), which seems to be doing quite well these days and is generating a lot of buzz? Thanks."
To learn about Neostem -- and to understand why I'd be wary about sinking investment dollars into the company -- read Neostem's most recent 10-K annual report filed with the Securities and Exchange Commission. Read the SEC filing first -- before you visit Neostem's web site, before you read the company's press releases, and before you visit the stock message boards.
Neostem runs a money-losing adult stem cell collection business. Basically, this service harvests stem cells from the blood of healthy adults and stores them for later personal medical use. Think of this business as a cord-blood bank for adults -- except smaller and less successful. Outside of bone marrow/stem cell transplants for blood cancers, there are no approved medical uses for adult stem cells. No one has yet figured out a way to trick adult stems cells into growing new heart tissue or curing diabetes. Adult stem cells aren't remotely close to stopping Alzheimer's or Parkinson's disease.Accordingly, Neostem generated only $178,400 in revenue from the stem-cell banking business in 2009, according to its annual report.
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