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Biotech Stock Mailbag: Cytori Therapeutics

Stocks in this article: CYTX BPAX VRTX MRK YMI INCY

BOSTON ( TheStreet) -- I hope everyone will join me at 11 a.m. ET today for the first-ever Biotech Stock Mailbag Live Chat. Check TheStreet's web site for a link when the chat goes live.

I'll answer your questions and respond to your comments in what I hope will be an informative and fun discussion about the current state of the biotech investment sector. The live chat is particularly timely with the ASCO abstract release on Wednesday, so definitely bring your cancer drug stock questions. A reader asked me to throw some biotech stock polls into the live chat, so yes, there will also be polls galore.

This week's email and tweets:

Fred B. asks, "Any comments on Cytori Therapeutics (CYTX) announcement about using fat cells for regeneration."

Yes, let's talk about Cytori again, which is newsworthy after this week's press release concerning another "independent clinical study" (that's Cytori's description) of stem cell-enriched fat grafting in breast reconstruction surgery.

Twenty-three women requiring breast reconstruction surgery underwent a liposuction procedure to remove fat from the abdomen or thighs. The fat was then processed using Cytori's Celution System device, which extracts stem cells that reside naturally in fat tissue. Once the stem cells are extracted and enriched by the Celution device, they are mixed back into the fat. Surgeons inject this stem cell-enriched fat graft into the patients' breasts as part of the reconstruction procedure.

The results of this study, conducted in the U.K., showed that 19 of the 23 women, or 82%, were satisfied with the results of their breast reconstruction. Surgeons were also happy with the results, according to Cytori.

The results in the Cytori press release sound promising, but let's think about this study for a second. What's responsible for causing the satisfaction observed by these patients? Is it the stem cell-enriched fat? Or is it just the fat itself?

It's an important question scientifically and financially. A study proving that "enriched" stem cells help fat-tissue grafts implant better or prevents fat grafts from being reabsorbed into the body would be a significant scientific finding and advance the nascent field of stem cell research.

Such a finding could also be a business boon to Cytori because it would conceivably convince regulators to allow the company to make specific medical claims about the stem cells that pop out the back of its Celution System device. With that kind of regulatory approval, Cytori could sell a lot more Celution System machines and maybe even get insurers to reimburse for the procedures.

Unfortunately, the U.K. study of those 23 women doesn't answer this important question at all because the study fails to compare the efficacy and safety of breast reconstruction surgery using Cytori's expensive stem cell-enriched fat tissue to the same procedure using standard, relatively inexpensive, fat tissue (which by the way, also contains stem cells, just not processed through a machine.)

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