NEW YORK (TheStreet) -- Fate Therapeutics (FATE - Get Report) is developing several small molecules that modulate umbilical-cord stem cells. Reni Benjamin, a biotech analyst at Raymond James Financial, said.
The company's shares, which are already up over 40% this year, could head higher in the second half of the year, Benjamin said.
"Umbilical cords are being used more and more in bone-marrow transplants, but there are a lot of problems with umbilical cords, including trying to expand these cells and get them to work really well," he said. "Fate has developed a drug that can now make these cells do better in the human body."
Elsewhere in the regenerative-medicine industry, Benjamin is bullish on Ocata Therapeutics (OCAT), a company in the ophthalmology business, whose stock is down 32% year to date, and he also likes Pluristem (PSTI - Get Report), an Israel-based biotherapeutics company. Shares of Pluristem have fallen 5% so far in 2015, but Benjamin expects a second-half turnaround.
"They now have gotten some very good regulatory feedback from both Europe and Japan that could potentially speed their way to the market for their cell therapies," Benjamin said. "They have a manufacturing plant in Israel which has been FDA (Food and Drug Administration) approved and approved in Europe, significant cash, I think over $50 million, enough to get them through the clinical trials they need to and eventually onto the market."
Another stock Benjamin is positive on is Capricor (CAPR - Get Report), which develops cardiovascular drugs and has a market capitalization of $70 million. The company's shares have been on a wild ride in 2015, surging from $4 a share in January to more than $10 in March on news that the company was moving into the Duchenne Muscular Dystrophy before eventually falling back to where it started.
"This is an adult stem-cell company; they are going after big-ticket items like the cardiovascular space, and the data to date has shown some promise," Benjamin said. "And J&J (Johnson & Johnson (JNJ - Get Report)) actually has option to potentially move forward with the company and the therapeutic if they like the next set of data that comes out, probably sometime next year."