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For years Geron Corp. (GERN) has arguably been recognized as the leader in the development and advancement of embryonic stem cell therapies, but Advanced Cell Technology – a small, California-based company whose stock is trading for about a nickel – announced news on Monday morning that could line this company up as a big player in the field of embryonic stem cell technology.

Advanced Cell Technology has received the green light from US regulatory authorities to commence a study measuring the effectiveness of the company’s embryonic stem cell-based retinal pigment epithelium (RPE) program, which is intended to restore vision for those suffering from severe vision loss.

The trial is due to commence early in 2011.

The ACT authorization is only the second such trial approval by the FDA, the first being Geron’s treatment for spinal cord injuries. Early experimentation of ACT’s RPE program will be geared towards establishing an effective safety profile while treating Stargardt disease, with the intent of expanding treatment to additional vision-loss indications later on down the road.

In addition to the RPE program, Advanced Cell Tech is also holds a developing pipeline of treatments and patents that include the Myoblast program – a treatment for congestive heart failure which has already completed Phase I – and the hemangioblast (HG) program, under development to repair vascular damage.

ACTC has long been followed by VFC’s Stock House as a lower-priced and earlier-staged alternative to GERN. The pipeline is in the very early stages of development, but the potential may be starting to line up with the bigger players in the sector, especially with the green-lighted RPE trial.

The treatments are far from market, but the increased exposure could attract some deep-pocketed partners and additional government money which could minimize the threat of dilutive financing along the developmental path.

With media coverage of this small biotech growing, and with a stock price that trades for a nickel, ACTC is definitely worth noting as a stock to watch. A potential long term gem, in my opinion, with some short term potential as well. As is the case with all speculative penny stocks, however, downside potential exists as well. Keep an eye on ACTC and its developing pipeline.

The recent embryonic trial approval – only the second of its kind, to date – is a huge step forward for this company and the technology.

Disclosure: Long ACTC.

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