So now that the Obama administration looks set to change the Bush administration's restrictions on stem cell research, is it time to invest in the area? Only with money you can absolutely afford to lose, in my opinion.

There are several reasons for this. For one thing, the administration hasn't acted yet, and a few people who expected immediate action are starting to wonder if that means something unpleasant. But even when the rules change, the effect on the stocks of publicly traded companies is probably going to be mostly psychological. That's because the Bush rules applied only to government funding, a fact that all too many people forget. Private industry has been free to plow right ahead as it sees fit, and it has. Companies like Geron have been working on embryonic stem cells the whole time, with no NIH money involved.

Another thing to remember is that several of the companies in this area work on adult-derived stem cells, rather than embryonic ones. StemCells, Inc. is one such - their stock moves around according to sentiment in this sector, but you have to wonder if many of the people trading it even realize how meaningless the embryonic stem cell restrictions are for the company. (They used to be called CytoTherapeutics, actually, but changed their name in 2000, presumably to take advantage of the publicity).

And finally, there's a really big reason that it might be a bit early to put anything other than your wild-eyed longshot funds into this area: we don't know much about it at all. The signals that regulate stem cell development are only just beginning to be worked out, and we're probably going to have to know a lot more about such things before we can have a reasonable shot at therapies. The recent case of apparent tumor generation from a Russian stem cell therapy attempt (which operation had already shown no benefit, I should add) is one sobering reminder of how ignorant we are in this area. Tissue development is hideously complicated stuff, and the potential for things to go wrong is equally, well, hideous. Primum non nocere applies here good and hard; we're going to have to move carefully to avoid causing all kinds of harm.

That's not welcome news to the patients who need help, or the investors looking for breakthroughs. (And I won't even mention the politicians who like to talk as if those breakthroughs are just about to emerge). But this is the real situation. It looks to be many years before any reliable, useful stem-cell-based therapy appears, and there are going to be a lot of painful episodes along the way. Count on that, and invest carefully.