Hollywood star Michael J Fox may be an unusual posterboy for a revolutionary science but for the actor, who is famously suffering from Parkinson's disease, the research being conducted into stem cells is currently his only hope of finding a cure.

Fox is not alone in his predicament. Along with thousands of sufferers of conditions ranging from Parkinson's to Alzheimer's to diabetes, he is pinning his hopes on one of the most exciting areas of medical research being conducted today.

What makes stem cells so special is their ability to develop into different kinds of tissue making up the human body, such as nerves or muscle. As a result, scientists believe the research could lead to a new era of regenerativeae medicine in which stem cells would offer a way to grow replacement cells oe or even replacement organs oe for transplant into people suffering from diseases like Parkinson's which involve cell damage. News last week that the UK is close to setting up the world's first stem cell bank was hailed by scientists as another step in the right direction, putting Britain firmly in the vanguard of research into stem cells. At the same time, researchers at King's College London claimed to have made stem cells from human embryos grown in the laboratory, the first group of scientists in the country to do so.

But while research into stem cells has been going on since the 1980s, it is only recently that investors have begun to take an active interest in the sector.

In Europe, Britain's ReNeuron became Europe's first listed stem-cell company two years ago when it floated on the Alternative Investment Market. The company is at the forefront of research into neural stem cells, taken from the brains of aborted foetuses, which have the potential to regenerate the brain cells of victims of such debilitating diseases as Parkinson's.

What makes ReNeuron unique is that it has developed a technique that immortalisesae these neural stem cells. Notably, this function is time-sensitive so once these cells enter the human body they stop dividing and mature into neurons.

On the other side of the Atlantic, California-based Geron Corporation is currently the world leader in stem cell research. The company owes its headstart in the industry to its decision to fund research at the University of Wisconsin which led to the successful isolation of stem cells from embryos by James Thomson. Geron was granted a licence to this technology, giving it a competitive edge over its rivals.

Aside from Britain and the US, Australia currently boasts the most active stem cell community. ESI and Stem Cell Sciences in Melbourne and Adelaide-based BresaGen, are all banking that human embryonic stem cell research will pay off.

All three focus on products derived from human or mouse embryonic stem cells and all have research facilities abroad.

President George W Bush threw BresaGen and ESI a much-needed lifeline a year ago when he set down highly restrictive guidelines for embryonic stem cell research. The two companies ended up among only a handful of companies worldwide authorised to supply stem cell lines to researchers who want to access US government funding.

For investors, however, it will be some time yet before any of these companies start to develop commercially-viable treatments that, in turn, will deliver sustainable profits.

A case in point is PPL Therapeutics which famously backed Scottish scientist Ian Wilmut who cloned Dolly the Sheep in 1996. At the time Wilmut's breakthrough sent shares in PPL soaring above 400p but while Dolly has since achieved almost cult status, PPL's performance has been rather less remarkable.

Today, shares in the company are trading at around just 73/4p and its stem cell operations are up for sale. Shares in the other companies involved in the sector have been similarly punished over recent months, while many have also had to resort to cost-cutting.

Following the collapse of its partnership with a pharmaceutical company earlier this summer, Australia's BresaGen, the country's only stem cell company listed on the Stock Exchange, announced a number of job cuts and a pay cut for senior management. In America, Geron has also had to cut numbers, laying off a third of its staff.

With investors beginning to wake up to the risks involved, many of these companies will have to focus on the more mundane business of developing research agents or conducting drug testing for pharmaceutical groups if they are to survive, one industry watcher said.

Executives too concede that it may be some time yet before any cures are available. It's harder than anybody thought, as one said.

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