While scientists still don't know exactly how the cells aid repair of the different types of injuries, for tendon tears, initial studies show that stem cells appear to help the tissue regenerate without forming scar tissue.

Mountford says that the company chose to focus on tendon injuries in horses in part because they so closely resemble injuries in humans, such as damage to the Achilles tendon and rotator cuff. For both people and horses, tendon tears trigger the formation of scar tissue, which has much less tensile strength and elasticity than a healthy tendon. "It becomes a weak spot and prone to injury," says Owens.

Next year, VetCell plans to start a human clinical trial of its stem-cell treatment for patients with degeneration or damage of the fibers of the Achilles tendon. As in the horse therapy, stem cells will be isolated from a sample of the patient's bone marrow, then cultured and resuspended in a growth medium also derived from the patient. Surgeons will then inject the solution into the area of damage, using ultrasound imaging to guide the needle to the correct location. "Our long-term goal is to use it to treat a number of tendon injuries," says Mountford.

Stem-cell therapies also show promise for arthritis. Vet-Stem, a California-based company that uses stem cells isolated from fat rather than bone marrow, has shown in a placebo-controlled trial that the treatment can help arthritic dogs. "About 200,000 hip replacements are done every year in humans," says Robert Harman, a veterinarian and founder of the company. "That's a very good target for someone to look at cell therapy."

For osteoarthritis, the stem cells seem to work not by regenerating the joint, but by reducing inflammation. "But in the last couple of years, evidence has come out that the cells we use reduce inflammation and pain, and help lubricate the joint," says Harman.

While Vet-Stem does not plan to move into human testing, Cytori, a company based in San Diego, has developed a device for isolating stem cells from fat in the operating room. (Vet-Stem does the procedure manually: veterinarians collect a fat sample from the animal and then send it to the company for processing.) Cytori's device is currently approved for use for reconstructive surgeries in Japan but not yet in the United States.