(FORTUNE Magazine) – THE DUSTY FLATLANDS of the Texas panhandle seem a world away from society's great debate about human stem cells. But if you want to see how stem cells could transform medicine, a ranch near Dalhart, Texas, is a good place to start. It belongs to Robert Young, patient No. 3 in one of the first U.S. clinical trials of stem cells to fix damaged hearts. The way Young's life has changed suggests that a major advance in treating heart disease is coming--a breakthrough conceivably on a par with the advent of bypass surgery. If so, the era of stem-cell medicine may be upon us much sooner than expected, and long before all the issues surrounding the cells have been settled. (Including whether the recent decision by California voters to pump $3 billion into stem-cell research makes sense.)

Up to this year Young, 68, was fighting a losing battle with a particularly malevolent case of heart disease. His major coronary arteries quickly and repeatedly reclogged after doctors cleared them. Since 1998 he had undergone a quadruple bypass, the implantation of nine tubelike stents to help open his arteries, and more than 24 balloon angioplasties, a procedure in which a catheter is snaked through a thigh artery to unblock vessels that feed the heart. Still Young's heart got worse. In the past few years deteriorating health had forced him to give up raising cattle on his 2,700 acres. By January he was popping up to 15 nitroglycerin pills a day for worsening chest pain, and still couldn't walk much more than 100 yards without being halted by shortness of breath and stabbing angina. Doctors regarded him as out of options.

Or, at least, conventional options. In February, Young flew to Boston to participate in a landmark stem-cell trial headed by cardiologist Douglas Losordo at Caritas St. Elizabeth's Medical Center. The trial involves isolating "adult stem cells" from a patient's blood and implanting them in his or her damaged heart via a procedure akin to an angioplasty. The cells are thought to form new vessels to feed blood to cardiac muscle that is starved for oxygen. (Besides killing muscle, heart disease often leaves areas of injured muscle that are effectively gasping for air. Improved blood supply can revive such areas, boosting the heart's pumping power.) Not every patient in the trial gets the treatment--the hearts of some are injected with a placebo, their own blood serum. The trial is blind, so it won't even be known until the study is completed next year whether Young actually got the therapy.

But he emerged a changed man. Recently he was on the go 14 hours a day overseeing the corn harvest, says his wife, Ruby. When she wasn't looking, he climbed their 100-foot-high grain elevator to inspect the auger. He plays hard too. While dove hunting in South Texas a few months ago in 103-degree heat, he wound up walking more than three miles when his pickup got stuck on a back road. Soon after the treatment, "I stopped having chest pains," he says. "Now I do anything I want." And he has stopped taking the nitro pills.

One seeming miracle proves nothing, of course, and Young's improvement may not last. In fact, heart patients who get placebos in clinical trials often feel better and experience less angina--pain is readily reduced by the placebo effect. But it's hard to believe that Young's remarkable turnaround is all head and no heart. Besides, at least a dozen clinical trials of stem cells for damaged hearts have been launched around the world since 2001, and several have been completed. The results have been largely promising. In a small Brazilian study reported last year, about three-quarters of patients with severe heart disease "had really significant improvement" after stem-cell implants, says cardiologist Emerson Perin of the Texas Heart Institute in Houston, who helped lead the study. "They come in tanned from jogging. There's no way these people would be doing as well as they are" from the placebo effect alone, he says.

Still, the trials have drawn biting critiques from scientists, some of them quite eminent, who think the cardiologists are cowboys rushing stem cells into the clinic too fast. The flurry of trials "may in fact place a group of sick patients at risk," warned a report co-authored by Irving Weissman, a stem-cell pioneer at Stanford University, in the journal Nature last spring.

THE SKEPTICS HAVE a point. Scientists still don't know which kinds of adult stem cells work best in ailing hearts; they don't even know exactly what the cells do when implanted (we'll return to this question). And some red flags have popped up. Patients in a Korean trial suffered accelerated narrowing of coronary arteries seemingly related to a form of the therapy. And in animal studies, researchers have found that infusing stem cells into the heart may cause tiny blood clots or exacerbate inflammation after a heart attack.

Some of the harshest criticism has come from experts on embryonic stem cells, who see the heart treatments as political dynamite. Isolating human ESCs, of course, entails the destruction of early-stage embryos; adult stem cells, like those used in the heart studies, don't raise the religious and ethical issues surrounding ESCs. So the heart studies give ammunition to religious conservatives and other ESC opponents who cite the results as evidence that ESCs aren't needed. That ticks off ESC advocates, who counter that adult stem cells lack the versatility required to make many of the breakthroughs they envision--ESCs can form any of the body's many cell types, promising everything from cures for Parkinson's to lab-grown replacement organs. To date, though, the potential benefits of adult-stem-cell heart therapy seem to outweigh the downsides. "It passes the mother-father test--something you might reasonably recommend to a parent with severe heart disease and no other options," says Toren Finkel, a stem-cell researcher at the National Heart, Lung, and Blood Institute.

Implanting stem cells in the heart is less perilous than it sounds. The process in the Boston trial begins with injections of a drug called Neupogen, made by the biotech giant Amgen, which stimulates a patient's bone marrow to release stem cells into the bloodstream. Then blood is drawn from one of the patient's veins, piped through a machine that uses a centrifuge to extract various cells (including the ones of interest), and circled back into the patient. The extracted cells are winnowed with the help of a system made by Baxter Healthcare, which isolates a small subset called CD34 cells--a kind of stem cell that's capable of forming tiny blood vessels called capillaries as well as various kinds of blood cells. These special cells are stored on ice in thumb-sized test tubes.

Meanwhile, the patient is wheeled into an operating room and sedated--not knocked out--just before a doctor threads a thin catheter through a groin artery into his beating heart. The position of the catheter's metal tip is precisely tracked in three-dimensional space and shown on a video screen using a system made by Johnson & Johnson's Cordis unit. Based on missile-tracking technology developed in Israel, the Cordis system also maps out areas of heart muscle that are "hibernating"--alive but not contracting due to a lack of blood supply. The doctor uses the catheter to inject the CD34 cells into these needy regions. The mapping and injecting process typically takes a couple of hours. Patients are sent home the next day.

Early studies of similar therapies suggest that they may boost cardiac pumping capacity between 5% and 30%. That may not sound impressive, but it often takes only a modest improvement to transform a heart patient's life from painful incapacity to something like normalcy. The number of people whose lives such a therapy might change has soared in recent decades due to the graying of the population. According to the American Heart Association, 13.2 million Americans had been diagnosed with clogged heart arteries in 2001. Meanwhile, 6.8 million suffered from angina, and five million had spiraled into heart failure, in which a progressively weakening heart can't pump enough blood, causing fatigue, swollen lower legs, and shortness of breath.

FOR A HEART FIX with such huge promise, the new therapy has garnered surprisingly little commercial interest. That's largely because its primary therapeutic stuff at this point is patients' own cells rather than a patentable drug or medical device. Further, the treatment can be performed with equipment already in wide use. Still, cardiovascular device makers like Baxter, Cordis, and Boston Scientific are helping to sponsor research on the new therapy in hopes of expanding product sales.

Several smaller companies are selling or developing related products as well. Miltenyi Biotec, near Cologne, Germany, offers materials and devices to isolate stem cells used in heart studies. Gamida-Cell in Jerusalem is developing products to foster growth of adult stem cells outside the body before implantation in patients' hearts. Anormed in Vancouver is developing a drug that, like Amgen's Neupogen, induces stem cells to move from the bone marrow into the bloodstream. And at least two biotech firms, Osiris Therapeutics in Baltimore and Angioblast Systems in New York City, are focusing on cardiac applications of "mesenchymal cells" (pronounced mess-EN-ki-mal), especially versatile stem cells found in bone marrow. That may turn out to be the stem-cell field's first blockbuster--read on.

For now the main players in the potentially explosive market for the stem-cell therapies are likely to be physicians. No wonder so many of them have rushed in recent years to join the global race to extract stem cells from blood or bone marrow and relocate them in concentrated form in patients' damaged hearts. The race began with pioneering studies in Boston and elsewhere in the late 1990s, which suggested that adult stem cells could help damaged heart muscle develop new capillaries. Then, in 2000, a group led by Piero Anversa at New York Medical College in Valhalla reported a mouse study that suggested adult stem cells from bone marrow could regenerate damaged heart muscle. Suddenly it seemed that stem-cell implants might not only boost blood flow, as had earlier been thought--they might also actually rebuild hurt hearts.

Within months, three teams of German doctors--at the universities of Düsseldorf, Frankfurt, and Hanover--launched a wave of clinical trials of stem cells for ailing hearts. Other trials followed, including ones by groups in China, Korea, Brazil, and during the past year, the U.S.--besides Boston's Dr. Losordo, physicians at the Texas Heart Institute and Columbia University have launched human studies.

Hopes for the therapy sagged somewhat last spring when Nature published two mouse studies, including one co-authored by Weissman, Stanford's prominent stem-cell researcher, contradicting the idea that the adult-cell implants can build heart muscle. But more recent studies have supported the muscle-forming theory, including ones reported at November's annual meeting of the American Heart Association.

At first glance, the squabble over how stem cells do their heartening thing seems academic--what really matters, of course, is the benefit to patients regardless of the mechanism. But realizing the therapy's full benefits will require resolution of burning issues: Which cells to use? How and when is it best to implant them? What kinds of heart patients are the best candidates? Answers are unlikely until stem-cell practitioners get a better handle on what they're actually doing to patients.

At this point, scientists generally agree that CD34 and related bone-marrow cells can improve blood flow in oxygen-starved heart muscle. That may be what helps patients like Young. But the details are unclear. The cells may morph into capillaries, or perhaps into both capillaries and muscle. Or they may emit chemical signals that induce healing. Or maybe all of the above. The signaling possibility is especially intriguing in light of recent studies suggesting that the heart contains its own supply of muscle-forming "cardiac stem cells." Such cells might be energized to move into damaged areas and regenerate lost tissue after getting a chemical SOS from implanted stem cells.

The idea that stem cells send out healing signals is supported by recent animal studies at Columbia University, says cardiac physician Silviu Itescu, a leading stem-cell researcher at the school. His team induced heart attacks in rats, then implanted a type of human stem cell called mesenchymal precursors to treat the damage. The cells quickly disappeared, yet new blood vessels and muscle cells formed anyway. "Even if the mesenchymal precursors are gone in 48 hours," Itescu says, "we get dramatic induction of new heart muscle" and arteries. The cells, it seems, left behind repair instructions that other cells followed to the letter. The implants also generated larger blood vessels than the capillaries seeded by CD34 cells. "If forming small capillaries can improve heart function, think what larger arteries could do," adds Itescu.

Itescu's enthusiasm has a commercial side: He's co-founder of Angioblast Systems, a biotech focused on mesenchymal precursor cells. Those cells--which can give rise to cartilage, bone, fat, and muscle--have another plus besides great versatility: They promise "off-the-shelf" cellular medicines, so that cells for each treatment don't have to be extracted from the patient. That's because mesenchymal precursors transplanted from one person to another don't trigger a rapid rejection by the recipient's immune system, unlike other kinds of transplanted cells. Mesenchymal precursors obtained from a single bone-marrow donor might be propagated in the lab to generate hundreds of doses to implant in heart patients. That, in turn, might make stem-cell heart repairs as routine as angioplasties, which are often done on an outpatient basis.

The Columbia team plans to test mesenchymal implants in gravely ill heart-transplant candidates. "Maybe [after stem-cell implants] they won't need heart transplants," says Itescu.

Another mesenchymal-cell trial in heart patients, expected to begin soon at Johns Hopkins University, will be sponsored by Osiris in partnership with Boston Scientific. It will test the ability of stem cells intravenously infused right after a heart attack to damp down inflammation that scars and weakens cardiac muscle--the cells are expected to home in on a patient's cardiac-injury site; hence, they won't need to be delivered directly into the heart via a catheter. In an animal study paving the way for the trial, Johns Hopkins researchers found that implanting mesenchymal stem cells in pigs after induced heart attacks blocked cardiac deterioration and left the animals' damaged hearts in near-original condition.

A SLEW OF RELATED therapies are at earlier stages of development, such as genetically tweaking adult stem cells to make them extra-long-lived after implantation, potentially boosting their healing power. Another idea in the works: Extracting cardiac stem cells from biopsies taken during coronary bypass surgery, multiplying the cells outside the body, and then reimplanting them to regenerate lost heart muscle.

How soon might any of this be widely available? It wouldn't be "overly optimistic" to expect FDA approval for general use of the first stem-cell therapies for the heart within three years, says Boston's Dr. Losordo. As researchers optimize the treatments, he adds, "I have no doubt that heart transplants will become a thing of the past. The specter of having a heart attack will also become a lot less ominous." One guy who is already worrying less is Robert Young, the rancher. He recently built a deck for his family's getaway at 8,500 feet in the Colorado Rockies.