Stem cells and dermal papilla cells have been discovered in hair follicles and some researchers predict research on these follicular cells may lead to successes in treating baldness through hair multiplication, also called hair cloning. This treatment is expected to initially work through harvesting such cells from existing follicles, multiplying them in cultures, and injecting or implanting groups of cells into the scalp. Later treatments may be able to simply signal follicle stem cells to transmit chemical signals to nearby follicle cells which have shrunk during the aging process, which respond to these signals by regenerating and once again making healthy hair.

Unfortunately, this new approach to treating baldness appears to be taking longer than expected. The first products are now expected to hit the market in 2009/2010. However, it remains unclear how effective they are going to be. It has been suggested that only future generations of HM will allow patients to grow as much hair as they want.

HM is being developed by two independent companies: ARI (Aderans Research Institute, a Japanese owned company in the USA) and Intercytex, a company in Manchester (UK).

On October 2006, UK biotechnology firm Intercytex announced they have successfully tested a method of removing hair follicles from the back of the neck, multiplying them and then reimplanting the cells into the scalp. The initial testing resulted in 70% of male patients regrowing hair. This treatment method is expected to be available to the public by 2009 . On October 6, 2006, the company was awarded a £1.85 million ($3.63 million) grant by the UK Department of Trade and Industry (DTI) through the Technology Programme to develop an automated manufacturing process for ICX-TRC, Intercytex’s novel hair regeneration therapy. The grant will be used primarily to develop a dedicated robotic system to support the commercial-scale production of dermal papilla (DP) cells, the main cells involved in hair regeneration and the key component of ICX-TRC. Preliminary reports of efficacy of ICX-TRC in hair restoration are expected in fall of 2007.

In January 2007, Italian stem-cell researchers say they've come up with a new technique for curing baldness. Pierluigi Santi of a Genoa clinic said stem cells could be used to "multiply" hair roots. He said the clinic would be ready to perform its first hair transplants on priority patients - those who have lost their hair in fires or other accidents - within a few months. After that, he said, "we'll open our doors to paying customers". Santi's approach works by splitting roots and growing new follicles.

In May 2007, U.S. company Follica Inc, announced they have licensed technology from the University of Pennsylvania which can regenerate hair follicles by reawakening genes which were once active only in the embryo stage of human development.