Skin cells have the ability to regenerate lost hair follicles in mice, according to researchers who said the findings could pave the way for a genetic-based treatment of hair loss.

Scientists at the University of Pennsylvania found that when the skin of mice is wounded, epidermal cells can assume the properties of stem cells that generate hair follicles.

Their findings were published Wednesday in the journal Nature.

While the wounding process brings back less hair than was present, researchers found they could stimulate more or less hair growth through genetic engineering: stimulating or stopping a gene in the mouse to produce different levels of proteins that activate the hair regeneration process.

It was previously thought that adult hair follicles in mammals do not grow back.

The new study also identifies cells that had not been initially associated with hair follicle growth.

The healing process that produces the hair follicles happens naturally after wounding, as nearby epithelial cells assume the properties of follicle stem cells, the scientists discovered.

Stem cells have the ability to transform into a number of other cells, depending on the need. In this case, the new stem cells produce a new hair shaft and progress through all the stages of the hair follicle cycle.

However, the new hairs grown in this way lack pigment, meaning they're white.

The study's lead author, Prof. George Cotsarelis, has co-founded the company Follica, which has licensed technology to develop hair-restoration treatments.

"It's all preliminary at the moment," Cotsarelis told Nature. "If it all went perfectly, then possibly in two to three years we would have a product, but that's very optimistic."