The cord blood banking industry is a complex industry, with numerous benchmarks that indicate the overall health of the industry, including public and private storage of cord blood and cord tissue units, utilization rates for cord blood, regional and global rates of hematopoietic stem cell transplantation (HSCT), and more.
Benchmarks are critical to assess, because the global cord blood market has matured substantially over the past few years, creating both serious threats and novel opportunities. Therefore, judging individual company performance relative to the broader cord blood marketplace has become substantially more complex.
Serious threats to the cord blood industry include:
• New accreditation requirements that have increased the cost structure of cord blood banks
• Low rates of turnover for stored cord blood units
• Expensive cord blood transplantation procedures, costing from $200-300,000 each
• Difficulty with educating obstetricians about cellular therapies
• A recent decline in cord blood transplants within the U.S. and other geographical regions
• Poor press coverage in many regions worldwide, including by major news outlets
Other uncontrollable factors that could threaten the cord blood industry include new legislation, changes in transplant reimbursement, continually evolving accreditation requirements, the potential for competitive approaches to be shown as more optimal, patent challenges for processing or transplant technologies, changes in public perception of private vs. public banking, shift in policy recommendations by influential medical organizations, changes in government support, and more.
Marketing pressures are also impacting the industry, with the term “cord blood” becoming one of the 20 most expensive search terms on Google. Winning U.S. based search traffic through Google Adwords for the search phrase “Cord Blood” now costs $38.38. When all locations are allowed, the cost for winning search traffic through Google Adwords for the phrase “Cord Blood” is $22.60.
However, there are also emerging opportunities within the cord blood industry, including:
• The potential to expand market size through increasing public awareness
• New clinical trial data supporting applications for hematopoietic stem cells (HSCs) from cord blood and mesenchymal stem cells (MSCs) from cord tissue
• Improving public perception toward stem cell therapies
• Substantial deal-making within the industry, including mergers, acquisitions, and funding rounds
• The potential for cross-organizational collaboration through formation of Cord Blood Industry Associations (occurring in the U.S. and South America)
• A trend toward diversification within the industry, with cord blood banks effectively becoming stem cell banks through the storage of cord blood, cord tissue, and in some cases, placental tissue, amniotic fluid, and more
Within this rapidly evolving ecosystem, those who choose to commit to understanding current opportunities and threats will be positioned for a substantial strategic advantage.
To learn more about this market segment, view the “Complete 2015-16 U.S. Cord Blood Banking Industry Report.”
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