Within the cord blood industry, there was a strong growth period during the 2000’s. However, over the past few years, the market has substantially matured and consolidated. While strong industry growth continues within North Asia (particularly China, Hong Kong, and Taiwan) and Southeast Asia (led by India and Malaysia), growth of the North American market is flat and the European cord blood banking market is declining.
Cord Blood Industry Mergers and Acquisitions
Over the past five years, the cord blood industry has seen substantial consolidation. One major event was the acquisition of the United States’ largest cord blood, Cord Blood Registry (CBR), by AMAG Pharmaceuticals for $700M in March 2015. Previously, ViaCord had been acquired by the multinational company PerkinElmer in October 2007 for $300M.
Human Longevity Inc. also acquired LifebankUSA from Celgene in January of 2016. Interestingly, Human Longevity, Inc. (HL) was co-founded by J. Craig Venter, who was the first person to sequence the human genome and transfect a cell with a synthetic genome. While HLI is a genomics-based company, it stated in a press release that Lifebank USA’s cord and placental blood and tissue “provide high quality DNA from mother and newborn for genome sequencing.” HLI also planned to offer its newborn genome sequencing product in combination with stem cell banking services.
Other smaller examples of market consolidation were AlphaCord’s acquisition of LifeSource Cryobank in November 2015, which represented its 5th acquisition of smaller cord blood banks, and FamilyCord’s acquisition of Southern Cord in April 2016.
In the most recent and surprising news, Australia’s largest cord blood bank, Cell Care, acquired Canada’s largest cord blood bank, Insception Lifebank in October 2016. Insception’s Founder & Medical Director commented, “Insception is enthusiastic about the growth that bringing Cell Care’s R&D and clinical trial experience to Canada will contribute to its business.”
Additionally, the phenomenon of “holding companies” has recently emerged within the cord blood industry, with companies like CryoHoldco buying up cord blood banks within targeted regions of the world. Specifically, CryoHoldco was created in 2015 with the purpose of forming the premier stem cell banking company in Latin America. It is a stem cell bank holding company that is the market leader in Latin America and one of the largest stem cell banks in the world.
CryoHoldco is about five times larger (5X) than any other stem cell bank in Latin America—with more than 125,000 cord blood samples stored. When cord tissue units are also included, it has more than 130,000 stem cell units in inventory. CryoHoldco has been highly effective at purchasing companies and combining their storage facilities, technologies, and employees to create a more cost-effective workflow.
Interestingly, this era of maturation and consolidation has had as many benefits to surviving cord blood market participants as drawbacks. On average, the remaining market participants are now larger, stronger, better capitalized, and storing larger quantities of cord blood and tissue units than when the market was more fragmented.
Surviving cord blood banks have also been able to diversify into the storage of other types of perinatal cells, including cord tissue-derived mesenchymal stem cells (MSCs), placenta-derived stem cells, menstrual-derived stem cells, and other perinatal tissues. Today, it is appreciated that the birth of a newborn contributes “multiple gifts from the baby” in terms of stem cells that could be valuable for future medical use.
Finally, larger cord blood banks that acquire smaller ones benefit from increasing operating efficiency, merging storage facilities, and increasing their capacity to facilitate cord blood related R&D.