This is an interview with James Alexis Mendez, CFO of CryoHoldco, a stem cell bank holding company that is the market leader in Latin America and one of the ten largest stem cell banks in the world.
With more than 130,000 cord blood and tissue samples in storage, CryoHoldco is more than four times larger than any other stem cell bank in Latin America. CryoHoldco owns the cord blood market leaders in both Mexico and Colombia, and plans to expand into other regions of Latin America.
In this interview, we discuss the current and future state of cord blood banking within Latin America, Cryoholdco’s role within this evolving marketplace, and future directions for the company. Enjoy!
Interview with James Alexis Mendez, CFO of CryoHoldco
Question 1: What is your background and how did you get involved with CryoHoldco?
James Alexis Mendez: Prior to joining CryoHoldco as CFO, I was an investment banker and private equity professional in the United States and Latin America for over 10 years. About 5 years ago I became an advisor and Board member of Cryo-Cell Mexico (the largest independent stem cell bank in Latin America) and assisted them in their strategic initiatives —including its recent capitalization by institutional private equity investors.
I became the CFO of CryoHoldco upon the closing of this capitalization event, given my interest in the development and consolidation of the stem cell banking industry in Latin America. We believe that the industry is at an inflection point and that new investments are needed to consolidate the market and increase awareness of the importance of storing stem cell products —with both doctors and expectant parents.
Question 2: What year was CryoHoldco founded and by whom?
James Alexis Mendez: CryoHoldco is a holding company that was formed in 2015 with the purpose of creating the premier stem cell banking company in Latin America. The first asset that was acquired by CryoHoldco was Cryo-Cell Mexico, which was founded in 2002 by local entrepreneurs in Guadalajara, Mexico, after an investigation of stem cell therapies that was prompted by the illness of a family member.
Cryo-Cell Mexico was the first stem cell bank in Latin America. Since investing in Cryo-Cell Mexico in mid 2015, we have been active in the market and have acquired a controlling interest in a regional stem cell bank in Mexico (Q4 of 2015) and have created a JV with a smaller bank that is affiliated and has exclusive access to the leading chain of private hospitals in Mexico (Q1 2016).
Notwithstanding our activity in Mexico, CryoHoldco’s scope and focus is pan regional. This led us to the acquisition of Stem Medicina Regenerativa, the largest stem cell bank in Colombia, earlier this year.
Today, CryoHoldco represents the largest stem cell banking operation in Latin America, with over 130,000 stored samples, two state-of-the art lab and storage facilities in Mexico and Colombia, a growing network of 10,000+ affiliated doctors, and over 100 sales offices across our countries and regions of operation.
Question 3: What services does CryoHoldco offer and when did you begin offering them?
James Alexis Mendez: CryoHoldco offers cord blood and cord tissue collection and storage services.
We began offering cord blood services in 2002 and cord tissue services in late 2013.
CryoHoldco also has a small business storing dental pulp (called Dentcell) and in the future will expand to the storage of additional stem cell products such as adipose tissue.
Question 4: What regions does CryoHoldco serve?
James Alexis Mendez: CryoHoldco currently serves two markets: Mexico and Colombia.
Its companies are the market leaders in their country and offer their services throughout the country. These companies are also the technological leaders in their regions and have provided the most stored samples to patients for transplants (a total of 76 stored samples have been provided to patients across all storage services in their countries).
In Colombia, our team is also a clinical leader in research and transplants, which we hope to replicate in other countries.
Furthermore, we are in active conversations with other stem cell companies in Latin America in order to continue our geographic expansion and reach.
Question 5: How would you describe the cord blood banking market in Latin America? What country in Latin America has the largest market for stem cell storage?
James Alexis Mendez: Cord blood banking in Latin America is a nascent industry, with less than 1% market penetration. This is due to socio-economic factors (primarily lower purchasing power than countries in Europe or the U.S.) and the lack of awareness of the benefits of storing stem cell blood and tissue.
After a period of rapid growth from 2002-2012, where the market grew exponentially and there was a proliferation of blood banks in many countries, the cord blood banking industry is now entering a more mature consolidation phase.
In our view, the market must be consolidated, so the larger companies can increase their investment in technology, state –of- the-art storage facilities, participate in clinical trials, improve operating performance and, most importantly, invest in educational programs with doctors and clients to convey the benefits of storing cord blood and tissue.
Mexico is the largest stem cell market in Latin America with an estimated 150,000 stored samples in 5 stem cell banks.
Brazil is the second largest market with approximately 110,000 stored samples in 15 companies.
Question 6: Who are the largest players (companies) within the Latin America cord blood banking market?
James Alexis Mendez: The largest stem cell banks in Latin America are:
- CryoHoldco with over 130,000 store samples in Mexico and Colombia
- Cryopraxis (Brazil) with approximately 30,000 stored samples
- Matercell (Argentina) and Vidacel (Chile) each with approximately 20,000 stored samples
The data on companies that are not owned by CryoHoldco is based on industry estimates.
Question 7: What have been CryoHoldco’s growth strategies?
James Alexis Mendez: CryoHoldco has several growth strategies that mirror the strategies of industry leaders in other regions. Specifically, our growth strategies include:
(i) continue to consolidate smaller companies beyond our current geographic areas of operation to increase operating efficiencies, merge storage facilities and improve technology;
(ii) actively promote the benefits of cord blood and tissue storage with both doctors and expectant parents;
(iii) participate in clinical research and trials in our markets to develop new therapies and applications using stem cells;
(iv) provide service guarantees – such as a $50,000 medical insurance policy for any storage issues—that increase the confidence in the industry;
(v) launch new services that are related to our core competencies, including adult stem cell storage and maternity banks.
Question 8: What are CryoHoldco’s 5 year goals?
James Alexis Mendez: The five year goals include:
(i) continue to develop a world-class company that is comparable to global industry leaders;
(ii) continue to establish our position as the market leader in the region (Latin America) and, eventually, in each major country within the region;
(iii) continue to promote the industry with all the major constituencies;
(iv) launch new services that follow the advances in stem cell therapies.
Question 9: How can people learn more about CryoHoldco’s companies?
Please feel free to contact me or Paul Savoldelli directly for any further information at:
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