Top 4 Cord Blood Companies to Invest In (April 2023)

Collecting Stem Cells Early On

Stem Cells are, together with genomics, one of the most promising paths for new revolutionary treatments. This is something we already partially covered in our article “5 Best Stem Cell Companies to Invest In (April 2023)”.

As we explained then, one key issue with stem cell therapies is to get them in the first place, as they are very rare to non-existent in adults. Many workarounds are being developed, but there is no simple or cheap solution to this problem.

Another issue is that the best treatment will need to use stem cells from the patient himself. Cells from anyone else risk being rejected by the immune system, the same way as organ transplants.

But what if everybody had a stored stockpile of their own stem cells, ready to be used in case of disease or an accident? This is the promise of cord blood storage.

Cord Blood Storing

Cord blood is blood from the umbilical cord, the blood vessels connecting a baby to the mother. This blood in the cord is the baby’s blood and is infused with a lot of stem cells.

This is because babies are created from a bunch of stem cells multiplying and differentiating during the whole pregnancy. These stem cells then fad away in the last stages of  development and after birth.

At birth, the umbilical cord is anyway cut from the baby, so it is really just a matter of preparation for its stem cells’ rich blood to not be lost. This is a perfectly harmless procedure for the baby.

Umbilical cord blood has been used since 1988 for treating deadly and life-wrecking diseases. For example, leukemia, other cancers, blood cell anomalies, immune disorders, and countless rare syndromes.

It is also likely that with new stem cell treatments coming out, cord blood might see its applications growing dramatically with time.

The procedure is remarkably simple, with the stem cells first prepared, and then kept in ultra-cold storage.

The business model is usually to charge an initial fee for the collecting and preparing of the sample, and then a recurring fee to cover the cost of storage. Because of the sunk costs and a very motivated client base, such “subscriptions” tend to be very sticky, with a 95-99% retention rate.

Top 4 Cord Blood Stocks

There are many possibilities for cord blood storage, from public facilities to private companies. We will describe here the publicly-listed companies involved in cord blood collection and storage.

Vita 34 AG (V3V.DE)

A German company, recently merged with the Polish Stem Cell Bank (aka PBKM). It is commercialized under both the names Vita 34 and Famicord.

The company operates all over Europe, with 13 laboratories, and stores 600,000 cord blood and other tissue samples. To collect the samples, it collaborates with 1,300 hospitals. The countries in Europe in which it does not directly operate, like the UK, Sweden, and the Balkans are reached through local partnerships.

The company has registered $63M of revenues in the last 12 months, for a loss of -$11M.

It also has warned “against the backdrop of the tense economic environment”  for 2022 and of some $1.5M in costs for restructuring surplus capacity following the merger with PBKM.

At the same time, harmonization of accounting should increase revenue by$9M which would bring the company back in the green.

Investors in Vita 34 will bet on its dominant position in the European markets, and its capacity to optimize costs now that the expansion phase is slowing down. It is also by far the largest and most liquid cord blood-related stock.

Cellularity (CELU)

The company was formed from a Celgene spin-off in 2017. While not strictly speaking based on cord blood, Cellularity is using a very closed technology, postpartum placenta-derived allogeneic cell therapies. It means they collect cells from the placenta after birth, instead of the umbilical cord. It is similar to autologous cell therapies, notably used by companies like Brainstorm Cell. But placenta cells could prove to be a lot cheaper and easier to scale.

Ideally, Cellularity technology could bring forth the combined advantage of cord blood therapies with the “off-the-shelf” nature of autologous cell therapies. So it could be applied to even people whose parents did not store cord blood at birth.

Cellularity invested $80M in a dedicated manufacturing facility to produce its stem cells, employing 100 people. There it manufactures its commercialized biomaterials products, mostly for surgery and wound care.

Its research clinical pipeline on allogeneic cell therapies is still early, with only three clinical trials in phase 1.

Thanks to its commercialized products, Cellularity is already profitable and rather cheap at 2022-2023’s valuation levels, compared to its recent profits. Investors in the company will want to keep a close eye on the clinical trial results, as well as results from potential competitors’ autologous cell therapies.

Cryo-Cell International, Inc. (CCEL)

The US company is storing more than 500,000 samples from 87 countries.

The company claims Prepa Cyte-CB technology allows for significantly higher levels of stem cell recovery and for more possible treatments if needed. It also insists on the value of storing both cord blood and cord tissues.  It is also collaborating with Duke University for new treatment possibilities.

The company is profitable with a $2.7M net income in 2022, coming from $30M in revenues. Its cash flow is for now limited by investment in machinery and the Duke University agreement, in which the company spent $17M in 2022.

Cryo-Cell is a good match for investors looking for an already profitable and well established cord blood company. It even irregularly distributes dividends like in August 2022, even if none has been scheduled for the foreseeable future.

ThermoGenesis Holdings, Inc. (THMO)

ThemoGenesis is the pioneer in automated systems to harvest cord blood stem cells, since 2006 with the AXP System. Its system collected up to 1 million cord blood units to date.

It is also active in bone marrow collection systems and other cell-sorting technologies.

The company could benefit massively from the development of CAR-T therapies and the overall growing interest in stem cell, cord blood, and placental cell therapies. Its future relies entirely upon such therapies going from niche products and rare treatments to standardized and regular procedures.

The main attraction of the company comes from its technical prowess and leadership in the sector. It also recently invested in a 35,500+ square foot state-of-art facility, expected to generate $10-16M of revenue once fully rented to up to 12 startups in the stem cell field.

Financially, the company has registered a net loss of -$11.2M in 2022, for revenues of $10.5M.

Investors in this stock will need to take into account the regular losses of the company, as well as its frequent money-raising from stock issuance. In the past, this has caused significant dilution and stock price decline.

Nevertheless, if the company would turn profitable from a boom in stem cell activity, it could radically change the market perception of the company and its stock price. So this is more of a high-risk, high-reward bet to capitalize on the growing potential of stem cell therapies.

Further Information

You can read more about stem therapies and publicly-listed companies in this field in our article “5 Best Stem Cell Companies to Invest In (April 2023)“.

You can also learn more about cord blood and its therapeutic potential at the Cord Blood Foundation, which includes a rich database of parents’ guides, service provider lists, etc…

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