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Investment Is In The Blood For Stem Cell Futurists
MAY 25, 2017 by: David Stevenson

Disorders treated by the technology have increased from 27 in 2005 to 82 today
David Stevenson

© Bloomberg


Where did you store your children’s stem cells? I’m fairly certain that the vast majority of readers were not asked this question when they became parents.

Mothercare vouchers and ear plugs might have been requested, but competitive offers on storing the stem cells derived from a newborn’s umbilical cord blood weren’t high up our family’s wish list. But over the nearly two decades (yes, I’m that old) since my partner and I had kids, something has changed.

Some interesting, very adventurous, investment avenues are opening up in the world of healthcare where I’ve noticed a number of developing trends. There’s the body augmentation brigade (think bionic implants) who cross over with the bodily transcendence movement, grouped loosely around transhumanism and the coming singularity. As Mark O’Connell so brilliantly explores in his wonderful new book To be a Machine, there are a growing number of people who want to transcend their “mortal flesh” by cryogenically freezing themselves.

Speeding along a different track is the revolution in the genomics and biotech industries which is introducing a range of new treatments and testing possibilities. Then there’s the “quantification of the self” movement who are hot on their healthcare measurement apps.

Finally, less prominently perhaps, there are the stem cell entrepreneurs who argue that the rate of scientific progress is speeding up at such a rate that all manner of ailments might be curable in the future if you have harvested and stored those all important newborn stem cells.

The number of diseases and disorders that can be treated by stem cells has increased from 27 in 2005 to 82 today, according to WideCells, a UK company specialising in this research. With stem cell samples capable of lasting 25 years in storage, who knows what diseases could be cured in the next few generations?

For now, stem cell treatments (hematopoietic cells, to be precise) are most likely to be used in the battle against conditions related to blood cancer — leukaemia and aplastic anaemia. But in the not too distant future, we may not need to rely on stem cells harvested at birth. Researchers have already made strides in inducing adult cells to turn into stem cells — something for adventurous investors to bear in mind as they consider the prospects for the following companies.

For now, the industry is focused on umbilical cord blood, collected by a qualified physician in hospital immediately after a baby is born, delivered to a lab and then stored away in a major cord blood banking unit. There are now estimated to be 500 cord blood banks worldwide (there were just 23 in 2004), with 3m cord blood samples.

In the developing world, stem cell services are big — especially in Singapore, South Korea, Hong Kong, China and, rather bizarrely, Greece. And there are a small but growing number of listed businesses tapping into this blood narrative.

Take China Cord Blood Corporation, listed on the New York Stock Exchange under the ticker CO. It’s the first and largest cord blood banking operator in China, with big operations in Beijing, Guangdong and Zhejiang. It has 554,7421 subscribers as of December 31, 2016 — up from 84,000 in 2009, with revenues and ebitda profits growing at a rate of 20 per cent per year.

In China, the costs of using its services include a processing fee of Rmb6,800 (£760) and an annual storage fee of Rmb860 (£100) per year payable for 18 years. Its addressable market is huge: 17.7m babies were born last year in China, where penetration of the market is still under 3 per cent. But in wealthier Singapore, 25 per cent of all pregnancies involve a cord blood sample.

On a side note, China Cord Blood also owns shares in a Singapore operator called Cordlife. Other listed outfits include CryoSave on the Australian Stock Exchange, while back here in Europe, there’s Vita 34 AG which listed on the Frankfurt Stock Exchange in March this year.

There’s even a very young UK entrant into the market, called WideCells Group, which listed late last year on the main market of the London Stock Exchange, with a market cap of £7.5m. Headed by the very young, articulate and energetic João Andrade, it boasts well-known City investors on its register including Miton.

This very early-stage, Manchester-based business has its own, very British take on the stem cell sector, focusing on our national heritage in insurance and education. As well as its own putative blood bank, it has developed an insurance product called Cell Plan which is in effect a healthcare plan for less than £15 a month.




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