CBA Florida Inc. (fka CBAI)

[MrLong]

Are we collecting blood in China today with a license? I think so.
LAS VEGAS, May 4, 2010 /PRNewswire-FirstCall

"We are in discussions to open a temporary facility in 2010 so we can begin the storage process in an AXM Pharma facility in Shenyang, China... This would mean we would receive revenues from China faster than the 2011 date previously projected." ~ Matt Schissler
http://www.prnewswire.com/news-releases/cord-blood-america-updates-investors-on-china-and-las-vegas-operations-92746834.html

Kansas University (KU) Analysis China Cord vs Cord America:
The report says AXM Pharma has the license to bank blood already. What some investors didn't realize is the KU report is authored by a Grad student residing in China a KU global business class project!

In an effort to become the world’s largest cord blood banking company, Cord Blood America has begun forming relationships with other blood banking companies around the world. They have plans to acquire a controlling share of a profitable (6% profit margin) cord blood banking company in South America and a spun off segment of Vita 34 in Germany (currently not profitable). To break into the Chinese blood banking market, Cord Blood America (CBAI) sought out AXM Pharmaceuticals (AXMP), a leading pharmaceuticals company in mainland China. AXMP also holds a license for blood banking in Shenyang. According to Matthew Shcissler, CEO and cofounder of Cord Blood America, Cord Blood will now serve as a “consultant” to AXM Pharma and as a result of the partnership, CBAI will receive an 8.5% royalty and 10% stake in their operating subsidiary. Matthew Shcissler also serves on the Board of Directors of AXM Pharma.

KU Analysis CBAI vs CCB Pricing:
*Cord Blood America currently charges a $2,075 initial fee along with a $125 yearly fee for its blood banking services. However, we expect the prices to be lower in China and think they will be similar to those of China Cord Blood (732 USD up front, 73 USD/yr).
*((New Corcell Afford-A-Cord is $843 yr 1 unk shipping cost in China. China Cord Blood is $805 yr 1 and $73 annuity therafter - lowered pricing ready for global Corcell Inc!))

KU Analysis CBAI vs CCB Revenue:
If these assumptions hold true, a revenue stream for the AXM blood banking segment and CBAI China segment can be found. To compare the markets of Shenyang, Liaoning to Guangdong and Beijing, Shenyang has a GDP per capita of about $7,500, Guangdong, $5,500, and Beijing, just over $9,000. These numbers have shown correlation to a population’s tendency to spend disposable income on services such as cord blood banking. In its first year, China Cord Blood was able to reach a .98% penetration rate in Guangdong. Therefore, we estimate that AXMP and CBAI could reach 1% of the population in its first year of operation and just over 2% in year two. With a birth rate of 6.89/100 and a population of about 43,000,000, revenue of $2.395 million will result in year one, and $4.49 million in year two, 8.5% ($610,824) of which will contribute to CBAI’s revenue.

KU Analysis Diversify Revenue Streams:
Cord Blood America has made it known in numerous interviews and press releases that they plan to grow revenue in three ways, one of which being “a diversified revenue stream.” In a phone conversation with CBAI’s investor relations, we asked what other revenue streams besides cord blood and placental collection they were looking at and the IR representative (Paul Knopick) only said that there were “numerous different ones” and that CBAI was currently looking into all of them. When asked for any specifics he could not give any. If there truly are many possible revenue streams related to the cord blood collection process like placental collection, they could prove to be an excellent revenue stream especially since the marginal cost would be minimal since the process is already being done. CBAI currently estimate the US placental collection alone could add about 1 million in revenue in 2010 – almost a third of their 2009 revenue numbers.

KU Analysis Conclusion:
The CBAI AXM partnership should have a minimal effect on the operations of China Cord Blood. The fact that both companies are involved in the process makes it difficult and less profitable for CCB to obtain the supposed license through an acquisition due to a lack of synergies with AXM. Although competition is increasing for the release of future licenses’, experience and holding multiple licenses’ puts CCB management in favorable position to obtain others through the application process. Also, CBAI's goal of becoming the largest cord blood banking
company in the world will allocate their resources and expansion efforts outside of China. By focusing on the Chinese market, CCB should continue its success expanding operations locally.
http://www.business.ku.edu/_FileLibrary/PageFile/1712/COIII_Group2.pdf

My question to the board:
If AXM Pharma has always held a license for Liaoning and AXM Pharma is simply applying for another license in a different province. That would account for the PR release in May that storing UCBs at AXM Pharma would occur in 2010 and ramping up even more storage production to begin January 2011 (Additonal Province Licensure granted).

The facility can hold more than 2 million samples... more than one province for its scale seems more in line. Thoughts?
http://www.prnewswire.com/news-releases/cord-blood-america-updates-investors-on-china-and-las-vegas-operations-92746834.html