LifeCell had moved from a private stem cell bank to a community bank unlike a private bank that is exclusively meant for the use of the baby or its immediate family members
LifeCell International, India’s largest stem cell bank, is trying to diversify into diagnostics and tissue therapeutics after the government imposed certain restrictions on commercial banking of stem cells.
"We have decided that we are not going to remain a cord blood bank alone. Through our cord blood banking business we have access to over 6,000-7,000 gynaecologists," said Ishaan Khanna, CEO of LifeCell, adding: "We decided to change our identity from being just a cord blood bank to a mother and child healthcare company."
In the diagnostics segment, the company specialises in pre-natal and new born child screening using genetics. Khanna said diagnostics is the company's fastest growing segment.
The Chennai-based LifeCell doesn't disclose its sales, but it generates most of its revenue from storing umbilical cord blood (UCB) derived stem cells of new born babies.
It's not just LifeCell that is being forced to look into its business model. The government ban last year forced cord blood banks to rewire their business models.
Based on the recommendations of Indian Council of Medical Research (ICMR), the government in October last year suspended commercial banking of stem cells derived from biological materials such as cord tissue, placenta, tooth extract and menstrual blood. However, it has exempted storage of UCB from the ban order.
In addition to the government ban, there is growing evidence that storing one's own cord blood cells are futile since they cannot be used to cure genetic disorders as the cord blood cells would have the same mutation.
According to the American Society for Blood and Marrow Transplantation, the chance of a baby benefitting from its own cord blood is 0.04 percent to 0.0005 percent.
Rather private stem cell banks, paediatricians and haematologist are advocating that public stem cell banks, led by governments, help patients get a suitable stem cell from a pool of donors.
To stay afloat, cord blood banks like LifeCell have begun tweaking their business models.A community bank
LifeCell had moved from a private stem cell bank to a community bank, which works on the concept of pooling and sharing the preserved stem cells of community members, unlike a private bank that is exclusively meant for the use of the baby or its immediate family members.
"Stem cells therapies are approved for 80 medical conditions. The number of conditions for which you can use your own stem cell are only 8-10. For all the others, you need a stem cell from a donor with a matching HLA (human leukocyte antigen). So all the people who enrol in our community bank will get access to all the samples in the community," Khanna said.
LifeCell said it has a community stem cell bank of 25,000 customers and is ramping up with every passing day. The management said it is considering opening-up its existing private stem cell bank with three lakh customers to the public, but that wouldn't be easy as it needs the consent of parents and approvals from the government.
To diversify, LifeCell acquired controlling stake in Fetomed Laboratories in 2016. Fetomed has developed genetic tests for expectant mothers to check for medical conditions and abnormalities like Down syndrome in a foetus or embryo in early stages of pregnancy. It has also developed gene tests to check for metabolic diseases in a new born. The company recently launched 'RightStart' - the world’s first integrated DNA testing for new-born screening - to detect over 50 medical conditions.
Diagnostics is the fastest growing segment for LifeCell, with a compounded annual growth rate of 36 percent in the last three years.Promise a panaceaThe umbilical cord connects a baby in the womb to its mother to carry oxygen and nutrients. After the child is born, the umbilical cord is clamped and the cord and cord blood are usually thrown in the waste.
Both the cord blood and cord tissue specially are rich sources of stem cells or cells that can self-renew or divide itself into two cells and can adapt to different organs, i.e. a stem cell can function as a simple blood cell, a brain cell or lung cell. Stem cells have found therapeutic usage specially in bone marrow transplant, mostly given to patients with certain blood cancers, while its use for other therapies are still under investigation.
More than a dozen private UCB stem cell banking firms including LifeCell, BabyCell, CordLife India, CryoSave, Cryoviva Biotech, MyCord, among others have made a business by preserving these stem cells. It is estimated that cord blood banking is a Rs 300 crore industry.
Typically, they make an aggressive marketing pitch to expecting parents to store baby's stem cell-rich UCB, claiming that the baby gets protection for life from future diseases as diverse as multiple sclerosis to diabetes and even Alzheimer's disease, charging upwards of Rs 20,000, in addition to an annual maintenance fee of Rs 4,000-5,000.
The world over, large sections of obstetricians and gynaecologists have been against private cord-blood banking for personal use because of limited indications and lack of scientific evidence."A quick back of the envelope calculation means that there might at least be 100,000 stored cord blood samples in these private banks. But what I find very disquieting is there are no success stories about how paediatricians have used these cord stem cells to treat babies with a serious medical problem," said Dr Aniruddha Malpani, an angel investor and an IVF (in vitro fertilisation) specialist in his blog.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.