On June 29, 2015, AMAG Pharmaceuticals released news that reverberated throughout the cord blood banking industry worldwide, announcing that it had entered into a definitive agreement to acquire Cord Blood Registry (CBR®) for $700 million. The acquisition is expected to close during the third-quarter of 2015, based on regulatory approvals and execution of agreed upon terms and conditions.
Direct Participants in the Cord Blood Deal
Founded in 1992 and headquartered in San Bruno, California, Cord Blood Registry® is the largest cord blood bank in the United States and the world. CBR® currently stores over 500,000 preserved cord blood and cord tissue units, which is substantially more than its nearest competitor, ViaCord, which has approximately 350,000 units stored.
CBR®also has alliances with academic institutions that are exploring regenerative medicine applications for cord blood derived stem cells. The company is currently supporting several FDA-regulated clinical trials exploring uses of these cells for addressing autism, pediatric stroke, and cerebral palsy.
Furthermore, CBR® and the U.S. Women’s Health Alliance have had a unique alliance since December 2013, in which they collectively aim to provide quality, relevant information about umbilical stem cell collection to expectant parents across the United States.
This partnership is focused on furthering clinical research by screening for high-risk pregnancies and pre-diagnosed conditions that may be eligible to participate in Cord Blood Registry’s Newborn Possibilities Program®.
Based in Waltham, Massachusetts, AMAG Pharmaceuticals offers a wide range of products focused around maternal health and hematology. Therefore, the acquisition of CBR® is a strategic move to bolster its portfolio of existing maternal health products.
CBR® also brings with it an established network of digital and social networks through which it communicates with pregnant women, as well as a fully-trained sales team that serves leading obstetricians, hospitals, and labor/delivery units, within the United States.
Therefore, these powerful networks may help AMAG Pharmaceuticals to expand its reach of within prenatal and maternal health markets.
Finally, GTCR LLC, a leading private equity firm that holds Cord Blood Registry® as a portfolio company, was central participant within the deal. Based in Chicago, Illinois, GTCR made its initial investment in the Cord Blood Registry® on September 19, 2012, although the amount invested was not made public.
Since the company was founded in 2008, GTCR has invested more than $10 billion in over 200 companies, positioning it a major player in the private equity sector and adding a strong third-party negotiator to the deal-making that occurred between AMAG Pharmaceuticals and CBR®.
GTCR has not announced further funding for CBR® since its initial investment in 2012, which means that the private equity firm accomplished a relatively efficient turn-around time from initial investment to exit strategy.
Market Participants Impacted by the Cord Blood Registry (CBR®) Acquisition
While there were only three direct participants in the deal, the acquisition of CBR® by AMAG Pharmaceuticals is having a substantial effect on the cord blood banking industry, because it is affecting five categories of market participants. These include:
- Cord Blood Registry® and AMAG Pharmaceuticals, the two companies directly involved in the acquisition.
- GTCR, LLC, the private equity firm that holds Cord Blood Registry® as a portfolio company.
- Academic institutions conducting FDA-regulated clinical trials to investigate medical applications for cord blood derived stem cells that are being partially or fully funded by Cord Blood Registry®.
- A range of organizations and companies that have strategic alliances with Cord Blood Registry®, including the U.S. Women’s Health Alliance, among others.
- Other dominant industry competitors in the U.S. cord blood industry, most importantly Viacord (350,000 cord blood and tissue units stored) and Cryo-Cell International (240,000 cord blood and tissue units stored) who will now be competing against a newly organized competitor.
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To learn more, view the “Complete 2015-16 Global Cord Blood Banking Industry Report” now.