China represents a unique and compelling market for cord blood and tissue banking. First, the Chinese government only supports one cord blood bank within each of the provinces. Specifically, the Chinese government issues one cord blood banking license per province, and the licensed company must function as hybrid “public and private” bank.
The private, for-profit division of the company is expected to fund the company’s public, donation-based division, because no government support is given to support its processing and storage of donated units.
In this article:
- China Cord Blood Corp
- Sanpower Group and Nanjing Cenbest
- Increase in Cord Blood Stock and Market
- Market Penetration Rates in China
- Clinical Trial Activity in China
Cord Blood and Tissue Banking in China
China’s umbilical cord blood banking system is composed of seven banks that have been issued operating licenses from China’s Ministry of Health. In addition, other stem cell banks exist within China, but the term “stem cell bank” is used to indicate that they may store other types of tissues beyond and avoid violation of China’s “one license per province” structure.
China Cord Blood Corp
China Cord Blood Corporation (now Global Cord Blood Corporation) holds the exclusive license for three of the regions and has partial ownership in a 4th province. All of the other companies hold only one license each.
Consequently, Global Cord Blood Corporation controls either exclusive or partial operating rights within regions that account for nearly three-quarters of the annual births within China.
It is also the fastest growing cord blood bank worldwide, according to Mr. Chen Bing Chuen (“Albert”), Chief Financial Officer and Director of the China Cord Blood Corporation.
Sanpower Group and Nanjing Cenbest
In 2016, Sanpower Group and its subsidiary Nanjing Cenbest announced the acquisition of China Cord Blood Corporation (NYSE:CO) and Shandong Cord Blood Bank, positioning it to hold these licenses. According to the company, Sanpower Group has 800,000 cord blood samples stored in China and the associated reserves near 1,200,000 when Cordlife’s reserves across various Southeast Asian countries are included.
This positions Sanpower Group and its subsidiary Nanjing Cenbest as the largest cord blood banking operator not only in China and Southeast Asia, but also the world.
Increase in Cord Blood Stock and Market
Listed on the New York Stock Exchange with a symbol of “CO” (NYSE:CO), Global Cord Blood Corporation is one of the largest cord blood banks worldwide. Over the past year, the stock has reached a high and low of $ 12.25 versus $ 6.01, respectively.
It also has a Price-Earnings (PE) Ratio of approximately 21, which reflects a strong ratio of the company’s stock price to its earnings per share.
Private cord blood banks within any country represent a compelling business model, because they generate recurring revenue from clients and parents are largely unable to move stored cord blood units from one bank to another due to a lack of cooperation between banks.
With respect to Global Cord Blood Corporation, it is the largest cord blood operator within China and has a monopoly within the provinces it serves due to government licensing requirements (one per province). Additionally, the population of China has reached 1.39 billion, which represents 18.1% of the global population of 7.66 billion. This means that China represents one of the largest markets for cord blood banking.
The culture within China also supports cooperation across multiple family generations of the family, including parents and grandparents, to preserve biological assets for newborns to the family. Taken in aggregate, there is compelling evidence to suggest that China will remain a robust market for cord blood banking into the foreseeable future.
Market Penetration Rates in China
China also has unusually high rates of cord blood storage, as compared to other regions of the world. Rates of private cord blood storage can be as high as 7-10% of the population within certain regions. These rates are very unusual because storage rates for private cord blood storage average under 1% on a worldwide basis.
As a point of comparison, the United States represents the most mature cord blood banking market in the world and only 2.6% of U.S. parents privately store cord blood.
From January 2016 onward, the Chinese government also begin allowing two children per family instead of one, providing a major boost for the cord blood banking market within China. Today, the birth rate in China stands at 1.62 children per woman.
China Dominates Cord Tissue Clinical Trial Activity
Interesting, China is the world’s dominant country when it comes to umbilical cord tissue clinical trial activity.
Currently, 57 out of 66 (86%) umbilical cord tissue trials listed on ClinicalTrials.gov are registered to China. In contrast, only one clinical trial involving umbilical cord tissue is underway in the U.S.
See the map below showing clinical trial activity by region. (Search Term: “umbilical cord mesenchymal stem cells”; Date Executed: Nov. 30, 2017).
However, the results flip-flop (invert) when umbilical cord blood banking trials are searched on ClinicalTrials.gov. In this case, only 74 out of 370 clinical trials containing the term “umbilical cord blood” are registered to China (20.0%).
In contrast, 215 are registered within the United States, representing more than half of the total cord blood clinical trials (58.1%).
To learn more about the cord blood banking market, view the “Global Cord Blood Banking Industry Report.”
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1. World Cord Blood Congress Presentation by Mr. Chen Bing Chuen (“Albert”), Chief Financial Officer and Director of China Cord Blood Corporation (CCBC).
2. Xinhongru, P. (2017). Biomedicine_Sanpower Healthcare_Core Industries_The Sanpower Group. [online] En.sanpowergroup.com. Available at: http://en.sanpowergroup.com/content/details_38_1474.html [Accessed 8 Oct. 2017].
3. Clinical trial search executed on ClinicalTrials.gov. Search term: “umbilical cord mesenchymal stem cell“. For reference, 66 results are also returned if ClinicalTrials.gov is searched for the term “umbilical cord mesenchymal stem” or even the shortened phrase “umbilical cord mesenchymal“.
4. Clinical trial search executed on ClinicalTrials.gov. Search Term: “umbilical cord blood“; Search Date: Nov. 30, 2017.
Cade Hildreth had no position in any company mentioned here at the time of publication. BioInformant also has no position in any of the stocks mentioned.