For both therapeutic and financial reasons, the cord blood industry has been witnessing record levels of M&A activity in recent years, with market leaders gaining market share at the expense of smaller competitors and investors vying for buy-in opportunities. Novel pricing strategies, product cross-sells and upsells, and ingenious online and offline marketing strategies are being implemented by the industry’s market leaders. Meanwhile, new technologies to support ex vivo cord blood expansion are advancing at brisk pace, indicating a promising future for the industry.
Given the operational efficiencies associated with market consolidation, the global cord blood and tissue banking market is being consolidated by a handful of large and well capitalized market competitors.
Controlling a large number of stem cell units is positioning the world’s largest companies at a financial advantage. Specifically, these companies are able to increase their investment in technology, establish state-of-the-art storage facilities, fund clinical trials, improve operating performance, maintain pricing power, and importantly, and invest in educational programs for medical professionals and prospective clients to propel future sales.
Cord Blood Industry Domination
Today, more than 70% of the global cord blood market is controlled by the world’s 12 largest cord blood banking operators. This is a shocking statistic, but true.
At this time, the 12 largest cord blood banking operators are:
- Sanpower Group (controls Global Cord Blood Corporation) – Asia (China)
- Generate Life Sciences (owns Cord Blood Registry in USA, Cell Care international in Australia, and Insception Lifebank and Cells for Life in Canada) – USA
- Cryo-Cell International – USA
- ViaCord – USA
- Cordlife Group – China
- PBKM Famicord – Europe (Poland)
- VcanBio – China
- Lifecell International – India
- Cryoholdco – Latin America
- Medipost (CellTree) – South Korea
- Vita34 – Europe (Germany)
- Future Health (All Global Subsidiaries) – Europe (UK)
Together, these companies control as astounding 5.7 million stem cell units worldwide.
Cord Blood Industry Consolidation
Indeed, massive cord blood industry consolidation has happened in recent years, particularly within the U.S, Europe, Asia, and Latin America.
Important consolidation events within the industry have included:
- Generate Life Sciences aggregating reproductive, newborn stem cell, and genetic services across the U.S., Canada, and Australia
- Cryoholdco aggregating stem cell banking assets within Latin America
- Sanpower Group dominating the Asian market
- Two leading cord blood brands (PBKM FamiCord and Vita34) consolidating the majority of the European market through aggressive M&A activity (and Cryo-Save AG going bankrupt)
India is another critical market that has surged in importance in recent years. This is because the country now boasts an astounding population of 1.4 billion, placing it head-to-head with China as the world’s most populous country. This means that an incredible one-third (36%) of the world’s 7.8 billion people live within India or China. Within India, LifeCell International is the market leader, with approximately 320,000 stem cell units in storage. Within China, Global Cord Blood Corporation (GCBC) controls the market share and is the only operator with multiple provincial licenses.
Within the United States, Generate Life Sciences controls Cord Blood Registry (CBR) and its associated 900,000+ cord blood and tissue units in storage. CBR acquired Natera’s Evercord™ cord blood and tissue banking business in 2019. Generate Life Sciences also acquired cord blood banking assets in Australia (Cell Care) and Canada (Insception Lifebank and Cells for Life) in June 2021. Generate Life Sciences is a portfolio company of the private equity firm, GI Partners. Prior to being acquired, Cell Care had CPE Capital (CPEC) as its the majority investor.
Within Asia, Sanpower Group is the dominant investment force. Headquartered in Nanjing, it is one of the largest private conglomerates in China, with investments across healthcare, retail and financial services. It has preserved over 900,000 cord blood samples in mainland China, and it has over 1.2 million units preserved when its Cordlife reserves within Southeast Asian countries are included. This positions Sanpower Group and its subsidiary Nanjing Cenbest as the largest cord blood banking operator within China and Southeast Asia.
Similar market consolidation and operational efficiency has been pursued within Europe, where the number of cord blood banks has dropped by more than one-third over the past decade, from approximately 150 to less than 100. The industry leaders in the European market include FamiCord Group, who has executed over a dozen M&A transactions in recent years, and Vita34, who has executed a half dozen. Stemlab, the largest cord blood bank in Portugal, also executed three acquisition deals prior to being acquired by FamiCord in August 2018 for $16.5 million. FamiCord is now the leading stem cell bank in Europe and one of the largest worldwide. FamiCord is controlled by Enterprise Investors.
Most recently, FamiCord Group acquired a majority ownership stake (84.2%) in Smart Cells Holdings. Smart Cells is stem cell bank operating across Great Britain, the Middle East, and Hong Kong. FamiCord Group now controls over 610,000 samples belonging to over 450,000 families.
For many years, CryoSave AG was a large cord blood banking operator who controlled several centralized processing facilities in Europe, India, and South Africa. It also operated numerous regional facilities through licensing agreements. But in mid-2019, it entered the bankruptcy process and filed for liquidation. The brand name “CryoSave” and its client database (i.e., its storage contracts and sales database) were acquired by the company, CSG-BIO. Today, Cryo-Save’s umbilical cord blood units are stored by the Polish cord blood bank PBKM, part of the FamiCord network.
Within Latin America, ACON Investments is the major regional investor. It owns Cryoholdco as a portfolio company, which controls at least 9 cord blood and dental pulp assets across the region. Today, Cryoholdco control over 275,000 stem cell units. Headquartered in Washington, DC, ACON Investments is a U.S. based investment fund that manages over $5.3 billion in assets.
Investor Appetite for Cord Blood Businesses
Clearly, investor appetite for cord blood banks has never been stronger. This is because cord blood banks produce stable subscription revenue from long-term storage contracts.
At a fundamental level, cord blood banks are both a real estate play (cryogenic storage facilities) and a regenerative medicine (RM) play. This makes them an appealing cash flow business for investors, private equity groups, and global investment funds to pursue.