Stem cell banking

An interesting article in Real Business magazine, about taking stem
cells from your baby’s placenta and storing them in liquid nitrogen for
up to 25 years, just in case your little fellow needs them for some
childhood diseases:

Stem cell banking

There’s got to be money in stem cell banking
realbusiness.co.uk, October 2007

Forget family heirlooms or inheritance payouts — plan for your
child’s future by freezing their umbilical cord stem cells. But will
the hype be short-lived or is this an industry to be banked on? Melissa
Hancock reports.

Babygros and cuddly toys are so last century. Today, the best
present you can give your newborn baby is a £1,500 set of stem cells.
“It might just save a child’s life,” explains Shamshad Ahmed, CEO and
founder of Smart Cells, a London-based company that collects umbilical
cord blood stem cells that are then frozen in liquid nitrogen and
banked for up to 25 years.

A few years ago, most of the placentas from the 700,000 babies born
each year in the UK were discarded. But freezing cord stem cells is now
being seen as the best way to safeguard your baby’s future.

Stem cells are a unique type of growth cell that have the capacity
to mimic any type of cell in the body. Their main use so far has been
in treating childhood leukaemia and some other cancers, but potentially
these cells could be used to treat diabetes, multiple sclerosis, and
Alzheimer’s, Parkinson’s and cardiovascular diseases. They could also
be used to re-grow body parts, especially through developing
specialised tissue.

The probability of cord blood stem cells being a perfect match for a
sibling is one in four, and this skyrockets for parents and
grandparents.

Smart Cells has banked around 5,000 cord blood cells since its
inception in 2001 and is currently banking “about 600 cells every
month,” says Ahmed, who believes that the industry is just starting to
take off in the UK.

His company’s accounts would certainly suggest so: in 2005, Smart
Cells made £1.2m in turnover with a loss of £300,000; a £2.8m turnover
in 2006 with a profit of about £200,000; and he is expecting a turnover
of £3.8m and a profit of about £0.5m for this year.

Savvy entrepreneurs are fast realising the industry’s commercial
benefits, including Richard Branson, who launched the Virgin Health
Bank in February this year. The scheme received £10m in funding from
Merlin Biosciences, the venture capital fund set up by biotechnology
entrepreneur Sir Christopher Evans.

Wayne Channon, chairman of Brighton-based Cells4Life, is another
entrepreneur who believes it is a growing industry. “I met several
medical people who were eulogising the benefits of stem cell research,
so I decided to invest in Cells4Life in June 2006,” he says.

Cells4Life was founded in 2002 and continues to be managed by two
UK-trained doctors who employ nine staff. The company has banked around
samples to date and sales have grown by 165 per cent since last year,
while the client base has been growing annually by over 100 per cent
since its inception.

However, setting up a private cell bank from scratch isn’t cheap or easy:

“It can cost between £400,000 and £700,000, and I opted for the
latter figure,” says Channon. That figure covers leasing the laboratory
space, buying all the machinery (£250,000 to £300,000), designing the
Standard Operating Procedures (SOPs), and training the staff who have
to be accredited by the Human Tissue Authority, which enforces very
stringent guidelines. “There are also ongoing costs,” adds Channon.
“You have to have completely fail-safe systems so the labs can be
monitored on a 24/7 basis.”

The company offers several packages, including the £1,495 Premium
Service Plan, which covers collection of the cells, processing, testing
and 25 years of pre-paid storage. Smart Cells also charges £1,495 for a
similar all-inclusive 25- year storage package.

“Banking cord stem cells is like putting ‘money in the bank’,” says Ahmed. “It’s the best natural life insurance.” Channon is equally optimistic: “Clinical trials
being carried out at present suggest that stem cell therapy will soon
be used on a daily basis, at which point I think growth in the industry
will go through the roof. Only around 0.5 per cent of the UK population
are currently banking stem cells, and I estimate it will rise to two to
three per cent in five years’ time.”

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