Cordlife, a regional pioneer in cord blood banking, has been in business for around two decades. CEO Tan Poh Lan believes there is still plenty of growth potential, as the company tries to sign up more customers who are more affluent and aware of the uses of cord blood and cord tissue.
Some of Tan’s nieces, for one, have signed up for the services, but she knows there is a bigger addressable market out there. “Personally, I feel there is a lot of scope and potential use for cord blood, cord tissue and stem cells,” says Tan in a recent interview with The Edge Singapore.
To date, Cordlife has serviced over 550,000 parents through its full stem-cell banking facilities that span across Singapore, Hong Kong, Indonesia, India, Malaysia and the Philippines. Cordlife has — through its marketing agents — extended its presence to Myanmar and Vietnam in 2017, and Bangladesh in 2019. It is also present in Thailand through an indirect stake in Thai Stemlife — the nation’s largest cord blood bank — which it holds through a Malaysian subsidiary.
Cordlife operates the largest private cord blood banks in Singapore, the Philippines and Indonesia, and is among the top three market leaders in India and Malaysia. Following its acquisition of Healthbaby Biotech in 2018, the group has also become a market leader in Hong Kong.
Cord blood banking involves the collection at birth, processing, testing, cryopreservation — the preservation of living cells and tissues at low temperatures — and storage of stem cells from umbilical-cord blood. Similarly, cord tissue and cordlining banking involves the collection, processing, testing, cryopreservation and storage of the umbilical cord or tissue lining. The process for cord-lining banking uses patented technology from Singapore-based stem cell technology firm CellResearch Corp via an exclusive licence.
Potential uses for cord blood and cord tissue include the treatment of cerebral palsy and autism. While clinical trials are going on to ascertain if such a treatment can be prescribed, Tan notes that there already are success stories among patients who have banked with Cordlife.
In one instance, a Singaporean boy who had been diagnosed with cerebral palsy when he was three months old saw a gradual improvement in his condition after receiving cord blood infusion at the age of six. In another case, a 10-year-old Malaysian boy suffering from chronic leukaemia got better after receiving a cord-blood stem cell transplant from his younger brother.
Tan explains that the decision to store one’s cord blood or cord tissue is akin to buying insurance. “This is the kind of thing where you never know when you need it. You buy it and hope you never have to use it, but when you need it, it is there,” she explains.
Globally, Cordlife has overseen around 43 autologous transplants, a procedure where the cord blood stem cells are infused into the patient’s own body. These include 19 instances for the treatment of cerebral palsy and 15 cases for autism spectrum disorder. Other ailments that cord blood and cord tissue have been used to treat include transplants, cellular therapy neuroblastoma, brain injury and developmental dyspraxia.
Aside from these, there have been 22 allogeneic transplants where cord blood stem cells banked with Cordlife have been transplanted into a donor’s family member for medical treatment.
Take-up ‘not phenomenal’
The industry has espoused the benefits of storing cord blood and cord tissue. However, Tan admits that the take-up rate “has not been phenomenal”. The current penetration rates in Malaysia, India, the Philippines, Indonesia, Vietnam, Myanmar and Bangladesh are in single digits, while that in Singapore is slightly higher, in double digits.
A possible reason for this is that parents may not deem it as a necessity, and that they are further deterred by higher expenses incurred when they just have a child. While prices vary across countries, Cordlife charges around $6,000 to store a cryo-bag of cord blood for 21 years in Singapore. A child can then decide whether or not to store his or her blood unit after that.
With a growing number of “progressive” middle- and affluent-class individuals across the region, Tan is betting that this will translate to not just more willingness to spend on healthcare in general, but also “huge potential” in demand for what Cordlife is offering.
Meanwhile, the company is taking a targeted approach by trying to educate and win over mothers and mothers-to-be. Cordlife recently launched Moms Up, a mobile app boasting health-related information and resources catering to Asian women who are expecting, planning to conceive, or are mothers to young children. “It is usually the women who make the family’s healthcare decisions,” reasons Tan.
Moms Up is currently available in Singapore, the Philippines, Indonesia and Malaysia, and will soon be rolled out in other markets as well. Tan believes that Cordlife’s involvement in the ecosystem surrounding obstetrics and geriatrics will create a stronger awareness of the brand among prospective clients while increasing touch-points with existing customers.
Extending cryopreservation expertise
Beyond cord blood, cord lining and cord tissue banking, Cordlife has been exploring new growth areas. For instance, it has joined hands with the SingHealth Duke-NUS Academic Medical Centre to test a technology that supposedly expands the number of blood-forming stem cells from stored umbilical cord blood. If successful, the technology will increase the treatment options for patients suffering from blood cancers or blood-related conditions.
On top of this, it has extended its cryopreservation expertise to expanded stem cells in the Philippines as well as lenticules in Singapore. The lenticule is a tiny, disc-shaped piece of corneal tissue in the eye. Called OptiQ, Cordlife’s corneal lenticule banking service allows patients to undergo certain refractive eye surgeries using the lenticule extraction method to treat conditions such as myopia and astigmatism. Launched in April, the technology behind OptiQ was invented by professors from the Singapore Eye Research Institute — the research arm of the Singapore National Eye Centre.
With some 82% of 20-year-olds suffering from myopia in Singapore, it is clearly a problem — and by extension, a potentially big market. The service also cryopreserves patients’ corneal lenticules for the potential treatment of presbyopia and other ocular conditions they may have in the future. Presbyopia is an age-related condition where the eyes gradually lose the ability to focus on objects at close range, typically affecting those above the age of 40.
Cordlife is the first company in Asia to offer such a service. Tan says the move — which marks the company’s first foray in banking another human tissue — is part of a bigger goal for the company to reach out to prospective customers. “We’re not just here to make a quick buck,” she says. Her hope is that women who take up the offer to bank their lenticules may be more willing to bank the cord blood or cord tissue of their child, when the time comes.
Aside from the latest slew of offerings, Cordlife offers a comprehensive suite of diagnostic services for the family, including urine-based newborn metabolic screening, non-invasive prenatal testing, paediatric vision screening and family genetic screening services.
The Covid effect
While Cordlife has been looking at more opportunities, and in turn, more revenue streams, the pandemic has seemingly put a dent on its earnings.
For 1H2021 ended June, the group’s earnings edged down by 5.2% to $2.5 million. On a fully diluted basis, this translates to earnings per share of 0.97 cent, 5.8% lower than the 1.03 cents earned in the previous year. Revenue for the six months dipped by 11.7% to $23.2 million, no thanks to a 17% decrease in the number of new samples processed and stored, from 10,600 in 1H2020 to 8,800 in 1H2021.
Roadblocks came from the tightening of consumers’ purse-strings as well as stagnating birth rates in the markets the group operates in. However, Tan says this may not necessarily be a bad thing for parents — especially those from middle to upper-class backgrounds with higher disposable incomes — who may be more willing to set aside funds for the services that Cordlife offers.
The 1H2021 performance also took a hit from movement restrictions, as samples could not be moved to storage facilities easily. For instance, cord blood and cord tissue collected from Cebu had to be flown to Cordlife’s facility in Singapore instead of the one in Manila due to the restrictions.
In any case, the pandemic has spurred the company to invest more in digital platforms to reach out to consumers through online consultations, webinars and e-enrolments. This was rare before the pandemic, especially in countries other than Singapore where the prospective client preferred to meet consultants in person to ensure that they were legitimate. Going forward, Tan does not rule out the continuation of online promotional activities, especially in countries that tend to experience heavy traffic.
SAC Capital analyst Tracy Lim, commenting on Cordlife’s earnings, cautions “of the uneven recovery trajectory of Cordlife’s key markets, with lower levels of discretionary spending impacting demand for its services”. Other risks she sees in- clude declining birth rates and stiff competition.
However, with a strong net cash position of $73.4 million and zero debt, the company is in a seemingly good stead to see its activities through and explore new opportunities for the rest of the year — and perhaps, also for the longer term.
Year to date, Cordlife’s shares closed down 1.25% at 40.5 cents on Oct 20, valuing the company at $108.35 million.
Cover image of Tan Poh Lan: Cordlife