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8.1.Porter’s Five Forces Analysis
8.2.Company Profiles REPORT HIGHLIGHTS
The global market for stem cell products was $3.8 billion in 2011. This market is expected to reach nearly $4.3 billion in 2012 and $6.6 billion by 2016, increasing at a compound annual growth rate (CAGR) of 11.7% from 2011 to 2016. The American market for stem cell products was $1.3 billion in 2011. This sector is expected to rise at a CAGR of 11.5% and reach nearl y $2.3 billion by 2016. The European market for stem cell products was $872 million in 2011 and is expected to reach nearly $1.5 billion by 2016, a CAGR of 10.9%.
SUMMARY FIGURE GLOBAL STEM CELL MARKET AND FORECASTS, 2010-2016 ($ MILLIONS)
Source: BCC Research
http://www.ibisworld.com/industry/human-stem-cell-banks.html
Banking on Stem Cells
With more than six private players emerging in stem cell banking and public stem cell banking also taking off, the stem cell market is poised to explode. Sonal Shukla analyses the future potential of the stem cell banking market Stem cells were in the limelight when recently US President Barak Obama lifted an eight-year-old ban on Government-supported funding for embryonic stem cell research, opening floodgates for millions of dollars in research. In the Indian research turf too, stem cell banking is gaining momentum. "In India the industry put-together has banked about 25,000 cord blood units over the last three years. This number is set to increase substantially with increased market reach and awareness, increase in regulatory approvals for stem cells based products and
lowered resistance to private banking will together encourage more clients to choose stem cell banking," shares Mayur Abhaya, President and Executive Director, Lifecell International. India: A Growing Potential With more than 80,000 births a day or 26 million births a year, India is poised to be the largest source for umbilical cord blood in the world. It's no surprise then that leading stem cell banking companies are keenly eyeing India. The investments are considerable and mostly run into millions of dollars. Analysts estimate that Indian stem cell banks, which is currently at Rs 100 crore, would generate Rs 2,700 crore in revenues by 2012, accounting for 17 per cent of the world market. "Companies with foreign funding are entering the market and are planning to capture at least 21 per cent of the total market," states Dr Jyothsna Rao, MD, Cryostemcell Karnataka, Bangalore. As of now, there are more than six players in this five-year-old market. Most of these cord blood banking companies are having an overseas parent company which is responsible for the initial investment. The Players
Cryobanks International India plans to increase to 250 plus towns
Lifecell now has 40 collection centres across Asia
Cryo Stemcell Karnataka thrives on making therapeutics as the future for stem cell banking
Leading private players in area of cord blood banking are Lifecell International, Cryobanks International India, Cryo Stemcell Karnataka, Reliance Life Sciences, Cordlife Sciences India and Cryo-Save India. This segment also includes nominal presence of public cord blood banks like Jeevan Stem Cell Blood Bank which is a not-for-profit stem cell bank. Lifecell, launched in November 2004 through a technology tie-up with Cryo-Cell International (CCI) US, was one of the first entrants in the Indian cord blood banking segment and therefore is said to be the biggest umblilical cord blood banking company in India. Lifecell made use of its first mover advantage and has created a customer base of 13,000 parents. Another homegrown venture that emerged in the early days of stem cell banking in India was Cryo Stemcell Karnataka. Started around five years ago by Dr SGA Rao, this company thrives on making SRMC, Chennai in association with Lifecell therapeutics as the future for stem cell banking. The has formed the therapy centre TRICell company treated over 60 patients for Beurger's disease (limb ischemia), with adult stem cells. On similar lines, it has completed trials on spinal cord injury, chronic liver failure, myocardial infraction and osteoarthritis. Cryobanks International India, started in 2006, is a joint venture between Cryobanks International, a US body, and RJ Corporation headed by Ravi Jaipuria. The company invested Rs one billion to build the seven repositories in metro cities.
Narayana Health City, Bangaluru also recently came up with a public stem cell bank
Cordlife Limited, a Singapore-based cord blood banking group, recently entered this segment opening the first cord life facility in India, with a storage capacity of up to 1,50,000 cord blood units. This unit has been set up at Bishnupur area on the outskirts of Kolkata. The company plans to invest Rs 300 million in 18-24 months to set-up similar facilities across India. Another European stem cell banking company, Cryo-Save launched its operation in India in December 2008. The company has set 10 stem cell storage banks in the country at a cost of Rs 10 million. Marketing the Concept Amongst the six existent players, Lifecell and Reliance Biotech both have partners with experience in pharma industry. These companies have established a sales force wherein trained medical representatives visit the prospective client's home and explain the concept, collection and processing, and provide confidence on the storage facilities. "They are aware of the fact that in India if any medical concept has to be rolled out, the doctors have to be taken into the loop. Therefore, private players have set up a marketing and sales force structure which is just like a pharma company that gets in touch with the obstetrician, gynaecologist on regular basis and get pregnant patient population from them," says Rena Shukla Ahuja, Industry Analyst, South Asia & Middle East Healthcare, Frost & Sullivan. The smaller companies are making some headway in creating infrastructure through private funding. There are companies who are directly approaching prospective customers for concept selling. Cryobanks International India has been following a model of increasing direct client and doctor awareness. "For the same, we are offering our services in more than 75 towns, which we plan to increase to 250 plus towns. We are also conveying information on the concept through advertisements, advertorials in magazines and papers. Further, we conduct direct mass outreach programmes which are aimed at increasing mass awareness about stem cells," shares Dr CV Nerikar, CEO,
Cryobanks International India. The company has also on offer the public banking services to its clients who wish to bank their stem cells in public banks and intends to cater to all towns with population of more than a lakh in the coming three years. "New product services can be storage of cord lining and cells from placenta, to name a few. These products can be collected at the time of birth and is easy to target the same customer for more additional business," states V R Chandra Mouli, Managing Director, Cryo-Save India. Expanding Wings The investments from the cord blood banks in India are mainly focused on the facility building, technology development fees and its day-to-day operations. The industry is expecting at least 10 more new players in the next few years including global players who are keen to leverage the India opportunity. With everyday advancements in stem cell technology from the research and clinical perspective, stem cells do promise a healthy future for the coming generations in India. Another phase in stem cell banking is about to begin with companies launching new banking services (like collection of stem cells from menstrual blood, cord tissue, and adipose tissue). This will increase the customer base significantly as this opportunity is not restricted to expectant parents alone. "Storage of stem cells from adipose tissues will be a new service with a new target and so a new strategy has to be developed," says Chandra Mouli of Cryo-Save India. Cryo-Save India has plans to offer more value added services like cord and stem cells from adipose tissues besides offering the elementary service of cord blood banking. It has just started its test marketing of cryo-cord service in India. "Menstrual blood contains extremely large number of mesenchymal stem cells and several thousand fold high concentration of stem cell growth factors. Because of these properties research has shown that these menstrual cells multiply rapidly and can also form other types of specialiesd cells including those of the heart, nerve, bone, cartilage and fat," shares Abhaya. Lifecell, which now has 40 collection centres across Asia and currently offers services such as cord blood banking and cord-tissue banking, is soon planning to launch the service of menstrual stem cell banking in India. Very recently, the company opened its R&D facility in Chennai exclusively for stem cell research and has also launched a new service- umbilical cord tissue banking which is open to all centres in India. Cost Dynamics
"Companies with foreign funding are planning to capture at least 21 per cent of the total market"
- Dr Jyothsna Rao
MD Cryostemcell Karnataka
Every year out of around 26 million births in India, 6,00,000 are potential clients, given the pricing of approximately Rs 79,000 per umbilical cord banked for 21 years. In recent times, companies are driving the prices to almost 50 per cent of the initial cost, forcing other companies to match the price. "Markets have been reduced to bargaining battlegrounds controlled by the aspirations of marketing personnel, who are looking to maximise their role in this drive, often resulting in giving the client 'biased banking' solutions options," says Dr Rao of Cryo Stemcell Karnataka.
"Banking would naturally increase if reductions in prices are made for banking"
- Dr C V Nerikar CEO Cryobanks International India "We can tap market potential by awareness campaign & customised marketing plan"
Private players are now increasingly offering EMI schemes of payments to help clients choose better and easier payment options for banking. Lifecell provides its services - Dr Prem Anand Nagaraja in two packages. With Lifecell's 'Baby Cord' plan, the Director-Operations interested parents can enroll and store their baby's cord Rotary Narayana Tissue Bank & blood stem cells and cord tissue for 21 years by paying Rs Stem Cell Research Centre 3,500 as a monthly EMI for two years. Other options available are one-time storage fee of Rs 79,000 or initial processing fee of Rs 44,600 with an annual storage fee of Rs 3500. CordLife Sciences India offers private banking for an initial upfront fee of Rs 38,000 and subsequent annual storage fees of Rs 3,600. The critical factor which is affecting business in the field of stem cell banking is the cost of processing and storing the stem cells. The process involves usage and procurement of items not manufactured in the country (so a huge amount is paid in duties and taxes) and this increases the cost of the process significantly. "Banking would naturally increase if reductions in prices are made for banking," shares Dr Nerikar. Agrees Ahuja of Frost & Sullivan, "Stem cell banking is hugely capex intensive and is in itself an entry barrier.” Hospital Benefits Stem cells are being researched upon globally and there are exciting prospects of their usage in future. Hospitals naturally are interested in providing these facilities to their clients as the awareness of the concept is catching on. Today, stem cell-enriched cord blood is used as a therapy for the treatment of diseases such as cancer, Parkinson's, Alzheimer's, spinal injuries, thalassemia, leukaemia and sickle cell anaemia and is an adjunct therapy for aggressive chemotherapy. Many hospitals like Sri Ramachandra Medical College, Chennai in association with Lifecell has formed the therapy centre TRICell. It has been set-up as a state-of-the-art therapeutics facility to provide clinical applications through stem cell therapy. Recently, StemCyte Inc, United States, joined hands with Apollo Hospitals Enterprise Limited and Cadila Pharmaceuticals Limited to set up a hybrid public and private umbilical cord blood stem cell bank and research institute — Stemcyte India Therapeutics in Ahmedabad. The company plans to build an inventory of approximately 25,000 ethnically diverse umbilical cord blood units to help treat critically ill patients in India and around the world. Experts believe that cord blood banking is a huge business opportunity for hospitals. According to experts, hospitals are in a good state to start a cord blood bank. Right now, there are almost 30 hospitals partnering with Lifecell. Stem cell banking companies are making use of ready customer-base by tying up with hospitals, medical institutes, research institutions and biotechnology companies to aid in stem cell research. For hospitals, this partnership is synergistic in nature since the hospital would promote cord
blood banking leading to additional revenue per new born delivered. "The hospitals themselves can start this kind of a business as gynaecology is the basic service any hospital provides and it is also a cash-rich department. However, the hindrance is the lack of law in this area and hospitals fear getting trapped into any medico-legal hassles," shares Ahuja Shukla. Many of the stem-cell banking companies have also been focusing on stem cell therapy centres. Cordlife Sciences India which provides stem cells processing and storage services to the end-consumers intends to work with stem cell therapy centres to enable cellular therapies within India. "We are planning for strategic tie-ups with hospitals in India to reach out to more expectant parents and educate them about cord blood banking. We are also in the midst of identifying local partners whom we can work with to link the technologies developed by our partners from abroad," shares Meghnath Roy Chowdhury, MD, Cordlife Sciences India. Public v/s Private — Will it Survive?
"More families will opt for cord blood banking as they get to know and witness what cord blood stem cells can do" - Meghnath Roy
Chowdhury MD Cordlife Sciences India
Even though it is a well-known concept in the Western world, public cord blood banking has just taken off in India a few months ago. Chennai-based Jeevan Stem Cell Bank has launched public banking service recently. Jeevan Stem Cell Bank is a unit of Jeevan Blood Bank and Research Centre, a 14 year old not for profit organisation. Bangaluru-based Narayana Health City also recently came up with a public stem cell bank named the Rotary Narayana Tissue Bank and Stem Cell Research Centre.
"Stem cell banking is hugely capex intensive and is in itself an entry barrier"
Public stem cell banking is different from private stem cell banking in the fact that the client does not need to pay for the banking and that the right of the sample is not with the client which is so in private banking. Moreover, there is a raging debate on whether public stem cell banking as a concept will survive on the Indian healthcare grounds in the - Rena Shukla Ahuja long run. "Without hesitation I will state that the need of Industry Analyst South Asia & Middle East Healthcare the hour is public stem cell banking which any one who Frost & Sullivan needs transplant can access. Possibility of use of stored stem cells within the family or by the same child is very limited. When one donates the cord blood to a public bank, the donor need not make any payment and the processing cost is met by the public bank with community donations," avers Dr P Srinivasan, Chairman & Managing Trustee, Jeevan Blood Bank and Research Centre, Chennai. Experts also feel that it is best suited for treatment of hematological disorders; where as autologous stem cells fail to result in a beneficial outcome in such cases. "In our opinion, public banking system must be in place for hematological disorders, whereas, autologous banking is more appropriate for treating diseases in the regenerative mode," says Dr Rao. Experts agree that public cord blood banking is a novel concept of making an otherwise biological waste available as a therapeutic tool but this is however fraught with multiple issues. The source material is freely available, what with nearly 80,000 births happening everyday in India. The issues start with the cost of collection systems, couriering to the processing centre, testing, through processing and finally storage. All these come at a prohibitively expensive financial liability. Testing itself would involve all infective markers like the HIV, Hepatitis B, C, Syphilis, CMV apart from sterility issues to detect contamination of the blood or tissue.
"Making samples from the public cord blood bank available to the masses would mean performing a six-part HLA typing on all the samples apart from the NMDP guidelines of a genetic screen for inborn errors. All these would cost the facility a large sum of money, which it has to recover from sale of the banked unit to a HLA-matched recipient," says Dr Prem Anand Nagaraja, CEO, Narayana Hrudayalaya Research Centre & DirectorOperations, Rotary Narayana Tissue Bank & Stem Cell Research Centre. Nevertheless, cord blood stem cells stored in a public cord blood bank are available for public use and often, chances of finding a match are low. If a match is found, the charges to retrieve these stem cells can cost as high as $26,000. It has been estimated in the Cord Blood Registry programme in the US, a repository of over 300,000 typed and stored cord blood units are necessary to ensure a 10 per cent chance of a 4/6match with potential recipients. A smaller repository means lesser chances of making a successful match and transplant. "For a customer, private banks will assure that the cord blood banked is instantly available should the need arise. The cord blood which is used will be their baby's blood and only the family has access to it whereas in public banks one is not guaranteed the availability of a match for a baby's cord blood, which typically is a problem, unless the bank has a huge repository," shares Abhaya. According to experts, public cord blood banking works only when the repository is huge and this requires extra large shares of the financial pie. This money has to come from Governmental organisations, NGOs, philanthropists or open-ended research schemes, funded by foreign funds. A global teaming up with other stem cell repositories across the world may make the public banking feasible, in terms of funding and revenues from therapies. It is this financial burden that is seen as a deterrent to organisations wanting to store cord blood publicly. According to Ahuja, the concept of public stem cell or cord blood banking will require backing of strong regulatory environment or else it will not sustain for long in India in the present market which is flooded with private stem cell banks. "No private cord blood banks are going to enter the public space unless and until there are legal rules for it. The few players who have entered the public space are doing it on experimental basis and is one expensive venture. It will take a long time for those public banks to come into commercial mainstream," she adds further. Challenges Besides being the richest source of cord blood, there are few other factors which have made India both preferable as well as a risky destination for prospective stem cell banking players to enter and survive in this segment. However, as in every nascent industry, the issue of regulation is rearing its head in stem cells. While the Indian Council of Medical Research had issued stringent guidelines for stem cell research and therapy, they are yet to be legislated. The Union Health Ministry is planning a law to regulate this sector. The guidelines have to become law in a strict sense to attract global attention. "New technologies, such as stem cell research, are a grey area in India and we are working to establish a regulatory environment," KK Tripathi, Senior Advisor, Department of Biotechnology, said in FICCI seminar in Mumbai. According to Ahuja, it is also important that along with cord blood banking, market players should also develop a strong scientific base too for application in genetic disorders, cancer therapies or other transplantation cases. This would become imperative with regards to creating a strong position amongst competitors.
Currently, umbilical cord blood and cord-tissue banking are more popular amongst the affluent clients. "The uptake of this concept would be faster in the upper class and tier III cities with comparatively higher disposable incomes," opines Ahuja. With stem cell therapy proving to be an emerging treatment for the future, cord blood banking is one of the cheapest alternatives. Stem cell transplantation facilities are increasing in India, but for optimal utilisation of these facilities, it is important to create concept awareness. It is still considered an ultimate preventive healthcare luxury due to high cost barriers. Selling the concept and its future benefits requires that the target respondents have a higher than average concern when it comes to preventive healthcare. As such preventive healthcare is becoming order of the day. Having said this, the next challenge in market penetration is to educate expectant parents and give them confidence about the medical benefits. At present, lack of awareness among the common people about the huge potential to be gained from the storage of cord blood stem cells and highly technical nature of the process is the key reason for a small customer base in the country. "However, the market has tremendous potential that could be tapped by initiating an awareness campaign and a customised marketing plan," says Dr Nagaraja. To overcome this challenge, companies like Cryo Banks India intend to involve doctors practicing in the towns. Unfortunately, investments are mainly happening only in marketing area without much science in it. "The major thrust involves getting more people to bank, without much regard to their clinical utilisation. Future Prospects All said and done, the concept of stem cell banking in India is here to stay, believe experts. In 2003 less than 30 diseases were able to get cured or supported with stem cells help, but, today over 85 diseases can be cured or supported. In India the Department of Biotechnology is taking initiatives to create Centres of Excellence in 35 medical teaching colleges to foster research in both adult and embryonic stem cells. "The success observed in other countries such as China, Taiwan and Korea is a yardstick to indicate that the concept of stem cell banking will also work in India," says Roy Chowdhury. Increased awareness levels among the masses about the concept and a strong legalised and less commercialised environment can work positively towards making stem cell banking an integral part of Indian healthcare.
8.2.Company Profiles REPORT HIGHLIGHTS
The global market for stem cell products was $3.8 billion in 2011. This market is expected to reach nearly $4.3 billion in 2012 and $6.6 billion by 2016, increasing at a compound annual growth rate (CAGR) of 11.7% from 2011 to 2016. The American market for stem cell products was $1.3 billion in 2011. This sector is expected to rise at a CAGR of 11.5% and reach nearl y $2.3 billion by 2016. The European market for stem cell products was $872 million in 2011 and is expected to reach nearly $1.5 billion by 2016, a CAGR of 10.9%.
SUMMARY FIGURE GLOBAL STEM CELL MARKET AND FORECASTS, 2010-2016 ($ MILLIONS)
Source: BCC Research
http://www.ibisworld.com/industry/human-stem-cell-banks.html
Banking on Stem Cells
With more than six private players emerging in stem cell banking and public stem cell banking also taking off, the stem cell market is poised to explode. Sonal Shukla analyses the future potential of the stem cell banking market Stem cells were in the limelight when recently US President Barak Obama lifted an eight-year-old ban on Government-supported funding for embryonic stem cell research, opening floodgates for millions of dollars in research. In the Indian research turf too, stem cell banking is gaining momentum. "In India the industry put-together has banked about 25,000 cord blood units over the last three years. This number is set to increase substantially with increased market reach and awareness, increase in regulatory approvals for stem cells based products and
lowered resistance to private banking will together encourage more clients to choose stem cell banking," shares Mayur Abhaya, President and Executive Director, Lifecell International. India: A Growing Potential With more than 80,000 births a day or 26 million births a year, India is poised to be the largest source for umbilical cord blood in the world. It's no surprise then that leading stem cell banking companies are keenly eyeing India. The investments are considerable and mostly run into millions of dollars. Analysts estimate that Indian stem cell banks, which is currently at Rs 100 crore, would generate Rs 2,700 crore in revenues by 2012, accounting for 17 per cent of the world market. "Companies with foreign funding are entering the market and are planning to capture at least 21 per cent of the total market," states Dr Jyothsna Rao, MD, Cryostemcell Karnataka, Bangalore. As of now, there are more than six players in this five-year-old market. Most of these cord blood banking companies are having an overseas parent company which is responsible for the initial investment. The Players
Cryobanks International India plans to increase to 250 plus towns
Lifecell now has 40 collection centres across Asia
Cryo Stemcell Karnataka thrives on making therapeutics as the future for stem cell banking
Leading private players in area of cord blood banking are Lifecell International, Cryobanks International India, Cryo Stemcell Karnataka, Reliance Life Sciences, Cordlife Sciences India and Cryo-Save India. This segment also includes nominal presence of public cord blood banks like Jeevan Stem Cell Blood Bank which is a not-for-profit stem cell bank. Lifecell, launched in November 2004 through a technology tie-up with Cryo-Cell International (CCI) US, was one of the first entrants in the Indian cord blood banking segment and therefore is said to be the biggest umblilical cord blood banking company in India. Lifecell made use of its first mover advantage and has created a customer base of 13,000 parents. Another homegrown venture that emerged in the early days of stem cell banking in India was Cryo Stemcell Karnataka. Started around five years ago by Dr SGA Rao, this company thrives on making SRMC, Chennai in association with Lifecell therapeutics as the future for stem cell banking. The has formed the therapy centre TRICell company treated over 60 patients for Beurger's disease (limb ischemia), with adult stem cells. On similar lines, it has completed trials on spinal cord injury, chronic liver failure, myocardial infraction and osteoarthritis. Cryobanks International India, started in 2006, is a joint venture between Cryobanks International, a US body, and RJ Corporation headed by Ravi Jaipuria. The company invested Rs one billion to build the seven repositories in metro cities.
Narayana Health City, Bangaluru also recently came up with a public stem cell bank
Cordlife Limited, a Singapore-based cord blood banking group, recently entered this segment opening the first cord life facility in India, with a storage capacity of up to 1,50,000 cord blood units. This unit has been set up at Bishnupur area on the outskirts of Kolkata. The company plans to invest Rs 300 million in 18-24 months to set-up similar facilities across India. Another European stem cell banking company, Cryo-Save launched its operation in India in December 2008. The company has set 10 stem cell storage banks in the country at a cost of Rs 10 million. Marketing the Concept Amongst the six existent players, Lifecell and Reliance Biotech both have partners with experience in pharma industry. These companies have established a sales force wherein trained medical representatives visit the prospective client's home and explain the concept, collection and processing, and provide confidence on the storage facilities. "They are aware of the fact that in India if any medical concept has to be rolled out, the doctors have to be taken into the loop. Therefore, private players have set up a marketing and sales force structure which is just like a pharma company that gets in touch with the obstetrician, gynaecologist on regular basis and get pregnant patient population from them," says Rena Shukla Ahuja, Industry Analyst, South Asia & Middle East Healthcare, Frost & Sullivan. The smaller companies are making some headway in creating infrastructure through private funding. There are companies who are directly approaching prospective customers for concept selling. Cryobanks International India has been following a model of increasing direct client and doctor awareness. "For the same, we are offering our services in more than 75 towns, which we plan to increase to 250 plus towns. We are also conveying information on the concept through advertisements, advertorials in magazines and papers. Further, we conduct direct mass outreach programmes which are aimed at increasing mass awareness about stem cells," shares Dr CV Nerikar, CEO,
Cryobanks International India. The company has also on offer the public banking services to its clients who wish to bank their stem cells in public banks and intends to cater to all towns with population of more than a lakh in the coming three years. "New product services can be storage of cord lining and cells from placenta, to name a few. These products can be collected at the time of birth and is easy to target the same customer for more additional business," states V R Chandra Mouli, Managing Director, Cryo-Save India. Expanding Wings The investments from the cord blood banks in India are mainly focused on the facility building, technology development fees and its day-to-day operations. The industry is expecting at least 10 more new players in the next few years including global players who are keen to leverage the India opportunity. With everyday advancements in stem cell technology from the research and clinical perspective, stem cells do promise a healthy future for the coming generations in India. Another phase in stem cell banking is about to begin with companies launching new banking services (like collection of stem cells from menstrual blood, cord tissue, and adipose tissue). This will increase the customer base significantly as this opportunity is not restricted to expectant parents alone. "Storage of stem cells from adipose tissues will be a new service with a new target and so a new strategy has to be developed," says Chandra Mouli of Cryo-Save India. Cryo-Save India has plans to offer more value added services like cord and stem cells from adipose tissues besides offering the elementary service of cord blood banking. It has just started its test marketing of cryo-cord service in India. "Menstrual blood contains extremely large number of mesenchymal stem cells and several thousand fold high concentration of stem cell growth factors. Because of these properties research has shown that these menstrual cells multiply rapidly and can also form other types of specialiesd cells including those of the heart, nerve, bone, cartilage and fat," shares Abhaya. Lifecell, which now has 40 collection centres across Asia and currently offers services such as cord blood banking and cord-tissue banking, is soon planning to launch the service of menstrual stem cell banking in India. Very recently, the company opened its R&D facility in Chennai exclusively for stem cell research and has also launched a new service- umbilical cord tissue banking which is open to all centres in India. Cost Dynamics
"Companies with foreign funding are planning to capture at least 21 per cent of the total market"
- Dr Jyothsna Rao
MD Cryostemcell Karnataka
Every year out of around 26 million births in India, 6,00,000 are potential clients, given the pricing of approximately Rs 79,000 per umbilical cord banked for 21 years. In recent times, companies are driving the prices to almost 50 per cent of the initial cost, forcing other companies to match the price. "Markets have been reduced to bargaining battlegrounds controlled by the aspirations of marketing personnel, who are looking to maximise their role in this drive, often resulting in giving the client 'biased banking' solutions options," says Dr Rao of Cryo Stemcell Karnataka.
"Banking would naturally increase if reductions in prices are made for banking"
- Dr C V Nerikar CEO Cryobanks International India "We can tap market potential by awareness campaign & customised marketing plan"
Private players are now increasingly offering EMI schemes of payments to help clients choose better and easier payment options for banking. Lifecell provides its services - Dr Prem Anand Nagaraja in two packages. With Lifecell's 'Baby Cord' plan, the Director-Operations interested parents can enroll and store their baby's cord Rotary Narayana Tissue Bank & blood stem cells and cord tissue for 21 years by paying Rs Stem Cell Research Centre 3,500 as a monthly EMI for two years. Other options available are one-time storage fee of Rs 79,000 or initial processing fee of Rs 44,600 with an annual storage fee of Rs 3500. CordLife Sciences India offers private banking for an initial upfront fee of Rs 38,000 and subsequent annual storage fees of Rs 3,600. The critical factor which is affecting business in the field of stem cell banking is the cost of processing and storing the stem cells. The process involves usage and procurement of items not manufactured in the country (so a huge amount is paid in duties and taxes) and this increases the cost of the process significantly. "Banking would naturally increase if reductions in prices are made for banking," shares Dr Nerikar. Agrees Ahuja of Frost & Sullivan, "Stem cell banking is hugely capex intensive and is in itself an entry barrier.” Hospital Benefits Stem cells are being researched upon globally and there are exciting prospects of their usage in future. Hospitals naturally are interested in providing these facilities to their clients as the awareness of the concept is catching on. Today, stem cell-enriched cord blood is used as a therapy for the treatment of diseases such as cancer, Parkinson's, Alzheimer's, spinal injuries, thalassemia, leukaemia and sickle cell anaemia and is an adjunct therapy for aggressive chemotherapy. Many hospitals like Sri Ramachandra Medical College, Chennai in association with Lifecell has formed the therapy centre TRICell. It has been set-up as a state-of-the-art therapeutics facility to provide clinical applications through stem cell therapy. Recently, StemCyte Inc, United States, joined hands with Apollo Hospitals Enterprise Limited and Cadila Pharmaceuticals Limited to set up a hybrid public and private umbilical cord blood stem cell bank and research institute — Stemcyte India Therapeutics in Ahmedabad. The company plans to build an inventory of approximately 25,000 ethnically diverse umbilical cord blood units to help treat critically ill patients in India and around the world. Experts believe that cord blood banking is a huge business opportunity for hospitals. According to experts, hospitals are in a good state to start a cord blood bank. Right now, there are almost 30 hospitals partnering with Lifecell. Stem cell banking companies are making use of ready customer-base by tying up with hospitals, medical institutes, research institutions and biotechnology companies to aid in stem cell research. For hospitals, this partnership is synergistic in nature since the hospital would promote cord
blood banking leading to additional revenue per new born delivered. "The hospitals themselves can start this kind of a business as gynaecology is the basic service any hospital provides and it is also a cash-rich department. However, the hindrance is the lack of law in this area and hospitals fear getting trapped into any medico-legal hassles," shares Ahuja Shukla. Many of the stem-cell banking companies have also been focusing on stem cell therapy centres. Cordlife Sciences India which provides stem cells processing and storage services to the end-consumers intends to work with stem cell therapy centres to enable cellular therapies within India. "We are planning for strategic tie-ups with hospitals in India to reach out to more expectant parents and educate them about cord blood banking. We are also in the midst of identifying local partners whom we can work with to link the technologies developed by our partners from abroad," shares Meghnath Roy Chowdhury, MD, Cordlife Sciences India. Public v/s Private — Will it Survive?
"More families will opt for cord blood banking as they get to know and witness what cord blood stem cells can do" - Meghnath Roy
Chowdhury MD Cordlife Sciences India
Even though it is a well-known concept in the Western world, public cord blood banking has just taken off in India a few months ago. Chennai-based Jeevan Stem Cell Bank has launched public banking service recently. Jeevan Stem Cell Bank is a unit of Jeevan Blood Bank and Research Centre, a 14 year old not for profit organisation. Bangaluru-based Narayana Health City also recently came up with a public stem cell bank named the Rotary Narayana Tissue Bank and Stem Cell Research Centre.
"Stem cell banking is hugely capex intensive and is in itself an entry barrier"
Public stem cell banking is different from private stem cell banking in the fact that the client does not need to pay for the banking and that the right of the sample is not with the client which is so in private banking. Moreover, there is a raging debate on whether public stem cell banking as a concept will survive on the Indian healthcare grounds in the - Rena Shukla Ahuja long run. "Without hesitation I will state that the need of Industry Analyst South Asia & Middle East Healthcare the hour is public stem cell banking which any one who Frost & Sullivan needs transplant can access. Possibility of use of stored stem cells within the family or by the same child is very limited. When one donates the cord blood to a public bank, the donor need not make any payment and the processing cost is met by the public bank with community donations," avers Dr P Srinivasan, Chairman & Managing Trustee, Jeevan Blood Bank and Research Centre, Chennai. Experts also feel that it is best suited for treatment of hematological disorders; where as autologous stem cells fail to result in a beneficial outcome in such cases. "In our opinion, public banking system must be in place for hematological disorders, whereas, autologous banking is more appropriate for treating diseases in the regenerative mode," says Dr Rao. Experts agree that public cord blood banking is a novel concept of making an otherwise biological waste available as a therapeutic tool but this is however fraught with multiple issues. The source material is freely available, what with nearly 80,000 births happening everyday in India. The issues start with the cost of collection systems, couriering to the processing centre, testing, through processing and finally storage. All these come at a prohibitively expensive financial liability. Testing itself would involve all infective markers like the HIV, Hepatitis B, C, Syphilis, CMV apart from sterility issues to detect contamination of the blood or tissue.
"Making samples from the public cord blood bank available to the masses would mean performing a six-part HLA typing on all the samples apart from the NMDP guidelines of a genetic screen for inborn errors. All these would cost the facility a large sum of money, which it has to recover from sale of the banked unit to a HLA-matched recipient," says Dr Prem Anand Nagaraja, CEO, Narayana Hrudayalaya Research Centre & DirectorOperations, Rotary Narayana Tissue Bank & Stem Cell Research Centre. Nevertheless, cord blood stem cells stored in a public cord blood bank are available for public use and often, chances of finding a match are low. If a match is found, the charges to retrieve these stem cells can cost as high as $26,000. It has been estimated in the Cord Blood Registry programme in the US, a repository of over 300,000 typed and stored cord blood units are necessary to ensure a 10 per cent chance of a 4/6match with potential recipients. A smaller repository means lesser chances of making a successful match and transplant. "For a customer, private banks will assure that the cord blood banked is instantly available should the need arise. The cord blood which is used will be their baby's blood and only the family has access to it whereas in public banks one is not guaranteed the availability of a match for a baby's cord blood, which typically is a problem, unless the bank has a huge repository," shares Abhaya. According to experts, public cord blood banking works only when the repository is huge and this requires extra large shares of the financial pie. This money has to come from Governmental organisations, NGOs, philanthropists or open-ended research schemes, funded by foreign funds. A global teaming up with other stem cell repositories across the world may make the public banking feasible, in terms of funding and revenues from therapies. It is this financial burden that is seen as a deterrent to organisations wanting to store cord blood publicly. According to Ahuja, the concept of public stem cell or cord blood banking will require backing of strong regulatory environment or else it will not sustain for long in India in the present market which is flooded with private stem cell banks. "No private cord blood banks are going to enter the public space unless and until there are legal rules for it. The few players who have entered the public space are doing it on experimental basis and is one expensive venture. It will take a long time for those public banks to come into commercial mainstream," she adds further. Challenges Besides being the richest source of cord blood, there are few other factors which have made India both preferable as well as a risky destination for prospective stem cell banking players to enter and survive in this segment. However, as in every nascent industry, the issue of regulation is rearing its head in stem cells. While the Indian Council of Medical Research had issued stringent guidelines for stem cell research and therapy, they are yet to be legislated. The Union Health Ministry is planning a law to regulate this sector. The guidelines have to become law in a strict sense to attract global attention. "New technologies, such as stem cell research, are a grey area in India and we are working to establish a regulatory environment," KK Tripathi, Senior Advisor, Department of Biotechnology, said in FICCI seminar in Mumbai. According to Ahuja, it is also important that along with cord blood banking, market players should also develop a strong scientific base too for application in genetic disorders, cancer therapies or other transplantation cases. This would become imperative with regards to creating a strong position amongst competitors.
Currently, umbilical cord blood and cord-tissue banking are more popular amongst the affluent clients. "The uptake of this concept would be faster in the upper class and tier III cities with comparatively higher disposable incomes," opines Ahuja. With stem cell therapy proving to be an emerging treatment for the future, cord blood banking is one of the cheapest alternatives. Stem cell transplantation facilities are increasing in India, but for optimal utilisation of these facilities, it is important to create concept awareness. It is still considered an ultimate preventive healthcare luxury due to high cost barriers. Selling the concept and its future benefits requires that the target respondents have a higher than average concern when it comes to preventive healthcare. As such preventive healthcare is becoming order of the day. Having said this, the next challenge in market penetration is to educate expectant parents and give them confidence about the medical benefits. At present, lack of awareness among the common people about the huge potential to be gained from the storage of cord blood stem cells and highly technical nature of the process is the key reason for a small customer base in the country. "However, the market has tremendous potential that could be tapped by initiating an awareness campaign and a customised marketing plan," says Dr Nagaraja. To overcome this challenge, companies like Cryo Banks India intend to involve doctors practicing in the towns. Unfortunately, investments are mainly happening only in marketing area without much science in it. "The major thrust involves getting more people to bank, without much regard to their clinical utilisation. Future Prospects All said and done, the concept of stem cell banking in India is here to stay, believe experts. In 2003 less than 30 diseases were able to get cured or supported with stem cells help, but, today over 85 diseases can be cured or supported. In India the Department of Biotechnology is taking initiatives to create Centres of Excellence in 35 medical teaching colleges to foster research in both adult and embryonic stem cells. "The success observed in other countries such as China, Taiwan and Korea is a yardstick to indicate that the concept of stem cell banking will also work in India," says Roy Chowdhury. Increased awareness levels among the masses about the concept and a strong legalised and less commercialised environment can work positively towards making stem cell banking an integral part of Indian healthcare.
