Cord blood registry sees FDA regulation as good for consumers and industry

Nov 24 2004

Beginning in May 2005, cord blood banks must meet new federal safety standards mandated by the Food and Drug Administration (FDA). Since 1997, Cord Blood Registry (CBR), the nation's leading newborn stem cell bank, has been preparing for these new regulations, which will set the baseline standards for all cord blood banks.

The blood remaining in the umbilical cord after it has been clamped and cut, "cord blood," has proven to be a rich source of stem cells, and a growing number of expectant parents are taking advantage of this once-in-a-lifetime chance by arranging to collect and bank their newborns' stem cells as a type of "biological insurance" to help protect their families' future health.

"Unlike other companies, we have been anxious for the FDA to issue these regulations," said Stephen Grant, Vice President of Communications for CBR. "CBR has spent a great deal of time and effort working with the FDA. Although CBR has always maintained the highest level of quality standards, these regulations provide an important legal foundation and add validation to the importance of family banking."

First proposed in 1997, the FDA rules require cord blood banks to take specific steps to prevent contamination throughout the collection, processing, labeling, and distribution aspects of the service. The only current industry oversight is offered by the AABB (formerly the American Association of Blood Banks), which established voluntary accreditation guidelines for cord blood banks. Leading the industry, CBR also worked with the AABB and became the first family cord blood bank to achieve accreditation in 1998.

Achieving and maintaining regulatory compliance is a significant financial investment that many banks will not be able to undertake. According to Johnnie Domingue, VP, COO, and CFO, "CBR has no outstanding debt and had approximately $25 million in cash and investments as of September 30, 2004. CBR has been profitable from operating activities since 1999, and being financially strong is critical to maintaining systems that are in compliance with federal regulations. It offers our clients the peace of mind and confidence that we will be here for them in the future and that their cord blood was processed and stored properly."

CBR focuses its business and research solely on the processing and preservation of newborn stem cells, unlike some other cord blood banks that have elected a more risky business model by branching out into biotech and drug development. In 2004, CBR committed $10 million to its new laboratory and will invest $75 million more in this facility over the next 7 years. The new 80,000-square-foot facility can handle the exponential growth the company has seen in the last year and expects to see in the future. CBR announced increased sales, with client contracts up 107% over the same period in 2003.

"Recent, early success and promise using stem cells for heart disease, stroke, vascular disease, and brain and spinal cord injury has fueled an increased level of awareness about the power and value of saving newborn stem cells," Grant said. "Banking newborn stem cells is literally a one-time opportunity to collect and preserve a lifesaving biological resource for families."