The debate over how far stem cell research should go ceased last year when President Bush decided to provide federal funding only for research on the existing lines of embryonic stem cells. Somatic stem cells, which are collected from umbilical cord blood, were deemed suitable for funding and research by the President, which left the door wide open for Cord Blood Registry (Cbr) to develop itself into the leader of the sector.
Cbr processes and stores newborns’ cord blood stem cells – which are usually discarded as medical waste – for potential future use by the child or family members. For an initial payment of $1,400 and then $95 a year, families can bank the cord blood for gene therapy, regenerative medicine, and angiogenesis (blood vessel formation). It was discovered in the early 1980s that cord blood provides a rich source of stem cells and is now used in thousands of medical treatments to help regenerate patients’ blood and immune systems that have been damaged by chemotherapy and/or radiation during cancer treatments.
The VCs like it. Based in San Bruno, Calif., with a cryogenic storage facility in Tucson, Ariz., Cbr just received $18 million in financing from ABS Capital Partners and HLM Management, a Boston-based venture capital firm. That brings Cbr’s total financing to $26 million. The company did a Series A round in April with Essex Woodland as the lead.
Although the company was founded in 1995 and has been profitable since 1999, Tom Moore, the company’s CEO, says it went to the private markets to strengthen its balance sheet. “It allows us to bring in some blue chip venture players, who we think will be helpful. We will eventually look for IPO, but in the meantime they strengthen us.”
ABS Capital put $14 million into the round and John Stobo, a general partner at the firm, will join Cbr’s board of directors. “This is a good company, with great opportunity. It will be well received by the public market when it is ready,” says Stobo.
Indeed, with two rounds of venture backing behind them, Cbr claims to have processed and prepared more cord blood samples for transplants than any other family bank. “ViaCell Inc. is similar to us but we’re twice their size. We’re by far the biggest player and I think clients like that because they like to know they are dealing with a company that will be around in years to come,” says Moore.
ViaCell chose not to comment for this story.
Contact Danielle Fugazy