"I want to look like Sharon Stone..."

... I suppose this must be what all the American 35+ year olds must be thinking as they rush out to buy Christian Dior's latest product on Macy's shelves on the weekend (Sharon Stone is the advertising model for "Capture" chosen by LVMH).


COSMETICS MOVE ASIDE

The product -which sounds like a piece of sexy photographic equipment or imaging software- is called Capture 60/80 XP and claims to have "lassoed the power of adult stem cells to help repair wrinkles". (For the interested Asian clients, Christian Dior plans to launch it internationally at the start of 2008)

The product was researched and developed by researchers at the Dior innovation center and the researchers at LVMH in collaboration with Professor of dermatology Carlo Pincelli, who heads the research unit at the laboratory of cutaneous biology in the University of Modena and Reggio Emilia in Italy. It contains a collection of treatment creams and serums for the face and eyes which target women in the 35+ age group who are trying to escape the clutches of skin aging by protecting their adult stem cells in the skin, making them more active and thus reduce the formation or deepening of wrinkles.

The article states that the company's patented "Stemsome" technology and TP-Vityl ingredient is included in the Capture cream's formula and works on a time release system to protect basal cells and the skin's bionectin scaffold which keeps the collagen in place.


HOW MUCH FOR OVER THE COUNTER REGENERATIVE COSMETICS?

The Capture R 60/80 XP collection includes 30- and 50-ml. bottles of serum, which retail for 80.90 euros and 106 euros, or $119.40 and $156.45 at current exchange, respectively. There are also 30- and 50-ml. jars of cream in a light texture and similarly sized jars of cream in a rich texture for 57.80 euros and 86.30 euros, or $85.30 and $127.40, respectively. The 15-ml. eye cream sells for 53 euros, or $78.23. Prices are for France.

In comparison, StemLife stores cord blood stem cells for the equivalent of 5 jars of cream.

While Dior executives would not discuss numbers, industry sources estimated that Capture R 60/80 XP will generate $37 million in wholesale business during its first 12 months worldwide.

SUPPORT FOR STEM CELL INDUSTRY

Interestingly, the article states that some of the proceeds from the sale of Capture will go to Standford University's adult stem cell research funds, which might be a contribution to the Institute of Stem Cell Biology and Regenerative Medicine


It's been known for years that by merely applying cosmetics, women can make themselves more attractive and appear youthful, but can we really nourish our stem cells and prevent them from dying using a cream kept in our cosmetic case? I'll have to ask someone who's going to use the creams. Well, I guess if there's any bit of skin on our body that is most exposed to UV rays and all other environmental insults, it would be our faces. Maybe I'll buy it for a friend as a present and see if those wrinkles do indeed disappear...

Viacell Acquired by Perkin Elmer

Now that PerkinElmer (PE) has purchased Viacell, the company best known to me for its PCR machines* now owns the distribution arm of Viacell's cord blood stem cell storage unit- Viacord. The announcement of Viacell's takeover, valued at USD 300 million (approx 960 million MYR) was certainly a whole lot more than what Celgene paid for LifebankUSA which was closer to USD 60 million a few years ago.

Viacell had several subsidiaries; one focusing on R&D for cord blood expansion and differentiation; one focusing on therapeutics; another focusing on freezing and storing women's eggs (Viacyte) and its most well known backbone cord blood stem cell banking service Viacord.

PE's intention is essentially to sell off Viacell's stem cell therapeutic business, the Viacyte service, probably wind down the R&D aspects of the business and to ride on Viacord's cord blood banking strengths.


WHY ACQUIRE A CORD BLOOD COLLECTION SERVICE?

PE acquired two companies last year namely Macri Technologies and NTD Laboratories, the former developed a genetic screening kit called Ultrascreen and the latter company offers the screening test at their facilities. In the latest addition to its stable, PE's acquisition of Viacord is to develop an end-to-end package for prospective parents who are shopping for cord blood storage and will also be provided the option of having their babies screened for freeBeta hCG (a peptide hormone indicative of first trimester down syndrome prenatal risk assessment). The chairman and CEO of PE indicated that the acquisitions represent the next steps in their initiative to build a comprehensive screening and diagnostics capability in maternal healthcare.

PE also intends to expand their genetic screening tools that test the cord blood collected for any conditions which are potentially treatable with stem cells. PE also plans to take advantage of Viacell's established distribution consumer network which is doesn't have- allowing it direct access to patients and clients instead of having to rely on doctors and hospitals to sell their product.


GROWTH IN THE MARKET

According to the Boston Globe, Viacord expects to generate less than USD 70 million in sales but Perkin Elmer believes that the cord blood banking market could reach more than USD 1 billion within the next five years. Additionally, PE's CEO also said that the genetics screening business is expected to account for more than 10% of PE's annual sales which totals USD 1.7 billion, and is growing faster than PE's business as a whole.


DRUG GIANTS ARE IN

PE plans to sell Viacyte (egg freezing and storage technology) to EMD Serono which is part of Merck Serono and Viacell's therapeutic business to another drug giant- possibly Amgen.


The CEO of PE Gregory Summe said that Viacord would continue to run independently of PE but that PE may provide additional funding and resources to accelerate Viacord's growth. With PE's generous offer of USD 7.25 per share, I wonder if the management team have decided to retire and let PE's management takeover the day to day operations of the company. Will PE succeed in this latest corporate move? It remains to be seen how the acquisition of Viacord's network can integrate with the screening services. In direct comparison, Celgene's acquisition of LifebankUSA hasn't enabled it to boost its position to No. 1 in the US yet.


*PerkinElmer's PCR machines were the most loved of the lot in the research lab where I used to work. There were long queues for the machine as it was known to give beautiful amplification sequences at high yield. Despite its bulky shape, the best labs still insist on having at least one version of the machine.

AutoXpress System: Not Yet A Winner for Thermogenesis Corp

When Thermogenesis announced that they had pioneered an automated system (AXP) for the processing* of cord blood stem cells, we were all quite excited that the industry was indeed moving in this direction. StemLife has been banking babies' cord blood stem cells in the FDA approved Thermogenesis cryo-storage bags since we started the service in Malaysia in 2001, hence the adoption of this system would seem a natural progression for us.

WHEN BEING FIRST IN TECHNOLOGY ISN'T NECESSARILY BEST

However, just like any system update (in IT terms), the question remains as to whether one wants to take a chance on being an alpha user or to wait for the beta version. StemLife's position is that we usually like to wait for all the bugs and kinks to be sorted out before we put our babies' stem cells on the line. There are 2 automated systems available on the market to stem cell processing laboratories namely Biosafe's Sepax System (Sepax) and Thermogenesis's AutoXpress (AXP).

Both systems have been in the Malaysian market for about a year and we've been evaluating them in terms of uptake internationally, performance and consistency of service. Despite the US largest cord blood stem cell provider- Cord Blood Registry- releasing results of 97% and above recovery rates using the system, many stem cell companies in the US (Thermogenesis's home market) and abroad have yet to fully convert their existing processing systems to the AXP system or Sepax system.


I should point out at this stage that the main advantage of using the AXP system (apart from its automatic sensor which makes recovery rates more consistent) is that it is pretty neat because it automatically puts all the stem cells into the thermogenesis cryo-storage bag in one closed loop (if you wanted to store it in any other container, you would have to syringe out the cells, defeating the functionally closed system that the sterile processing set is supposed to provide).


Upon following the most recent news released by Thermogenesis, it appears that thus far the uptake has been lackluster despite big announcements to market the product through General Electric Healthcare. This lackluster sales performance (due to problems with production and slow sales) for the year of 2007 has resulted in a doubling of the net loss at Thermogenesis Corp in the fiscal quarter ending in September.


GREAT, SO WHY AREN'T ALL CORD BLOOD STEM CELL BANKS USING IT?

I don't know if all cord blood stem cell service providers feel the same way but our reasons for a methodical evaluation are as follow:

a) COST
- It requires the acquisition of new expensive apparatus and equipment
- Technical fragilities (rate of machine breakdowns etc)

b) COMMITMENT
- All processing sets must be purchased from GE alone (effective monopoly)
- Hardware and Software and proprietary to Thermogenesis (data monopoly)

c) CLIENT
- StemLife already promotes the bag storage system but some other cord blood banks are still marketing a non-bag system. Hence Thermogenesis and GE need to convince those banks to adopt the bag storage system.

d) CONSIDERATIONS
- How committed are Thermogenesis and GE to this technology given on-going losses and opaque trendline?
- Price control (we're outside of the US and would be affected if there are currency fluctuations)
- How committed are Thermogenesis and GE to serving the needs of non-US clients? (which accounts for a smaller market)


FINANCIAL IMPACT

According to the article:

Revenue fell to $3.6 million in the quarter, down from $4.3 million in the same three months of 2006. The quarterly net loss swelled from $1.1 million, or 2 cents per diluted share, in last year's initial quarter to $2.3 million, or 4 cents a share, in the same period of fiscal 2008.

Thermogenesis's CEO William Osgood attributed the decline of the company's revenue to a series of false negative results in quality tests for the bags used in the AXP systems (leading to a delay in shipments) and the sale of only 3 BioArchive blood storage systems by GE healthcare, which he said was "significantly below target".

I wonder what the Thermogenesis target given to GE healthcare was, given that the challenges of the system remain and that most cord blood stem cell banks - both public and private- really have to operate on a tight budget and make the service available given their low margins.



*The processing of cord blood to obtain the important and critical stem cell numbers is lengthy (taking between 4-6 hours in total per unit if performed manually) and there is a level of operator dependent subjectivity (good, when you have many units to work on and experienced and well practiced laboratory scientists). This operator-guided process has been in use since the industry pioneered by the founders of the New York Cord Blood Bank in the 1990's.


**The FDA and American Association of Blood Banks (AABB) recommend the Thermogenesis cryo-bag for storage which most of the cord blood stem cell companies have adopted, but not all stem cell companies internationally or in Malaysia are using thermogenesis bag processing systems, instead they have promoted storage in vials, which implies that the AXP system isn't required.

StemLife remembers the late Dr. Tan Qui Hong

Dr. Tan Qui Hong was one of the first Obstetricians in the country to collect cord blood stem cells for StemLife. She paid a personal visit to StemLife's facility in 2004 (photo above). Dr. Tan passed away yesterday morning 8th November 2007 in Johor Bahru and she will be remembered by us as being a fair, kind and forward thinking doctor who always put her patients' best interest first.