Newsletter - October 2013


Cost comparison: Saving Stem Cells versus Buying Them

blood bag holding MSC

Frances Verter, PhD, Roberto Waddington, Alexey Bersenev, MD PhD

Let's say that you are a medical consumer who lives in the United States. We are all medical consumers at some point in our lives. Financially, does it make more sense for you to save your own stem cells for later use, or to assume that you will buy an off-the-shelf stem cell therapy when the time comes that you need one?

From a medical perspective, there may be biological advantages to either saving your own cells versus buying donor cells. Perhaps in a couple of decades "personalized medicine" will become the norm, so that having your own stem cells confers a big medical advantage towards treating your health conditions. On the other hand, any donor stem cell therapy that makes it through FDA approval and becomes available as an off-the-shelf product will have a well-established profile of safety and performance against controls.

But let's put medicine aside for now, and compare the two options from a strictly financial perspective. We will construct a cost comparison of therapy with mesenchymal stem cells (MSC) taken from blood-forming tissue: storing your own versus buying a product. On both sides of this comparison, the MSC have to be isolated and grown in a laboratory to obtain a sufficient dose for therapy.

This is an important caveat: we are comparing the costs of stem cells when they are part of a so-called "manufactured" therapy product. In the United States, there is a big difference in how the FDA regulates stem cells, even your own stem cells, depending on whether they are raw or "minimally manipulated", versus "more than minimally manipulated" (this is the FDA language). Any time stem cells are cultured, even if your own cells are grown and then re-infused, the FDA considers the therapy to be a biologic drug, and it is subjected to a much higher and more expensive level of regulation.

Let's continue with our effort to construct a cost comparison for stem cell therapy consisting of MSC that have been cultured to expand the cell count. This type of stem cell is ideal for a comparison of your cells versus donor cells, because MSC do not require considerable donor-patient matching, so in theory your own cells or donor cells could both be well suited for the same medical therapy.

On the one side we have your own MSC. For the sake of this argument, we assume that when you were born your parents banked the MSC in your umbilical cord tissue. We further assume that the laboratory separated the MSC from the cord tissue and cultured the MSC to expand the cell count up to a potential therapeutic dose before they were cryopreserved. At the Genesis Bank, one of several companies offering this type of service direct to consumers for comparable prices, the generation of isolated and expanded MSC currently carries a first year cost of $3725, and a total cost of $5600 after 20 years of storage. Since this is paid in installments over 20 years, the consumer cost in today's money is only $5,021, assuming a 4% nominal interest rate. This storage plan allows the consumer to amortize the upfront cost of obtaining cells for therapies that could potentially be delivered to multiple family members over multiple treatments.

On the other side we compare to donated MSC that have been prepared in a biologic drug. For the sake of this argument, our comparison drug is Prochymal. The U.S. company Osiris Therapeutics (Nasdaq: OSIR) originally developed Prochymal, but it was sold last week to Mesoblast Limited (ASX:MSB; USOTC:MBLTY) of Australia. Prochymal is under study for several indications and in 2012 it was approved for Graft-versus-Host Disease in both New Zealand and Canada. The CEO of Osiris has said the cost for 10 pediatric doses of Prochymal is $200,000, or $20,000 per dose (earnings call on 7 May 2013). We will adopt that as a preliminary estimate of the cost per dose for approved indications in the United States.

We now have a ballpark comparison: you can store your own MSC for 20 years at a cost of about $5,000 in today's money, or you can pay four times more to purchase donor MSC for about $20,000 per dose.

Obviously this is a simplistic cost comparison, and many additional factors need to be considered to construct a practical comparison of the cost of the two therapy pathways:

1. At present the only way that a patient in the United States can legally receive therapy with their own expanded cells is to participate in an FDA-approved clinical trial. The cost of the regulatory overhead to set up an approved trial could increase the price of therapy with your own cells buy double or more. This factor is almost impossible to forecast.

2. There is an important distinction between a single dose of a cell therapy versus a course of therapy, which may require multiple doses. No storage of personal MSC can truly be "treatment-ready", since the research to define those treatments is still underway and none have yet been FDA approved. Hence, a course of therapy may require additional expansion of the stored cell count to create multiple doses, which would require additional weeks growing the cells in a laboratory and performing testing before release.

3. Prochymal is available as an off-the-shelf product, which saves the consumer both time and money. A consumer who wishes to use MSC from a family bank must first request that the bank retrieve and thaw the cells, then wait while they are prepared for therapy. The preparation may require additional culturing, which will add significant time and cost.

4. Of course, what any therapy actually "costs the patient" depends on what type of health insurance the patient has, and in the United States that varies greatly from one person to the next.

We have presented this cost comparison purely as a starting point for discussion, and it should not be construed as medical, financial, or regulatory advice. In particular, the regulatory environment remains uncertain and future changes could significantly impact the ability to use your own expanded cells, by alleviating or increasing the regulatory burden and cost. Nonetheless, storage of MSC in a family bank does offer consumers the option to pay in installments for storage of therapeutic cells that may be used many times in the future.

Frances Verter is the founder and director of the Parent's Guide to Cord Blood Foundation. Roberto Waddington is the founder and director of CordVida, a family cord blood bank in Brazil. Alexey Bersenev works in the clinical cell and vaccine production facility at the University of Pennsylvania, and is a blogger at and

We are deeply indebted to Brad King, MS MBA, director of cell therapy operations for Cook General Biotechnology, for his guidance.


Genetics Policy Institute

Bernie Siegel

Bernard Siegel, JD, founder

The Genetics Policy Institute (GPI) is a leading promoter and defender of stem cell research and other cutting-edge medical research targeting cures. We are the catalyst and provide leadership to the Pro-Cures Movement, an influential global network of stakeholders - from patient-advocacy to science and industry.

GPI pursues this mission through co-sponsorship and management of its flagship annual World Stem Cell Summit, publication of the World Stem Cell Report, advocating via the Stem Cell Action Coalition, organizing events, speaking engagements, teaching initiatives such as the Stem Cell School, and strategic collaborations. We create positive public awareness for stem cell research and regenerative medicine.

GPI maintains science and legal advisory boards comprised of leading stem cell researchers, disease experts, ethicists and legal experts as well as a dedicated fulltime staff of policy, business, science and communication experts that are available to educate the public and media on stem cell issues. GPI serves as the foremost channel of knowledge between the world leading stem cell experts, patient advocates and those who make policy for the general public.

The World Stem Cell Summit, produced by the Genetics Policy Institute (GPI), is the largest interdisciplinary networking meeting of stem cell stakeholders that unites the diverse regenerative medicine community. With the overarching purpose of fostering biomedical research and investments targeting cures, the Summit is the top conference charting the future of this burgeoning field.

The program of the World Stem Cell Summit provides the research, industry, economic and societal context for understanding how all of the pieces of the stem cell puzzle fit together. The agenda features more than 150 speakers and 50 hours of in-depth presentations. Supported by 200 sponsors, exhibitors, endorsing organizations and media partners, the Summit is a three-day showcase of innovation, insight and inspiration.

The Summit's industry track, standing alone, is the largest stem cell business conference in North America with top leaders from cell therapy, biotechnology, tool, devices and pharma in attendance on a program that covers in-depth the issues pertinent to translating basic research into cures, including discussions on regulatory pathways, cell standardization, reimbursements, financing, venture capital and economic development.

This year's World Stem Cell Summit will be held in San Diego Dec. 4-6, 2013. We hope you will join us there.

Bernard Siegel is the founder and Executive Director of Genetics Policy Institute (GPI), a nonprofit organization with offices in Palm Beach, Florida and Palo Alto, California. Mr. Siegel received his undergraduate and law degrees from the University of Miami (BA 1972, JD 1975). He is a member of the Florida Bar since 1975. He first became involved with the scientific community when, in 2002, he filed a landmark legal case seeking a guardian for an alleged human clone, a case that was widely credited for exposing the clone as a sham. That experience inspired Mr. Siegel to trade his 30-year courtroom career to found GPI, which leads a global "Pro-Cures Movement".

Mr. Siegel is a frequent speaker and consultant on the subjects of stem cells, public policy, patient advocacy and the societal implications of longevity. Mr. Siegel has served on the governing boards for the Coalition for Advancement of Medical Research (CAMR), Americans for Cures Foundation, and the Interdisciplinary Stem Cell Institute at the University of Miami Miller School of Medicine. He has also served on committees for the Alliance for Regenerative Medicine (ARM) and the International Society for Stem Cell Research (ISSCR). He serves on Advisory Panels for the New England Regional Spinal Cord Injury Center at Boston medical Center and Sabrina Cohen Foundation for Stem Cell Research. He is a member of the American Society for Bioethics + Humanities and the International Society for Cell Therapy (ISCT).


The Difference Between Stem Cell Viability and Potency: A Short Guide for Parents and Patients

Ivan N. Rich, PhD

Ivan N. Rich, PhD, Founder & CEO HemoGenix, Inc.

When a patient receives a cord blood transplant, the patient's life depends on some of the stem cells in the cord blood finding their way into the bone marrow, where they start proliferating and dividing. This is called engraftment. Once engraftment starts, the patient's bone marrow begins to reconstitute the blood and immune system with new red blood cells, white blood cells and platelets that enter the blood stream. The stem cells that perform this spectacular feat represent about 0.1% of the total cord blood.

Parents can elect to donate their baby's cord blood to a public bank or store it privately in a family bank. You might assume that the status of the cord blood stem cells, that is their quality and potency, are monitored before and after freezing and certainly prior to use. Unfortunately, this is not necessarily the case.

When cord blood is collected, there are four tests that can be used to characterize the cells in the blood: 1. the number of total nucleated cells (TNC), 2. the viability (whether the cells are alive or dead), 3. the presence of a cell surface protein called CD34 that identifies blood-forming stem cells, and 4. the ability of the cells to grow and form colonies in a cell culture called the colony-forming unit (CFU) assay. Dr. Stephen Szilvassy explained both the CD34 and the CFU assays in the January 2013 issue of this Newsletter.

Now it might be expected that these tests represent the latest technology, but this is not so. They have remained essentially unchanged for more than 20 years. The CFU assay, for example, was first published in 1966 and with slight modifications, has remained unchanged. Even more troubling is that the properties that can predict stem cell engraftment and blood reconstitution, namely quality and potency (1,2), are not even tested. Indeed, the standard assays are so entrenched in the normal testing paradigm that it is almost heresy to suggest that they can be improved or replaced, despite scientific evidence to the contrary.

In 2002, HemoGenix completely "rebuilt" the CFU assay from the ground up. Instead of manually counting colonies or using a camera and software to count colonies under a microscope, we rely on the relationship between the cell's ability to produce chemical energy (in the form of ATP, adenosine triphosphate) and the ability of stem cells to proliferate. If a cell produces any ATP it is viable (i.e. alive). The ability to proliferate and engraft (i.e. stem cell health) are determined by the amount of ATP produced by the stem cells. This fundamental relationship between ATP and proliferation allows the potency of stem cells to be quantified in a standardized and validated manner according to FDA guidelines.

HemoGenix has developed proprietary tests that rely on measurements of ATP to assess the viability and potency of stem cells before and after cryopreservation.


STEMpredict is a HALO (Hematopoietic Assays via Luminescence Output) assay that was specifically designed to determine if cord blood stem cells demonstrate sufficient ATP to be stored for long periods of time. To do this, stem cells from a cord blood sample are grown in culture and the amount of ATP produced is compared to that of a control. The difference between the two predicts the proliferation ability or quality, which must meet or exceed a threshold to qualify for storage. STEMpredict only takes 3 days to perform, as opposed to 14 days for the CFU assay.

The second application is to ensure that when the cord blood stem cells are thawed, they will be potent enough to save a patient's life. HemoGenix is the only company that has developed a stem cell potency assay HALO-96 PQR that has the capability of predicting stem cell engraftment with over 90% accuracy. Research has shown that about 20% of all cord blood transplants fail to engraft due to insufficient stem cell potency (3).

Stem cell potency is a more complex measurement than stem cell quality. There is also a misconception that potency must correlate with clinical outcome. This is not necessarily the case and does not apply to cord blood stem cells. The National Marrow Donor Program (NMDP) requires (4) that potency testing be performed on a small thawed sample of the cord blood prior to transplantation, because potency predicts whether engraftment can occur, and allows the cord blood to be released for transplant. The HemoGenix HALO-96 PQR assay is compliant with both FDA potency regulations and the NMDP guidelines (4) for cord blood potency assays. No assay is perfect, but our 90% accuracy is a significant improvement compared with present day testing.

As illustrated by The Parent's Guide to Cord Blood Foundation, cord blood stem cell therapy has made monumental strides over the years to treat different diseases. Yet little attention has been paid to improving the tests that should characterize the stem cells that are responsible for the engraftment and reconstitution processes required for a successful transplantation. With the 5th edition FACT-NetCord Standards taking effect at the end of September 2013 that favor more rapid, reliable, robust, and above all, trustworthy tests, we hope to reduce the risk of graft failure and improve patient safety and clinical outcome.

More information can be found on the CFU and Equivalent Assays, Stem Cell Quality and Potency Testing, tests for Cell Therapy Products, STEMpredict and HALO-96 PQR to measure stem cell potency, on the HemoGenix website.

Ivan N. Rich, PhD, is Founder and CEO of HemoGenix, Inc. in Colorado Springs, CO, a world leader in stem cell toxicity testing of the blood-forming system and a pioneering company for developing stem cell quality control and potency assays for cell therapy and regenerative medicine products. Prior to starting HemoGenix in 2000, Dr. Rich was Director of Basic Research in the Division of Bone Marrow Transplantation and Professor at the University of South Carolina. Dr. Rich has over 40 years of experience in the field of developmental and experimental hematology and stem cell research and has written over 100 peer-reviewed research and review articles and has edited two books.


  1. Hall KM, Harper H, Rich IN (2012). Hematopoietic Stem Cell Potency for Cellular Therapeutic Transplantation, Advances in Hematopoietic Stem Cell Research, Dr. Rosana Pelayo (Ed.), ISBN: 978-953-307-930-1, InTech, DOI: 10.5772/31361
  2. Rich IN (2013) Potency, Proliferation and Engraftment of Stem Cell Therapeutics: The Relationship between Potency and Clinical Outcome for Hematopoietic Stem Cell Products. J. Cell Science & Therapy S13: 001. doi: 10.4172/2157-7013.S13-001
  3. Page KM, Zhang J, Mendizabal A, Wease S, Carter S, Shoulars K, Gentry T, Balber AE, Kurtzburg J. (2012). The Cord Blood Apgar: a novel scoring system to optimize selection of banked cord blood grafts for transplantation. Tranfusion 52:272-283. DOI: 10.1111/j.1537-2995.2011.03278.x
  4. Spellman S, Hurley CK, Brady C, Phillips-Johnson L, Chow R, Laughlin M, McMannis J, Reems J-A, Regan D, Rubinstein P, Kurtzburg J. (2011). Guidelines for the development and validation of new potency assays for the evaluation of umbilical cord blood. Cytotherapy. 13:848-855. DOI: 10.1111/j.1537-2995.2011.03278.x