Asia Medic

Asia Medic: laggard cord blood banking aspirant to play catch up with Cordlife? NextInsight interviewed CEO Dr Wong Weng Hong for his thoughts on how AsiaMedic’s new JV in cord blood banking intends to compete against established player, Cordlife. AsiaMedic is entering the cord-blood banking business as a 25% partner with an option to raise its stake to 49% anytime. Its partner, Cryoviva International, is 70%-owned by well-known Indian billionaire Mr Ravi Jaipura, Chairman of India-based RJ Corp, a conglomerate with businesses in real estate, hospitality, food & beverage, healthcare and education. The remaining 30% is held by Dr T Chandroo, Chairman of Modern Montessori International Group, a local company which specialises in early childhood education in the Asia-Pacific. Key takeaways as follows: - even though Cordlife has established relationships with gynaecologists in Thomson Medical Centre and Mount Alvernia Hospital -- the two main private hospitals for deliveries -- the AsiaMedic JV is targeting gynaecologists who do deliveries there but whose clinics are elsewhere. (Gynaecologists play an influential role in helping parents select a cord-blood bank.) - In addition, the JV named Cryoviva Singapore will seek to win parents who do deliveries in other hospitals, especially public hospitals - through its Indian partners, Cryoviva Singapore will be able to connect quickly with the 500,000 or so Indian nationals who reside in Singapore. Dr Chandroo, through his education business, also has a captive audience of high net-worth parents. - AsiaMedic too has its own existing clients to whom Cryoviva Singapore's services will be marketed. The start-up capex -- including automated processing equipment and storage tanks - is $1.5-2m. The fixed overhead costs -- including a couple of lab technicians and lab rental -- would come up to a few hundred thousand dollars a year. Cryoviva Singapore plans to price its services at similar levels to Cordlife and the other service provider, StemCord (which draws clients chiefly from Gleneagles and Mount Elizabeth hospitals). There are various payment plans with different upfront amounts and annual payments. The fees will be recognised over the 20 years that the cord blood samples are expected to be stored, translating into a few hundred dollars a year in revenue per client. Part of the fee that clients can be paid through their child's Child Development Account to which the govet contributes alongside the parents. The breakeven point for Cryoviva Singapore is about 800 samples in the first year after which the annual number for break-even will be lower. Dr Wong believes it is not difficult to achieve as there are 12,000 samples collected every year in Singapore and the figure is expected to rise as more people learn about the benefits of cord blood banking. The critical mass is a few thousand clients beyond which the profitability of Cryoviva Singapore will rise very fast.