SGX-listed cord banking company Cordlife Group Limited (SG:P8A) shares experienced a sharp fall over its storage fiasco, leading to a 6-month suspension of its services. The Ministry of Health (MOH) in Singapore discovered that Cordlife's 22 storage tanks were not correctly maintaining temperatures, compromising the samples.
This led to damaged cord-blood units for more than 2,000 customers, which cannot be further used for any stem cell transplant purpose.
Cordlife operates a leading stem cell banking network in Asia, catering to over six lakh customers. The company collects cord blood samples through its blood banks and stores them at ideal temperatures for potential stem cell transplants in the future.
As per the ministry’s statement, the company is suspended from collecting, testing, processing, and storing new cord blood or tissue samples for a duration of six months. The suspension is set to commence within two weeks of the notice.
Following the news, the Cordlife share price crashed by 31% today. The stock went down by almost 40% during the midday trading sessions.
Tougher Times Ahead
MOH stated that further investigations are currently in progress, and it has granted Cordlife a 14-day period to submit written statements. Currently, MOH is investigating the remaining six storage tanks, which hold over 17,000 blood units. MOH also mentioned that the company could face financial penalties or legal action in the future.
The news has sparked frustration among customers, who have completely lost trust in the company. On the other hand, the company stated that it is currently engaged in a comprehensive investigation to understand the situation. The company has appealed for clients’ patience during this process. It has also assured its clients that it will put forth full efforts to find a replacement for the cord blood samples.
The company has appealed for clients’ patience during this process.