Cord Blood America, Inc. (OTCBB: CBAI) has enjoyed tremendous success in 2010, capitalizing on the acquisition of 51 percent of the total outstanding shares of the private German company stellacure GmbH, a firm that collects, processes and stores cord blood for use in Germany, Spain and Italy as well as other European and Middle Eastern countries.
That acquisition is being hailed as the main driving force behind a 12% increase in revenue for the 2010 second quarter compared to the same period in 2009. CBAI announced on Thursday that revenue jumped from $813,950 to $951,561, pushing revenues for the first six months of the year to $1.79 million; up from the $1.76 million reported for the first half of last year.
CBAI is the parent company of their wholly-owned subsidiary CorCell, which has evolved into a leading umbilical cord blood stem cell preservation firm by capitalizing on the rising biological breakthroughs that have documented the life saving potential of stem cells.
Utilizing a patented process to preserve the umbilical cord blood of newborns, CBAI offers families the ability to store these potentially life-saving stem cells to treat a host of major diseases including leukemia, severe anemia, metabolic blood disorders and immune deficiencies. Backed by an almost universal acceptance by scientists, the use of umbilical cord blood stem cells is seen as one of the most important steps in combating the most difficult diseases.
With their acquisition of stellacure, CBAI has advanced into an even larger market, a positive sign for investors who can now see the growth potential of the Las Vegas-based biotechnology company.
Addressing the acquisition CBAI’s co-founder and CEO Matthew Schissler stated “The stellacure acquisition, we believe, will serve as a strategic footprint for the growth of our stem cell business throughout Europe. stellacure sales channels started in 2009 in Spain and Italy are already providing immediate market penetration and a significant opportunity for growth.”
Schissler continued, “The established relationship stellacure has with the German Red Cross is, we believe, a potential catalyst for expansion of our services throughout the Continent.”
In addition to the stellacure acquisition CBAI has continued to invest in other areas of business development, with the aim of producing further organic growth.
On the topic of growth, CBAI has transformed itself from a relatively small organization operating without a lab or lab staff one year ago into a major player that now has a 17,000 square foot facility, completely staffed, with international operations. Schissler has remained confident that the growth will continue, pointing to the company’s ability to diversify its revenue stream.
That diversification was pointed out on Aug. 10, 2010 when the company announced that within 90 days it would begin selling DNA Predisposition testing services in conjunction with The DNA Shop, LLC.
The testing would analyze the blood of a mother along with the blood drawn from a baby’s umbilical cord to determine predisposition to 25 diseases including Alzheimer’s, Multiple Sclerosis, heart disease, rheumatoid arthritis, obesity and seven different types of cancer, including breast, lung, skin and prostate.
Schissler was quoted in the announcement “DNA testing and HLA typing services are a natural progression from storing cord blood stem cells.” This offers some insight into how large of a market CBAI is actually operating within and points to the enormous potential that exists. Again Schissler, when on the topic of future growth, sounded more than optimistic when stating “There are many components that affect our financials, and we believe that the numbers for the next four quarters will be dynamic, especially when compared to the previous year.”
While Schissler may sound too optimistic for some investors, what has unfolded thus far in 2010 is pretty much in line with what he said in an interview with BioMedReports.com back on Jan. 5, 2010. When asked about the opening of the 17,000 square foot facility Schissler went right in to the company’s 2010 strategy saying:
“We always try to focus on three core goals and in 2010 we are opening our new state of the art laboratory. One of those three core goals is the diversification of revenue streams. Not only will we have our own organic growth engine, by processing and storing for our own company, but we recently entered into a letter of agreement to process and store for another very successful stem cell company. That’s going to be the flavor for 2010 and onward- diversification of revenue streams by using our new facility to its full capacity. The other goal is continued growth- like we saw mention of when we announced in late 2009 when we signed an agreement with a national labor association, Blue Cross and Blue Shield Association. That’s how we’ll grow some more, through the insurance companies. And finally, we’re going to be very focused on acquisitions. In fact, I’ll tell you that in 2010 we have a voracious appetite for acquisitions. With the economy the way it is, a lot of stem cell companies are struggling and we’ve been very fortunate to have our company go in the right direction by reducing debt and raising capital. We feel it’s a very good time for us to make some acquisitions and so we’re going to be very focused on that this year.”
Currently, most of CBAI’s technical analysis is weighted towards “Sell” or “Hold” with the exception of the 7 Day Average Directional Indicator “Buy” signal. The 20 Day Bollinger Bands are “Hold”. Historically, CBAI has been a difficult stock to trade based on technicals, which is not uncommon among penny stocks and sub-penny stocks as most such stocks trade on news and the anticipation of news and events. The realization of CBAI’s potential growth and the adaptation of the cord blood technology could be two fundamental factors that may impact analysis.
The 200 day moving average is 0.0079 and the 50 day moving average is 0.0053 as can be seen in the chart below:
Technical Chart on CBAI
CBAI is a penny stock traded on the over-the-counter bulletin board (OTCBB). Penny stocks are generally regarded as securities in a public company that trade below $5 per share. Sub-penny stocks are securities in a public company trading below $0.01.
