Branson moves into biotechnology with launch of Virgin stem cell storage bank

Sir Richard Branson, the Virgin boss, has added a charitable venture to his empire - a private human stem cell bank with an altruistic twist that gives it the potential to save thousands of lives.

The bank will offer parents the chance to store blood from the umbilical cord of a newborn child, which is rich in stem cells, for treatment of diseases in the future, at the same time offering a portion of it for donation to others for treatment now. But the project was mired in controversy from the start after it emerged that the main backer of the bank is Merlin Biosciences, a venture capital fund specialising in biotechnology, which will expect profits from its £10m investment. Sir Christopher Evans, the founder of Merlin with an estimated personal fortune at more than £100m, was arrested in the cash-for-honours inquiry by the Serious Fraud Office in September. He has denied any wrongdoing.

The Royal College of Obstetricians and Gynaecologists (RCOG) said the intention to create a substantial bank of human stem cells, available internationally, was to be applauded. But it warned that the collection of the cord blood - taken from the placenta immediately after birth - must not interfere with the care of mother and baby at "a critical time".

The National Childbirth Trust said there were risks in "interrupting the birth process" and warned that promotion of the service risked inducing "guilt and concern" in parents who believed they should use it.

The Virgin Health Bank will compete with several existing private cord blood banks and the national public cord bank in north London. Uniquely it will be profit-led but have a dual public-private role - splitting each donation into a portion held privately and a portion available for donation to anyone who needs it.

Critics of the private banks say the chances of an individual needing their own blood in the future is remote. The science of growing stem cells - called regenerative medicine - to treat conditions such as diabetes and Parkinson's disease has not yet developed. But donor cord blood is needed now to treat conditions such as leukaemia.

Professor Peter Braude, chairman of the RCOG's scientific advisory committee, said: "Regenerative medicine holds great promise for future management of many diseases and cord blood stem cells might fulfil that promise if they can be grown successfully in large numbers. So far this has not been the case, but it may change in the future. This proposal provides a long-term insurance lottery that may or may not prove to be successful."

Parents will pay a fee of £1,500 to store the cord blood for 20 years and there will be no charge to anyone, from the NHS or abroad, who needs treatment and finds a sample in the Virgin Health bank that provides a match. The seven rival private banks hold an estimated 11,000 cord blood samples in all, and charge parents between £1,100 and £1,900 to store them. But they do not make their samples publicly accessible.

Sir Richard said he had been approached by the National Blood Service for help six years ago but his offer of a £3m donation had been turned down. "It was clear that the main problem was the lack of stem cells available to the UK population as a whole," he said. "This is why we believe that the dual public-private approach at Virgin Health Bank is the best way to alleviate this situation."

Sir Richard said the bank was shared 50-50 with Merlin Biosciences and all profits from Virgin's share would be donated to other charitable cord blood stem cell projects, such as the Anthony Nolan Trust. He said he would be "quite happy" for Merlin to get a return.

The move into stem cell storage sits neatly with Sir Richard's other investments in the technologies of the future. He has already announced his intention to take tourists into space, with Virgin Galactic, and is ploughing the profits of Virgin Atlantic into the development of green bio-fuels.

The Virgin Health Bank will be housed at a commercial storage facility called Biovault in Plymouth, which already stores 5,000 cord blood samples for a separate private bank.

Andrew Davis, chief executive of Virgin Health Bank, said it had freezer capacity for 5,000 samples initially and would expand according to demand. One in five NHS hospitals was already collecting cord blood but there was resistance among maternity staff in some others, he said.

How stored cord blood could save the child's life in years to come

Umbilical cord blood is rich in haematopoietic stem cells, which are capable of growing and adapting in the body to replace diseased or damaged cells. Cord blood is increasingly being used, in preference to bone marrow transplants, in the treatment of diseases such as leukaemia.

Unlike the bone marrow of an adult, cord blood is untainted by exposure to infection or illness and does not have to be so closely tissue matched.

Since 1988, more than 7,000 cord blood transplants have been performed around the world. The vast majority have been from donors to other patients. In leukaemia (cancer of the blood), for example, the patient needs fresh stem cells from a donor to grow replacement blood. Many scientists believe that in addition to this use, cord blood stem cells have potential to cure diseases such as diabetes and Parkinson's - called regenerative medicine. But this is uncertain.

The Virgin bank offers parents the insurance of storing their child's cord blood for the future, with the opportunity to donate some now. Only about 20 per cent of that collected, is thought likely to be needed for any future treatment leaving 80 per cent for donation.

The long term hope is that regenerative medicine will see stem cells from cord blood grown to produce replacement tissues and even organs. Tissue grown from a patient's stem cells, obtained from stored cord blood, would have the lowest risk of provoking an immune reaction.

Colin McGuckin, professor of regenerative medicine at Newcastle University, said: "Advances in cord blood research around the world are amazing. Seventy five conditions are treatable and in the future I believe it will be many-fold above that - maybe 750. "

Nicholas Fisk, professor of obstetrics and foetal medicine, Imperial College London and Queen Charlotte's hospital, said: "Virgin has acknowledged the chances of using blood stem cells for your own child are practically nil. They also acknowledge that the use in stem cell and regenerative medicine is only a possibility, but may in the future happen."

How it works

Umbilical cord blood is left in the placenta after birth. It is extracted by inserting a small needle and drained. The procedure can be carried out as soon as the cord is cut, while the placenta is still in the womb. Alternatively, the blood can be collected after the placenta has been delivered and taken to a sterile room.

The Royal College of Obstetricians says that cord blood should always be collected after delivery of the placenta in a separate room. This must be within five minutes to prevent clotting.

In guidelines published last June, the college said trained staff should be allocated to the duty. But the Virgin Health Bank said the Human Tissue Act prevented it from employing its own staff.

The cord blood is processed and the stem cells concentrated into a 25ml sample for storage in liquid nitrogen. This is divided into a 5ml sample for the child and a 20ml sample to be stored in the public bank.