SINGAPORE – Embattled cord blood bank Cordlife has requested a halt in trading of its shares, pending the release of an announcement.
Cordlife shares last traded at 30½ cents before trading was halted on Jan 16.
The private cord blood bank has been embroiled in controversy after it was found to have improperly stored cord blood units, rendering those of over 2,150 clients unusable for stem-cell transplants.
The Ministry of Health (MOH) had said on Nov 30, 2023, that unannounced audits at Cordlife in August and November that year had uncovered temperature lapses at seven of its 22 storage tanks.
This exposed cord blood units to sub-optimal temperatures at different periods from November 2020.
MOH is currently investigating the viability of the cord blood units in six tanks that were affected by temperature lapses. Health Minister Ong Ye Kung announced on Dec 8, 2023, that investigations would roughly take six weeks.
While the results of the official investigation are not out yet, a Business Times report on Jan 15 shed more light on further lapses by Cordlife.
The revelations were based on a report obtained by BT that was prepared by Cordlife in response to queries from the Singapore Exchange’s regulatory arm – Singapore Exchange Regulation (SGX RegCo).
Temperatures in one of the cord blood bank’s storage tanks were found to have been as high as 20.4 deg C in 2021.
Cord blood units have to be stored at temperatures below minus 150 deg C, or they could thaw and be damaged. Cordlife’s internal standard for its storage tanks is minus 165 deg C.
The BT report also stated that a significant number of samples may have been moved to a dry shipper that had irregular temperatures in 2019. Dry shippers are typically used to transport cord blood units, and are not meant for permanent storage.
Senior members of management were made aware only in November 2023 that there were samples in the dry shipper, added the report.
Also, the company’s monitoring system failed to send an alert when temperatures in a storage tank were out of its parameters in one instance in June 2022.
The Straits Times reported on Jan 10 that SGX RegCo is reviewing information received from Cordlife before making an assessment on whether the company had breached regulations under the Securities and Futures Act 2001 (SFA).
The regulatory authority had asked Cordlife why its board did not make any earlier announcements about temperature irregularities or the audit by MOH before health authorities revealed the lapses in 2023.
In response, the company said on Dec 10 that it did not make any announcement as it assessed that there would be “no material impact on the financial performance of the group” for the 2022 and 2023 financial years.
Under the SFA and the Singapore Exchange’s listing rules, a listed company and its directors must ensure timely disclosure of information that may materially affect the price or value of its listed securities.
Failure to do so is a breach under the SFA if it is committed intentionally, recklessly or negligently.
