Cordlife weighs ability to continue as a going concern as potential one-year suspension looms
If the halt takes effect, the cord-blood bank will continue to incur fixed fees and other operating expenses while business activities cease
[SINGAPORE] Cordlife is assessing the risks and uncertainties that could threaten its ability to continue as a going concern as it faces a potential one-year suspension, it said in a bourse filing on Wednesday (Oct 1).
The Ministry of Health (MOH) on Monday served Cordlife a notice of intent for a one-year suspension of its cord-blood banking services after a July audit uncovered operational lapses. This requires Cordlife to stop collecting, testing, processing and storing new cord-blood units and the company has 14 days to submit representations.
The private cord-blood bank said that it is “unable to assess” the impact of the developments on its performance for the financial year ending Dec 31, 2025.
Should the suspension take effect, Cordlife said it would continue to incur fixed fees and other operating expenses while business activities cease.
Operational and financial pressures, in addition to cash outflows incurred over customer refunds, may hurt its liquidity, the company said.
Moreover, its ability to continue receiving payments from unaffected customers under deferred payment plans for the next 12 months is subject to uncertainty, and any delays, shortfalls or defaults in payment could affect its cash position, it added.
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The company said it is currently unable to determine the quantum of cash outflow that may be required for several items, including potential refunds that may arise from the outcome of the investigations into the test results of storage tank samples.
MOH ordered Cordlife to conduct a full investigation into the test results after the ministry’s review of the results revealed that samples from three of five tanks had failed the criteria for viability and potency.
The items also include current claims by customers who alleged that their cord blood units have been damaged, claims that could arise in the future, as well as fines or penalties that may be imposed on the company due to the suspension.
Cordlife said that the assessment of its ability to continue as a going concern is expected to be completed by the end of the week, and it will provide an update accordingly.
The company’s net loss for its first half ended June narrowed to S$4.6 million, from S$12.4 million in the year-ago period. Its revenue surged 108.8 per cent to S$19.2 million, amid full resumption of its Singapore operations in January, after they were suspended for close to nine months.
Latest setback
The latest suspension arose from MOH’s midpoint audit for Cordlife in July, which revealed lapses in several aspects of its operations.
The MOH statement flagged lapses in governance, incident reporting and management, as well as processes involving collection, testing and processing of new cord blood units collected since January – when Cordlife’s licences for cord blood banking and human tissue banking services were renewed for one year.
Prior to that, Cordlife was allowed to resume cord blood banking operations in a calibrated manner from Sep 15, 2024. It was first suspended on Nov 30, 2023, after the lapses came to light.
The recently discovered lapses include the group’s storage of cord blood units that failed to reach the appropriate cryopreservation temperatures. MOH said that there was no evidence of appropriate investigations into whether these deviations caused damage.
The lapses also include the failure of Cordlife’s clinical governance officer (CGO) to provide proper oversight and guidance. The CGO advised staff that the improper storage of cord blood units was not an issue of concern, MOH said. As a result, future similar incidents were not reported and investigated, and no appropriate or preventive actions were taken.
Additionally, Cordlife continued using cord blood collection bags exposed to temperature excursions without checking if the bags could still be used and if the quality of cord blood units would be affected, the ministry said.
MOH added that the key personnel who had contributed to improvements had resigned without any proper handover process.
Cordlife called for a trading halt on Monday, before news of the potential suspension broke. Its shares resumed trading on Thursday and fell more than 18 per cent, to S$0.176, in early trade.
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