ThermoGenesis recalling 7,000 Auto-Xpress units used in stem cell work

Rancho Cordova medical-equipment company ThermoGenesis Corp. said Friday that it is recalling about 7,000 units of its leading product, a disposable device used to process and preserve stem cells from the umbilical cord blood of newborns for future use in treating disease.

Chief Executive William Osgood launched the recall after an internal audit found that the company had failed to perform a federally mandated quality-control procedure on every shipment of its Auto-Xpress units from the time the product first reached the U.S. market, in late 2006, until December 2007.

A recall notice posted on the Web site of the U.S. Food and Drug Administration said it is unlikely that any stored blood has been contaminated, though the agency did recommend that any blood processed by a recalled device be labeled as such. If later used to treat a patient, a contaminated blood sample could pose a "significant adverse health outcome," the agency's letter said.

The recall was not announced until Friday because the company needed time to assess the scope of the problem and the likelihood of a health risk, Osgood said.

AutoXpress sales accounted for about 25 percent of ThermoGenesis's $5.5 million revenue in its most recent quarterly report. The AutoXpress has recently posted the fastest growth of any product in the company's 22-year history, Osgood said.

Stem cells from umbilical cord blood can be used to treat a number of diseases, and treatments for dozens more are in clinical trials. ThermoGenesis is a leading producer of the equipment used at the banks that store the cells, including the world's largest, Cord Blood Registry.

Cord Blood Registry, based in San Bruno, charges $2,000 plus a $125 annual storage fee to process, freeze and archive a baby's cord blood. It has collected 210,000 samples to date, according to a spokesman.

The quality-control step that ThermoGenesis omitted is meant to spot a certain type of contamination. Osgood said ThermoGenesis managers failed to write the test into the company's operating procedures.

"It was a mistake," he said.

Osgood joined ThermoGenesis in January 2007, after the faulty procedures were in place.

Since discovering the error, ThermoGenesis has been working with its customers to retroactively test AutoXpress units. Osgood said no signs of contamination have been found in any of the lots identified in the recall.

"We expect to be able to resell them," Osgood said.

David Zitlow, spokesman for Cord Blood Registry, said ThermoGenesis' tests on the recalled units give him confidence that no blood samples have been contaminated.

"We don't see this as being anything more than an inconvenience," Zitlow said.

There is currently no way to test whether a frozen cord blood sample is contaminated, according to the FDA recall notice. ThermoGenesis is in the process of validating a way to test for contaminants after a sample has been thawed.

ThermoGenesis stock fell 4 cents, or 2.7 percent, to close at $1.55 in trading Friday on the Nasdaq.

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