By Rachel Barron

Multibillionaire knight Richard Branson, famed for his business empire that spans airplanes and mega-music stores, is entering the banking business. Well, the business of banking blood taken from umbilical cords.

Sir Branson on Thursday in London launched Virgin Health Bank, a company that stores blood as a source of stem cells. The bank lets people save their child’s stem cells for possible future treatments in regenerative medicine, as well as donate them for treatment.

Virgin Health Bank’s service costs $2,950 to store this genetic information, bringing into question whether the expense can be justified given the limited advancements so far in stem cell therapy.

“How much faith should individual parents put in this particular line of research?” said Jesse Reynolds, a director at the Oakland, California-based Center for Genetics and Society.

Stem cells from umbilical cords are different than embryonic stem cells, whose use in medical research has sparked widespread controversy. Part of the promise of embryonic stem cells, when compared to umbilical cord ones, is their ability to differentiate into a wider range of specialized cell types.

Virgin Health Bank will take a donor’s cord blood stem cells and split it in two. One will be held in a private bank for only the donor and family to access. The other unit will be placed in a public bank, where stem cells can be accessed for patients in need.

The Virgin Health Bank was built with about $20 million in financing from the Virgin Group and London-based venture firm Merlin Biosciences.

Virgin plans to donate its proceeds to support cord blood stem cell research and initiatives. Potential beneficiaries could include the Anthony Nolan Trust and its plans for a new, ethnically diverse, cord blood stem cell public bank.

In December 2005, President Bush signed into law a bill establishing a national umbilical cord blood program. The legislation provided $79 million in federal funding to collect and store cord blood.

But for companies looking to set up private cord blood banks to provide parents an extra piece of genetic insurance for their children, it might be a harder sell. That’s because chances are slim a child would actually need their own stem cells for treatment in the early years. Low-range estimates peg the chances to be about 1 in 5,000. Children with such illness where stem cells could play a role will most likely need healthy, donated cells.