Question-and-Answer Session
Operator
(Operator Instructions). Your first question will come from the line of Ross Muken with Deutsche Bank. Please proceed.
Ross Muken - Deutsche Bank
On the diagnostic assets, could you dig a little deeper on sort of some of the trends you have seen in that business, and if you could talk about what you have seen in sort of the reimbursed assets versus the non-reimbursed? Then in terms of on the cord blood side of things, it seems like that business is held in pretty well. I'm assuming it's sort of performing as you expected and in terms of as we exited the quarter is the same level of kind of demand holding up as we head into Q2 as we sort of saw and then it was sort of just a steady state?
Rob Friel
Let me start off by talking about, I'd say the systems business, which is really sort of a newborn and prenatal screening and I think what we are seeing there is in the U.S., it is sort of flat because as I mentioned there is continued pressure on the U.S. State Labs and their budgets. We think there is maybe another quarter of that.
I think I mentioned in December we were seeing some safety stock reductions and we think that's probably another quarter of that and we start to see growth in the back half, but clearly there is a slowdown in adding tests to the menu. But we continue to see good growth outside the U.S. whether it's in Europe or in the developing areas. So I would say in those cases it is not so much a function of reimburse versus non-reimburse. It's really more of a function of geography. So from that perspective, I think those business will do well in the back half.
With regard to the cord blood, I think there is two things that's going on there. It seems to be fairly recession resilient up to this point and I think it really speaks to the lack of penetration or the fact that it's penetrated probably in the higher sort of economic arenas.
The other thing that is happening is I think we are doing a better job of understanding the fact that we can market cord blood as part of a much larger enterprise. If you look at really the buying factors that people consider when they are going to store blood for let's say 18 or 20 years, one of the major factors they look at is the financial viability of the people they are storing the blood with.
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