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A blastocyst is an embryo that has been developed in the laboratory for five days after insemination, in contrast to conventional IVF which involves transferring embryos to the womb two to three days after egg collection and insemination (this is referred to as a Day 2 or 3 transfer).
With a blastocyst transfer, the embryo has advanced to the five-day stage. This means the embryo has divided many more times into many more cells over this period. Blastocysts have a very thin outer shell thus potentially increasing the chances of implantation into the uterine cavity. Most of the blastocyst contains a fluid cavity and it is possible to see the cells which will become the baby and those which will make up the placenta. While the majority of fertilized eggs will develop into a three-day old embryo, only perhaps 40% of these embryos will develop into a blastocyst. Therefore, blastocysts are considered to be a more "select" group of embryos with a higher chance of pregnancy.
The 5 day blastocyst is a much more advanced structure than the 3 day old embryo and the real advantage of transferring blastocysts is the high live birth rate associated with blastocyst transfer.