This year, the biotechnology company Genos, a global leader in glycomics research, marked fifteen years of operation. Its founder and co-owner, university professor Gordan Lauc, started a small forensic laboratory in Osijek in 2007, but very quickly, research and development, primarily in the field of glycan analysis, became the dominant activity of the company, which was named the most desirable place for scientific work in the world by the prestigious American scientific journal The Scientist in 2013.
Although Genos generated about 80 percent of its revenue from various projects until last year, investing more than 20 million euros in business development (and an additional 10 to 15 million euros invested by Croatian public scientific research institutions within Genos projects), Lauc claims that the company is not dependent on projects. These are earmarked funds for research and development, primarily concerning the role of glycans in diseases, especially those related to aging.
Currently, Genos is working on several large projects worth 15 million euros, and it has recently been approved for ‘ERC synergy’, the most prestigious project of the European Union, worth 2.5 million euros. However, according to Lauc, Genos could function very successfully even without projects, although it would be a much smaller company (currently it is medium-sized) and would not have such an important development component nor could it be the best in the world in its field.
The company has an Analytical DNA laboratory and a Forensic DNA laboratory where various analyses and expert evaluations for the market are conducted. Seven years ago, it sold 51 percent of the ownership of the Genos DNA laboratory to Medilab, but the attempt to separate that laboratory into an independent company was unsuccessful. In the meantime, Genos has taken over all employees and equipment of the Genos DNA laboratory and is now operating as a single entity again.
Two years ago, Genos began to more seriously commercialize its intellectual property and expects that this year about 40 percent of its revenue will come from the sale of its own services, and this percentage should grow in the future. This year, revenue will be similar to last year, when it exceeded 22 million kuna, and net profit was around 750 thousand kuna. Last year saw a significant jump in projects that will not be repeated this year, so a revenue growth of about 20 percent is expected from next year.
Two Approved Patents
With the beginning of the commercialization of intellectual property and planning for global market expansion, Genos’s ownership structure has also changed – the co-owner of the company has become mathematician and entrepreneur Nenad Bakić. Lauc did not disclose how much of the company he sold to Bakić, but his entry into the company was explained by Genos’s preparations for new business challenges, which is why such an expert is needed because every new Genos biomarker, the first being the biological age test GlycanAge, has the nature of a startup, and for the possibility of scalable business development, it is important to have an experienced investor.
Although Genos has been profitable since its first year of operation because it offers services with an exceptionally high added value, in some cases over 90 percent, profit has not been a priority for Lauc (although according to financial reports it is not large, but before depreciation it has always been), but rather investing in new equipment and hiring scientific talents. Genos has two approved patents: the biological age test approved in the European Union and the USA, and the diabetes prediction test in the EU, USA, and China. Their market potential is enormous because, according to Lauc, there are justified medical reasons to test literally everyone over thirty years old, at least once a year. Additionally, patents have been filed for predicting perimenopause, evaluating the effects of smoking, and predicting cardiovascular diseases.
– It is very difficult to estimate the total market potential, but it is certainly measured in hundreds of billions. In fact, the biggest obstacle to the successful commercialization of these patents is their potential, i.e., the need for very large investments to cover such a market. That is why we decided to grow slowly and seek different partners for different products – says Lauc, for whom the biggest challenge is not to miss a good opportunity, which often brings Genos to the brink of excessive stretching or excessive investments in research and development.
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