San Diego event: Biogenetics, Inc.

Biogenetics, a California company, formed over ten years ago specializes in a growing subset of the molecular testing market and focuses on molecular genetic testing. This field analyses DNA do determine how genes function and facilitates the understanding of genetic variations and diseases.

Biogenetics supplies molecular diagnostic tests developed around its proprietary electronic microarray chip, which identifies and analyzes biological molecules including DNA and RNA. The microarray manipulates the natural positive and negative charges of these molecules so that they can be tested and examined in different states. Around this technology Biogenetics develops applications for the medical disease diagnostics and clinical research markets. It commercializes instruments, consumables, electronic microarrays and reagents, all product areas that are expanding along with the increasing availability of genetic information. Sales of these products, combined with the collaboration opportunities in the research market, drive short- and long-term revenue. Since the chip architecture design is open, it allows end users to customize the electronic microarray functionality to meet their individual research needs. This opens possibilities for sales and collaborations with companies in many facets of diagnostics, drug discovery and genomics.

Biogenetics commercializes its products through a direct sales force in the USA. It also provides technical support staff and field application specialists to help customers. Biogenetics is inclined for adding partnering opportunities and further possible physical expansion in Europe since it is an attractive market. While its sales force is experienced in the US market, it has no international experience. To explore the European marketplace, the company plans to attend the Bio 2005 tradeshow in Cambridge, UK. Biogenetics' CFO estimates that exhibiting at this tradeshow and the related travel expenses will cost at least $100,000. Unfortunately, there is no one on the company's sales team who has either the time nor the experience to coordinate the logistics of attending this tradeshow, or to analyze the European marketplace in advance of the show.

A challenge to enter the overseas markets is the differing regional genetics. This means different DNA markers, key elements in genetic testing, are not available in certain populations. In order to find those markers and to harness their potential the company will likely need to establish business development presence in Europe where it finds concentrations of available markers that are valuable to genetic testing. Further Biogenetics is also interested in seeking distribution partnerships for the medical diagnostics market as well as for research labs. These partnerships are likely to lead to direct sales presence. Management believes that a European VP Business Development may be a logical choice to head up these efforts. However, Biogenetics needs to devote resources to mission critical tasks, without creating a large administrative infrastructure. At the same time, prompt access to accurate financial data and complying with local laws and regulations is crucial.

There are no venue preferences for its European office. It may turn out to be the home country of European VP Business Development. Biogenetics' CFO is uncertain what legal status its European operations should adopt and what the potential tax implications are in this regard.