AMS Spring 2023

Bioprinting’s Trouble in Paradise: BICO Tackles Management Issues After Co-Founder Resigns as CFO

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On April 25, 2022, BICO (STO: BICO) co-founder Gusten Danielsson left his post as Chief Financial Officer (CFO) at the biotech corporation. Just hours later, he gave an explosive interview to Swedish financial newspaper Dagens Industri. Danielsson, who was responsible for strategizing BICO’s economic direction, said CEO Erik Gatenholm was “no longer the right leader for the company, even if he remains a controlling shareholder.”

“I believe that BICO with the right leadership has a bright future. I still own all my shares in the company,” Danielsson, who has also co-founded other enterprises in the Gothenburg, Sweden area like gaming startup Escape House, told Dagens Industri. “In the meantime, I expect the board to maintain good corporate governance aimed at protecting all of Bico’s shareholders. My votes at yesterday’s AGM [Annual General Meeting] reflect what was expected.”

 Former BICO CFO Gusten Danielsson BICO CFO and Co-founder Gusten Danielsson resigns. Image courtesy of BICO.

Over the last few days, turmoil at BICO has escalated. Following the news of Danielsson’s resignation and subsequent interview, BICO’s Board of Directors released a statement saying they had “full confidence in the CEO, management and current strategic direction,” shunning Danielsson’s comments as a mere public incident. They also determined that Danielsson had chosen to express his opinion about the CEO and the company’s leadership rather quickly and pointed out that they have been careful to follow both stock exchange rules and labor laws as the former CFO is still under employment obligations until the notice period of six months ends.

“It is obvious that in recent times there have been divided opinions about the strategic direction. Our focus is now on profitability and building a financially sustainable business backed by an experienced and strong finance department. We are now focused on recruiting an experienced and robust CFO who can assist the company in achieving the goals that the market and shareholders expect and that the company has previously communicated,” indicated Carsten Browall, Chairman of BICO’s Board of Directors.

Yet, no matter how BICO’s Board of Directors wants to spin the situation, news of an internal rift has put pressure on company shares, currently trading on the Nasdaq Stockholm. News of Danielsson leaving the company immediately caused BICO’s share price to plummet even more than its consistent downward trend, which began last year. Danielsson’s departure alone lowered BICO shares by 35% on Tuesday, but since September 2021, the company’s stock price collapsed by more than 80%, falling from SEK 602,50 ($61) to SEK 106,60 ($11).

Other internal issues at one of the company’s subsidiaries, Cellink, have also been revealed through employee reviews at Glassdoor. For example, one anonymous (and unverified review) from December 2021 stated that managerial leadership and innovation have “ground to a halt.” While another dozen or so reviews dating back as far as 2017 suggest the company is excellent but points at “terrible management” as one of the bottlenecks of the entire firm.

However, the fact that no name is associated with any of these reviews, or either Cellink or BICO, could also be construed as an attempt to manipulate the stock price or the company’s reputation. Therefore, we encourage employees to publicly address the issue by reaching out to us at the following email address: vanesa@3dprint.com.

While BICO attempts to resolve the matter and begins the recruitment process for a new CFO, the Vice President of finance, Tommy Niklasson, has taken responsibility for the firm’s finance department, reported Gatenholm.

So far, the CEO has only addressed the issue directly in a press release, stating: “I would like to thank Gusten Danielsson for his great contribution and commitment from BICO’s start in 2016 until today. The recruitment process that has been initiated aims to find a new CFO with solid experience of leading and organizing a finance department in listed, international groups with a simultaneous focus and drive on profitable growth.”

BICO Co-founders CEO Erik Gatenholm (left) and CTO Hector Martinez (right) BICO Co-founders CEO Erik Gatenholm (left) and CTO Hector Martinez (right). Image courtesy of BICO/Nasdaq.

As for Danielsson, he still owns 2% of the company claims and 2.63% of the votes. That’s fewer than 1.3 million shares, of which roughly 6.5% corresponds to Class A shares. The former BICO executive did state that he would not sell any of his shares, but there was no comment about his plans. Although. this is probably not the last we’ll hear from him.

BICO is one of the largest companies in the bioprinting realm. Since its inception in 2016, the company has grown at unprecedented speeds, placing its products in upwards of 65 countries in over 2,000 laboratories. In the last few years, it became immersed in an intensive expansion strategy that involved serially acquiring strategic businesses with opportunities in three main subsidiaries: bioprinting, biosciences, and bioautomation, all of which could help stimulate incremental demand. With BICO as the parent company overseeing 11 subsidiaries, including Cellink, there are more than 1,000 employees across its multiple locations.

Now that one of BICO’s three co-founders has left the company, we’ll have to wait and see what happens next. Primarily since following Danielsson’s decision to leave the firm, the first press release coming out of BICO refers to Gatenholm as the “Founder,” leaving us to ponder whether his fellow co-founders should still be regarded as such. Perhaps for Danielsson, it’s a moot point now that he left, but what about co-founder Héctor Martinez, who is currently CTO? Several matters are still uncertain with BICO. We will soon find out whether the situation will continue to escalate and the business’s stock will plunge even further, or BICO can contain it and continue growing its product portfolio.

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