Big Changes at BICO: Founders Leave as Whistleblower Revelations Spark Overhaul

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In a significant development at BICO (STO: BICO), founders Erik Gatenholm and Hector Martinez have decided to leave the company after eight years, marking the end of an era for the biotechnology firm. Following discussions with the board, the decision sees the departure of two key figures who have been instrumental in the company’s journey since its beginning in 2016. Their exit, which follows a period of internal conflicts and a fallout with the third co-founder, also comes in the wake of whistleblower reports highlighting concerns about the company’s aggressive sales practices between 2017 and 2021. These events have led to a thorough review of the company’s operations and have set the stage for a new leadership direction.

Chairman of the Board Rolf Classon expressed gratitude towards Gatenholm and Martinez, acknowledging their pivotal role in establishing and steering BICO. “I want to thank Erik and Hector for their efforts. Without them, the company would not have existed, let alone contributed to the change in the industry,” Classon stated, wishing them well for their future endeavors.

Erik Gatenholm, who served as President and CEO until November 2023, transitioned to a senior advisor role and has remained on the Board of Directors until now. Hector Martinez, who served as Chief Technology Officer (CTO) and, since January 2022, as Deputy CEO, has also stepped down from his positions. This move also includes Gatenholm’s decision not to seek re-election to the board. The departures of these key figures close a chapter on the company’s recent challenges and scrutiny, paving the way for new leadership under the recently appointed CEO, Maria Forss.

Nasdaq Stockholm sign announces Bico to begin trading on the exchange.

Rebranded bioprinting firm Cellink begins trading as BICO on Nasdaq Stockholm. Image courtesy of BICO.

An external whistleblower investigation into BICO’s aggressive sales tactics between 2017 and 2021 brought to light some concerns, although no criminal activities were found. According to the company, the founders and the board have taken these findings seriously, leading to significant internal changes, including adjusting the amounts expected to be collected to more realistic figures. Also, the company made big changes to its internal control systems to rebuild market confidence. These changes are important to make sure the company’s financial reports are correct and to improve how it is run, helping to regain trust from the market and showing that the company is serious about being open and responsible.

According to BICO’s recently released Annual Report for 2023, it has been proactive in addressing internal challenges, particularly highlighted by the whistleblower cases that came to light. The company also maintains a whistleblower function, which is managed through a collaboration with Whistlelink. This function provides a confidential and secure channel for reporting misconduct and ensures that any reported issues are investigated thoroughly.

In 2023, BICO received and investigated twelve whistleblowing cases, leading to changes in operations and disciplinary actions where necessary. Some of the issues raised by the external investigation were already revealed by an internal investigation conducted in 2022. The company explained that it wrote down account receivables and then continued the work that had previously been initiated to strengthen the internal control systems. Interestingly, according to the report, the “handling of some of the cases is ongoing and is expected to be completed shortly.”

Additionally, the company’s Corporate Sustainability Governance Model plays a pivotal role in this context. The Board of Directors at BICO holds the ultimate decision-making authority, particularly in strategic areas such as corporate sustainability, where it approves the business and strategy, the Corporate Sustainability Policy, and the Sustainability Governance Instruction for the BICO Group. These measures ensure that sustainability management is well integrated within the organization’s governance structure.

The emphasis on corporate responsibility is highlighted by BICO’s Code of Conduct, which applies to all employees and aligns with international standards like the United Nations (UN) Global Compact and the International Labour Organization (ILO) Convention on Human Rights. In 2023, BICO trained 84% of its employees in the Code of Conduct, claiming its commitment to ethical business practices.

Medical scientist working on non-animal testing.

BICO partnered with the Center for Contemporary Sciences to support the FDA Modernization Act 2021. Image courtesy of Center for Contemporary Sciences.

“All founders have an impact on the company’s culture. Therefore, as a result of what has been happening, it is natural that Erik Gatenholm and Hector Martinez, who were both founders and CEO and CTO and Deputy CEO respectively, have now left out of concern for the company,” explained Classon.

In April 2022, two of the three company co-founders, Gusten Danielsson and Erik Gatenholm, had a big disagreement that made it clear things needed to change. Danielsson left his post as Chief Financial Officer (CFO), but not before giving an explosive interview to Swedish financial newspaper Dagens Industri. Danielsson, responsible for strategizing BICO’s economic direction, said Gatenholm was “no longer the right leader for the company, even if he remains a controlling shareholder.”

One year later, Gatenholm stepped down from his CEO position. This change made many people wonder what would happen next for BICO. But soon after, Maria Forss became CEO and President in November 2023, bringing a fresh perspective to BICO’s leadership. With her extensive experience, Forss is steering the company away from its aggressive acquisition strategy, focusing instead on consolidation, operational efficiency, and strategic partnerships to foster sustainable growth.

BICO CEO Maria Forss. Image courtesy of BICO.

As the company moves forward and has published its Annual and Sustainability Report for 2023, it shows a steady financial performance with net sales of SEK 2,249.9 million ($225 million), marking a 6.1% growth from the previous year. Despite the leadership changes, Gatenholm remains a significant shareholder with 13.63%. Alongside Gatenholm, major stakeholders like Sartorius Lab (10.09%), Handelsbanken Funds (9.50%), and Hector Martinez (8.95%) continue to play a crucial role. Notably, BICO’s partnership with Sartorius, a leading pharmaceutical and laboratory equipment supplier, is key to boosting commercial efficiency and underlines the strategic moves to enhance the company’s market position.

As BICO prepares for the 2024 general meeting, where Gatenholm will leave the board and a new person will be proposed, the focus is on aligning with the European Union‘s (EU) Corporate Sustainability Reporting Directives and promoting a sustainable business model. In this time of transition, the company illustrates that understanding the past is crucial for navigating the future. With the founders’ exit, BICO is set to write a new chapter, merging lessons learned with new strategies. Under the guidance of Forss, BICO faces the challenges of the biotech industry with the hope of achieving its vision.

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