May 5, 2014 Issue
The Most Powerful Name In Corporate News and Information
Stable Quality Control Biomaterials
200 Cooper Avenue North
St. Cloud, Minnesota USA 56303
320.253.7400 or 800.599.2847
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – May 5, 2014
Mr. Goskowicz: Microbiologics is a maker of quality controls biomaterials. We take specific strains of bacteria, yeast, fungi, parasites, viruses and other pathogenic biomaterials that we source from selected repositories and we develop them into easy to use formats. We make them very stable. Then we ship them around the world to microbiology labs in the food industry where they are testing for pathogens, in the pharmaceutical industry where they are making sure the medicines are safe, into the clinical business where they are diagnosing disease and also into cosmetic testing, medical devices, any place where they are trying to make sure they do not have contamination of a product or service.
CEOCFO: Microbiologics biomaterials would prevent contamination?
Mr. Goskowicz: It is actually a control. Think of it this way. If you were a large manufacturer of chicken products, chicken for the grocery store, you are going to want to test your environment and make sure your drains, equipment and chicken does not have Salmonella in it. Therefore, you are going to spend a significant of time and money testing for Salmonella. However, how do you know that your test is working? You need a positive control. That is where you go to Microbiologics and you would order a specific strain of Salmonella that is well characterized and run the same test with it to verify that your test method is able to detect Salmonella if it was present in a real sample.
CEOCFO: You are selling Salmonella?
Mr. Goskowicz: We are. We sell over nine hundred strains of all kinds of microorganisms. We only work with class 1 and 2 biosafety levels. Class 3 and 4 are the really dangerous stuff, like anthrax and things like that. However, we do sell things like Salmonella and E. coli and synthetic Norovirus and other bad bugs. That is because you have to verify that you are able to find them. In the case of cosmetics, they want to make sure their preservatives and antimicrobials work. If you are dipping your fingers in the cold cream over and over again, you want to make sure the preservatives and antimicrobials work so that you are not using a contaminated product.
CEOCFO: Are there many companies in your industry that provide such a broad range of products?
Mr. Goskowicz: We have the broadest range of products. There really are only three companies in the world that do what we do. There are some smaller regional ones that overlap a bit, but there are really three companies in the world that are as big or have even close to, as extensive product line as we have.
CEOCFO: Are there other ways to achieve the quality control or is this the standard method?
Mr. Goskowicz: It varies a little bit by the market place, but yes, there are other ways. We know some microbiologists could order a specific strain of Salmonella from a culture collection. They can work up that bug themselves. They can grow it. Many times they need it in specific concentrations and they can do the dilutions to get it there. However, it is very time consuming, expensive and unreliable. With our products they are ready to use. It is freeze dried, it gets shipped to them, they open it up and it is ready to go. Therefore, there are significant savings and much less chance of error over what we call “manual methods”.
CEOCFO: How often would you be shipping the same product to a company? Is it one time? Does it get used up? How does the quality control testing work?
Mr. Goskowicz: We usually have recurrent customers, depending on their volumes, and their size. We have some customers that order on a weekly basis. We have others that will order once a year. Sometimes, they need biomaterials for validating an instrument. They might have a new instrument that they are putting in that is doing identification of microorganisms, so they might need fifty different strains just to validate that the instrument is working across a wide range of microorganisms. However, once it is validated they will do their routine quality control with only a few recurring organisms. Therefore, some of our business is sporadic, but most is recurring.
CEOCFO: You mentioned worldwide. Are there areas that you do not have a geographic presence in where you would like? Do companies purchase directly from you or is it through distributors? How does it work?
Mr. Goskowicz: In the US both have a direct sales force and we do use distributors as well. Outside of the US, we primarily use distributors. We have one hundred and forty distributors in one hundred and thirty two countries around the world. Pretty much, anywhere you either want to be or can be we have distributors now. Here in St Cloud, we just hit the fifty percent mark, where fifty percent of our revenue comes from outside of the US.
CEOCFO: Would you like to see the mix changing at all?
Mr. Goskowicz: We believe that as time goes on, more and more of our business is going to come from outside of the US. The US will continue to be a good market and there is plenty of room for us to grow here. However, if you think of the developing countries, in Asia, Latin America, even Eastern Europe and places like that, they are just now implementing more stringent quality standards on foods and developing pharmaceutical industries. Even their hospitals are adapting to Western standards. In addition, think about water and how precious water is becoming around the world. All of those trends favor more need for our types of products.
CEOCFO: You mentioned that there is some competition. Why choose Microbiologics?
Mr. Goskowicz: What is different is that we are focused on quality controls made from biomaterials. The other companies that are in this space are very large companies where this particular business sector for them is a very small piece, less than one percent of their revenue. They have it, they are in it, but they are not really focused on it. They are not developing new products. They are not spending money to develop new markets. Diagnostic companies like working with us, because we are focused on the business and we have a great deal of expertise. We are easy to work with and we are a positioned similar to a Switzerland. Companies that manufacture instruments and kits know that we will not be competing with them, they trust us and we help accelerate their product development.
CEOCFO: Are there new products that you add to the line? Do you often remove products?
Mr. Goskowicz: We do have products that we will discontinue from time to time, although not very many. They seem to have some pretty good longevity. Even when we have developed better versions of products, the original ones still seem to do well. I think the reason for that is that many of the companies have very well established SOPs and it is difficult to change those SOPs. Therefore, even as we bring in new products, the old products continue to grow. One of the new products that we are developing right now is a product that are quality control organisms that will glow when exposed to UV light. We accomplish this through a genetic modification to the organism. Interesting, but what is the value? The value is if you do find Salmonella in your chicken processing plant, the first thing you have got to do is figure out where it came from so that you can get rid of it. Therefore, everything stops while they figure this out. One of the possibilities is that it can be traced from their own laboratory or it may be coming from the outside. If you grow it up and it glows bright green, then you know it came from your own lab and you know where to look to go fix the problem. If it does not, then you know that it came from outside the lab and you can look there, which really speeds up their time to fixing the problem and getting the line back in motion.
CEOCFO: Where do you get your products? Do you maintain a large inventory?
Mr. Goskowicz: We have partnerships with many of the world’s leading culture collections. ATCC, the American Type Culture Collection, is one of the largest and we have a license with them, so we get many of our microorganisms from ATCC. We also have partnerships with other culture collections like NCIMB and NCTC in Europe. We also have a direct relationship with the CDC. The CDC has all of the new bugs--bacteria with antimicrobial resistance or antibiotic resistance. We also have a library of clinical strains in our Lexington facility as well.
CEOCFO: Do you reach out to potential customers?
Mr. Goskowicz: We do find that many people find their way to our doorstep on their own. However, we have a very extensive marketing program. As you would imagine, being global, we do tons of email campaigning, providing educational information and working with our distributors. In the US we actually have a six person sales team that calls on key customers, especially the larger ones. I do not think that any company ever has enough brand recognition or name recognition, so we work hard at it and I think we have done well. However, there are probably still people out there that have not heard of us.
CEOCFO: Do companies know what they want when they come to you or do you have a customer service component where you might explain what is available and how to use some of your products?
Mr. Goskowicz: Many customers are very specific and know what they need, but just as many do not. Others need something custom made for their needs and we have a technical service team that will work with them to design the best product for their specific needs. We also have a full customer service team that works with customers on the phone, suggesting products and explaining options. On our website, www.microbiologics.com, we have a great deal of information; including technical information bulletins, which are useful for our customers. Depending on what type of testing they are doing, there are tips on how to make it easier, more successful and more efficient.
CEOCFO: Is there much information available for potential customers or is that something that might attract people particularly to you?
Mr. Goskowicz: I think the fact that we have a ton of information is a big part of the value proposition we present to our customers. There is information out there, but it is not always easy to find. We find that across our marketplaces we have everything from very, very sophisticated PhD microbiologists to folks that really do not have a lot of background, but were drawn in from the line because they were good at science. Therefore, some need significant amounts of help and others teach us things on a regular basis. Either way, we become a clearinghouse of critical information for our customers.
CEOCFO: You were recently elected to the American Association for Laboratory Accreditation Board. Would you tell us about that and why it is interesting for you personally and how it is helpful for the business?
Mr. Goskowicz: What A2LA does is they are one of the leading accreditation bodies in the world. They accredit laboratories as well as doing ongoing assessment. These certificates of accreditation show that the lab maintains the highest standards of quality. The best labs in our space labs have achieved ISO 17025 certification. That designation shows they are certified as a reference lab. Microbiologics is ISO 17025 certified along with three other certifications. Becoming a part of the A2lA Board does two things; first it is a volunteer position and a non-profit organization. I feel I can offer my business expertise as a way of giving back to the lab community. Secondly, I will learn more about accreditation and assessment across a wide variety of industries. That widens my knowledge base and network.
CEOCFO: You have a number of many different industries of focus. Are there certain industries that you should be working with more or that are maybe a little more behind them times in what you are able to offer in Microbiologics?
Mr. Goskowicz: For us, the exciting area that we are just getting into right now is the area of molecular microbiology. Traditionally, most microorganisms were identified through culture methods. Microbiologists grow them up, and then they will perform a number of manual tests, to be able to identify organisms. Nowadays, we are getting better at genomic sequencing and polymerase chain reaction instruments or even mass spectroscopy, where we identify organisms at the elemental basis. All of these instruments are more sophisticated systems. They are fairly expensive and they are new. They take pretty good technologists to run them. However, they are much faster and more accurate than the old culture based systems. Therefore, as time goes on, this technology will be adopted in food labs, pharmaceutical labs and hospitals around the world. We are making a significant investment in the development of controls for these new Rapid Diagnostic Instruments. Often these controls are made from DNA or RNA extracts instead of the whole bacteria as we do today--the DNA or the RNA from them in the systems. We are also designing and making synthetic DNA/RNA standards. We study the genomic research literature on a specific organism, we get as much information, and we apply a patented algorithm, to design and then construct a synthetic DNA standard that can be used across multiple systems. A good example of that right now is that we are selling Norovirus standards, which is very difficult to grow or to keep. This synthetic Norovirus is very stable and easy to use.
CEOCFO: You mentioned an algorithm, but how do you evaluate technologies to know if they are really something you should be paying attention to and maybe incorporating in how you develop?
Mr. Goskowicz: Part of our strategic planning process each year is that early in the year we dedicate to present one full day meeting where a high level team presents what we call, market scans. Technology is one of these scans, and includes what is new, what is happening, what is coming on the horizon, what is being accepted by customers. We talk about the different markets. We go through competition. We look overall at what is happening in the economies, what is happening in the regulatory side, which can have a significant impact on our business. That helps us identify those things that are changing, which we then translate into the next step of our process that is reviewing our SWOT and our 5 forces model process. This ensures we are developing the capabilities and products are customers will need in the future.
CEOCFO: What do you do as CEO day to day?
Mr. Goskowicz: I spend a significant amount of time on the road working with many of our partners. We are a company of partnerships. We have companies for which we provide proficiency samples. We have instrument companies that we work with on programs. We have our distributors. In addition I spend a great deal of time interacting with the regulators. I am in Washington DC on a regular basis. At their very least I need to know what is happening and there are times there may be an opportunity to assist. Most regulators, including FDA, USDA, EPS, regularly reach out to industry for assistance. When it comes to biomaterial controls we are well known for our expertise. When I am in the office it is a combination of meetings. I spend a great amount of time with employees. I like to go around and see what is happening in departments and talk to people and get a better feel for what is going on, especially since I am away half of the time.
CEOCFO: Why does Microbiologics standout as an exceptional company?
that stands out to me, is our mission is to provide the highest quality
biomaterials for a safer, healthier world. If you talk to the employees
here, I think that is one of the things that we are really proud of. The
products that we make really do make the world safer and healthier! I think
that puts a little bit more of a spring in our step and gives us a little
bit of a swagger, not arrogance, but swagger, to know that that is our place
in the world.
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