UNDER THE RADAR/IdentiGEN:The big league beckons. Dublin firm IdentiGEN formally opens an office in Kansas next week in a drive to establish its meat-tracing technology in the $80 billion (€59.5 billion) beef and pork industry in the US.
After forays in Europe, the location of a permanent base in the heart of America's cattle country underlines the scale of IdentiGEN's ambitions for the US. Already profitable, the company's aim is to increase it sales tenfold to some €100 million in the next five years.
That's quite a task, but IdentiGEN managing director Ciarán Meghen has nothing but high ambition for the company that developed from academic research at Trinity College Dublin in the early 1990s.
More accustomed to a lab coat than a cowboy hat, Meghen's work in cattle genetics led to the development of a commercial product that enables consumers, producers and retailers to verify the source of meat.
The BSE crises in Britain and Europe provided an early fillip to the business, which uses biotechnology to identify the source of meat throughout the chain of production. Given the danger to public health from BSE, the company's DNA traceback system provides reassurance about the origin of meat products.
Superquinn signed up eight years ago and Tesco Ireland joined other supermarket groups on the client list last November. To crack the US market, Meghen says IdentiGEN aims to convert one of its key prospects in that market into a commercial deal within a year.
"We need to secure a retail account, equivalent to Tesco or Superquinn, but on a national scale in the US," he says.
If that brings IdentiGEN into the orbit of WalMart and other retail giants, the company is also pursuing supersized food-service groups such as McDonald's and Burger King.
Crucially, Kansas offers proximity to the people who source meat and minced meat for such groups.
"We've set up a lab right in the heartland of cattle country in the US. Our choice to locate in Kansas sends a really strong signal to our customer base, all of whom are within a 200-mile radius of the city."
Not only that, but the company took on heavyweight management expertise last year when it recruited the respected biotech entrepreneur Donald Marvin as chief executive of the US unit. Additional recruitment to strengthen the senior management team is in train.
Marvin is well known for raising $70 million in equity for DNA testing firm Orchid Bioscience, a coup that still stands as the largest single biotech equity fundraising.
He is currently applying the same money-raising skills in a new fundraising round in the US capital markets for IdentiGEN, which requires up to $10 million in new equity to provide firepower in the vast US market.
This is on top of the €1 million that the company raised 18 months ago from 4th Level Ventures, an Irish venture capital backed by Dolmen Securities.
"Right now we are engaged in what could be described as second-round debt equity financing, where we expect to expand the capital base of the company quite substantially," Meghen says.
"It was always anticipated that we weren't going to crack the US with a million, it would always be a two-step process. . . to tackle the US market, it was perfectly obvious that we were going to need additional capital."
The new money will be used to commercialise contracts and provide a reserve for the acquisition of new technology or companies that provide complementary services.
While Meghen doesn't give details of the acquisition strategy, it's clear that the move into the US represents a big step away the company's origins on the TCD campus.
Meghen and co-director Ronan Loftus didn't have deep pockets when they set up the company in 1996 with support from TCD professor Dr Patrick Cunningham, who remains chairman and recently became chief scientific adviser to the Government.
Self-financing since 2005, the company received early support from Enterprise Ireland and TCD, which took a small equity stake in return for the use of its facilities. Now the lab in Kansas already employs 10 staff, half the number in the company's base in the Trinity Enterprise Centre at Pearse Street, Dublin.
"IdentiGEN's ambition is to build a company of scale," Meghen says. "We have a growth strategy for three to five years very closely related to expansion in US."
The next chapter starts here.
