Help Wanted: Bacterin CEO

Bacterin International Holdings, Inc. is looking for someone to replace company founder Guy Cook.

In an April 1, 2013 SEC filing, the company stated that Cook has provided notice of his intention to resign as president and CEO once a successor is selected. The company is retaining an executive search firm to identify potential candidates. Cook will continue to work with the company as a consultant and chairman of the company’s board after the new CEO is hire.

Ivory Tower to Wall Street

Bacterin was founded in 1998 as a sole proprietorship by Cook as a spinout of the Center for Biofilm Engineering at Montana State University (CBE). Today, the company has over 150 employees and sales in over 15 countries.

Revenues were historically derived from testing services and milestone payments from collaborative product development agreements with various blue chip medical manufacturers. Today, the company generates revenue from a number of sources including:

• Sales from products developed and manufactured by the company
• Sales of products manufactured by a third party and sold and distributed by the company
• Contract revenue from analytical testing and development services provided to medical device manufacturer clients, which tailor Bacterin’s coating process to the client’s specific product/medical application

Bacterin has developed and currently manufactures and sells several human tissue-based products, primarily allografts, through the company’s biologics division. In addition, the company also manufactures and sells, directly under its own name and indirectly through distributors, various coating and surgical drain products through its medical devices division.

Guy Cook

Cook began his career as a product specialist in the Image Analysis Department for Laboratory Equipment Company in Chicago. He later became president of Delta Resources in Crystal Lake, Illinois, which specialized in developing customized image analysis solutions for the academic community. In 1996, he moved to Montana and worked as a Confocal Microscopist for the CBE.

“When starting this company over 15 years ago, we focused on utilizing the best technology for improving our products. It is extremely rewarding to see Bacterin evolve into a leader in regenerative biologics. We have created an expanding, diversified product portfolio that has positioned the company for continued growth, ” said Cook.

Revenue and DOJ Challenges

Cook’s announcement comes just five days after the company announced less than stellar quarterly financial results. The company’s revenue declined from $9.1 million in the fourth quarter of 2011 to $8.1 million for the fourth quarter of 2012. Losses climbed from $2.7 million to $3.5 million over the same time period. Revenue for the year was a record $33 million, up 9% compared to approximately $30.1 million for 2011. The increase during the period was primarily attributed to the higher sales from the company’s sales force combined with improved penetration into its existing accounts.

It was also announced on February 11, 2013, that the company has received a subpoena from the Office of the Inspector General of the U.S. Department of Health and Human Services in connection with an investigation into possible false or otherwise improper claims submitted to Medicare.

The Right Timing

“The timing is right to begin this process, ” said Cook, “and I feel fortunate to have had the opportunity to lead the company during a period of fantastic growth. There remains a tremendous market opportunity for our business; both domestically and internationally. The successor to this role will have the skill set to navigate this evolving healthcare environment and thereby transition the company towards the next phase of growth.”