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HSCI and Its Management Buy Out a Share of GENETICO from the RVC Biofund

The RVC Biofund closed the deal to sell its 17.79% stake in GENETICO LLC (Center of Genetics and Reproductive Medicine GENETICO, hereinafter – “the Genetico Сenter” or “GENETICO”), HSCI’s subsidiary. The deal is profitable for the fund; its parameters were not disclosed. Since 2014, the total investment of the RVC Biofund in the project has exceeded RUB 180 million.

The founder and CEO of GENETICO Artur Isaev, who became the acquirer of the stake, said that in the nearest future, the package of the RVC Biofund would be divided. Its ultimate owners will be the HSCI Group (i.e. IceGen-2 LLC) — 10% and Artur Isaev — 7.79 %.

The Genetico Center is a Skolkovo resident and one of the leaders in the Russian market of genetic testing and analysis for medical and scientific purposes. The company works in bioinformatics, NGS-based exome and genome sequencing for diagnostic and treatment needs, in oncogenetics for targeted therapy of cancer, reproductive genetics (e.g. preimplantation genetic testing of embryos /PGT/ and non-invasive prenatal testing /NIPT/). Starting from the second quarter of 2020, the company is implementing the project to identify protective immunity against SARS-CoV-2 (to introduce COVID-19 antibody testing).

The RVC Biofund acted as a co-investor in the first round of start-up financing in 2014 and took part in the second round, which took place in 2016-17. Over five years, the portfolio project has shown reasonable development rates: GENETICO has carried out a technology transfer, built a vast sales network, organized its state-of-the-art laboratories to conduct tests, and established partnerships with leading world developers. According to its estimates, GENETICO occupies about 30% of the Russian market for high-tech genetic testing services. The company develops its own test systems and researches in the field of medical genetics. From 2015 to 2019, GENETICO’s revenue increased from RUB 65 to 400 million.

Director of RVC subsidiary funds Mikhail Fedotov noted that when investing in GENETICO, the RVC Biofund was focused not only on investment attractiveness but also on the project’s socio-economic effects in a breakthrough direction, which includes genomic technologies.

 

“One of our tasks as a specialized fund was to support a biomedical project in the early stages of its development. Today, GENETICO is a stable company with a flexible product strategy and a good ability to adapt to current conditions. Hence, the fund’s withdrawal from the project is well-timed”, emphasized Mikhail Fedotov.

GENETICO’s core businesses and the size of the markets it operates continue to have good growth potential.

“The RVC Biofund is one of the best investment teams in biomedicine in Russia. For HSCI, as a strategic investor, the experience of interaction with the RVC Biofund was precious. The Biofund supported GENETICO at an early stage with investment and strategy development, corporate governance expertise, resource mobilization, and communication with other development institutions. New genetic research methods used in practical health care in diagnosing and selecting treatment methods are becoming an effective way to prevent diseases. Some of the directions that GENETICO is developing are one step away from clinical guidelines and widespread in clinical practice. The most advanced healthcare industries (e.g., reproductive medicine, IVF, oncology) and medical professionals who deal with rare diseases have already started using genome sequencing and genomic data. Such studies are of increasing importance in diagnoses related to autism, epilepsy, orphan diseases, and screening to prevent the onset and development of diseases, and in oncology. We are trying to focus on areas in diagnostics and screening that can increase economic efficiency and reduce costs for the budget, and for health care — faster and more accurate diagnosis and increase the effectiveness of treatment”, commented Artur Isaev, the General Director of GENETCIO, Chairman of HSCI’s Board of Directors.

 

GENETICO LLC (Center of Genetics and Reproductive Medicine GENETICO LLC) is a resident of Skolkovo and a subsidiary of Human Stem Cells Institute (HSCI) PJSC. In 2013 GENETICO started provision of genetic testing and counseling services with the aim of early identification, prediction and prophylactic treatment of genetic disorders, including reproductive system diseases, via the development of Genetico® center & lab. Today, Genetico® is a complex of genetics laboratories and an expert medical genetic center with a wide range of services in the field of genetic testing & genomic analysis. Genetico® laboratories are equipped with the latest high-performance sequencers and robotic equipment of the newest generation and enabled advanced genetic research required for medicine, genomics, and proteomics.


RVC Biofund Ltd. (RVC Biopharmaceutical Investments Ltd.) was established in early 2011 with Russian Venture Company (RVC) and the Venture Innovation Fund’s participation. The investment strategy of the Biofond is to invest in shares in the authorized capital of Russian companies that are infrastructure services or innovative companies in the biopharmaceutical sector of the Russian economy.

RVC Infrafond is a subsidiary fund of RVC JSC and the managing organization of subsidiaries of RVC JSC: LLC FPI RVC, Biofund RVC LLC, Civil technology of defense industry complex LLC. During its existence, the funds have provided investments to more than 100 innovative projects.

In 2016, RVC Infrafund became a managing partner and investor of the Russian-Belarusian Venture Investment Fund, in 2018 — the main contributor to the NTI Venture Fund. In 2019, RVC subsidiaries managed by the RVC Infrafund withdrew from 28 venture projects. Total revenues from exits and remaining in the portfolio of companies exceeded 430 million rubles. Prospective assets in fund portfolios rose by more than 90% over the year.