Vitrolife: Igenomix Economics & Insourcing Risks

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If we take a step back, I would like to have an idea, for example, of the typical lab and site. I usually like to have a picture in mind of its size. How many people work there? How many tests does it conduct annually? How would you describe the average Igenomix site and lab?

We wanted control and the opportunity to expand, and I'm sure that's true for other countries too. However, the reality was moving towards a hub-and-spoke model, which is more cost-effective for running thousands of tests in one location. Even if the turnaround time is slightly slower or if you have to inform customers that tests are being done overseas, most customers didn't mind. It only becomes an issue if the turnaround time is too long or if there are regulatory requirements, like needing tests done in a specific country or meeting certain accreditation standards that the hub lab doesn't have.

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Considering the customer base, you have IVF clinics, which is straightforward. However, there are different types of IVF clinics with varying behaviors. How do you categorize these customer types? For instance, you have large entities like IVIRMA, which handle some processes independently, and then there's an independent practitioner like Dr. Smith in London who partners with others. I'm curious about how you view the spectrum of IVF clinics and how you differentiate them.

You might have to offer heavy discounts and added value, but you can look at your P&L and see three years of decent volume. You can even invest in them to grow because these network clinics often acquire new clinics. These new clinics are sometimes struggling or smaller operations. They standardize them to offer everything, which is beneficial for suppliers as it brings new revenue streams.

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Considering the customer base, you have IVF clinics, which is straightforward. However, there are different types of IVF clinics with varying behaviors. How do you categorize these customer types? For instance, you have large entities like IVIRMA, which handle some processes independently, and then there's an independent practitioner like Dr. Smith in London who partners with others. I'm curious about how you view the spectrum of IVF clinics and how you differentiate them.

However, the downside is that some, like IVIRMA, do their own in-house testing. It's a question whether Juno Genetics is in-house, but it's essentially a spin-out, making it a closed shop except for certain tests. Another group in the UK, the Care Group, seems to work almost exclusively with Cooper, making it hard to break in. It wasn't even pricing that was the issue; it was multi-layered.

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