March 15, 2008 (Vol. 28, No. 6)

Company Relied on Its Strength and Tradition as Innovative Center of Life Science Research
Founded as part of the former Institute of Applied Enzymology, a genetic research center established and funded by the Soviet government but located in Vilnius, Lithuania, Fermentas’ original purpose was to develop tools for molecular biology at a time when these were just in their infancy. Fermentas thus established its roots in the strong innovative traditions of a research organization.

The company started with restriction enzymes. “In fact, we discovered more than 30 percent of all known restriction enzymes,” claims Arvydas Janulaitis, Ph.D., Fermentas’ founder and chief scientist. “While the company has diversified, all products are based on the use of DNA and enzymes.”

Today, with 400 employees worldwide, including 30 Ph.D. scientists, Fermentas has grown into an integrated molecular biology supply company. Restriction endonucleases, DNA and RNA modifying enzymes, other proteins, products for PCR, kits for molecular biology, DNA/RNA and protein markers, nucleic acids, nucleotides, oligonucleotides, microbiological media, transfection reagents, and other reagents are among the company’s product offerings.

Fermentas also provides contract services such as custom plasmid DNA preparation, technology development, manufacture of native and recombinant proteins, custom cDNA and nucleic acids, as well as screening of genes of interest from thermophilic and mesophilic bacteria collections.

Fermentas has been certified to ISO standards since 1996. Since the beginning of 2008, the company produces all its products in new class D cleanroom facilities, which opened last fall. These are qualified and certified as per EU directives and ISPE guidelines. According to Gerhard Gerber, Ph.D., president of Fermentas International, the new facilities together with ISO 9001 and ISO14001 management systems assure that all Fermentas’ molecular biology products are suitable for genomics, proteomics, and postgenomic applications.

Historical Perspective

“Business operations such as sales or marketing were impossible during the Soviet era due to autocratic bureaucracy,” explains Viktoras Butkus, Ph.D., Fermentas’ co-founder as well as CEO and chairman of Fermentas International. Only in 1988, during perestroika, was Fermentas allowed to sell products in bulk to Western countries with the publication of the company’s initial product catalog. This also marked the first time that Fermentas’ managers could participate in negotiations and be introduced to contractual relationships.

“But this period also exhibited some difficulties, especially in the banking system,” continues Dr. Butkus. “For example, there wasn’t even a bank in Lithuania that could perform international transactions.”

Fortunately for the evolving company, even while Soviet citizens’ foreign contacts were under the scrutiny of governmental structures, scientists enjoyed broader freedom of thought and were able to maintain relationships with their colleagues abroad. This, emphasizes Dr. Butkus, enabled Fermentas to tune into modern research.

The business climate was transformed for the better after Lithuania regained independence in 1991. “The major change was that we could freely travel to Western countries and visit similar biotech companies, where our long existing scientific contacts paved the way to establishing our first business partnerships,” Dr. Butkus recalls.

Most importantly, as early as 1992, the company started selling products under the Fermentas brand name. Initially, Fermentas marketed its products in bulk to a number of established companies, but New England Biolabs also sold some of its products for several years with the Fermentas brand name. Joint venture businesses were established in Germany (1992), Canada (1996), and the U.S. (1996), and Fermentas began marketing its products directly through its sales and technical support staff in these markets.

The main challenge for Fermentas in the early 1990s was the association with the Soviet Union, which was usually assumed to be synonymous with bad quality, comments Dr. Butkus. “We overcame that perception by setting the highest standards of quality for ourselves.”

Company Consolidation

The establishment of joint venture partners in western Europe and North America led to a fully consolidated company in 2002 called Fermentas International. With headquarters in Canada, the company was better positioned to compete worldwide. The company now sells its products directly in the U.S., Canada, and Europe, and through distributors in more than 50 countries.

“From the start of its life as a laboratory-type scientific institution with academic freedom of thought, Fermentas later had to change its culture and mentality to conform to industrialized and sustainable production,” explains Dr. Gerber. “This involved massive change in operations, management, and control procedures, including assessment and codification of the company’s technologies, know-how, and other intellectual assets. We implemented the ISO process management systems in 1996. Since then, all of our products have been manufactured using these systems.”

Fermentas strived to retain and preserve those aspects of its past that were deemed to be the most valuable. “We made them the core capital of our company—our personnel and experience, the free exchange of opinions, and a corporate culture that values research and innovation,” says Dr. Gerber.

In 2003, Fermentas Lithuania established its scientific research center and separated R&D activities from production operations. This provided greater resources dedicated to company research. The center, with more than 80 scientists, is focused on the development of innovative products and enzyme research for emerging applications and areas.

Since all the company’s products are manufactured in-house, according to Dr. Gerber, Fermentas can develop and use “the most stringent quality tests and thus maintain exceptional product quality. Its products are marked by the PureExtreme® trademark for highest quality and performance.”

Fermentas is also responsive to the demands of the market, he maintains. “For example, in 2006 we introduced an innovation, which overturned the long-held belief that restriction enzymes are complex and complicated enzymes, the handling of which requires deep knowledge of the subject; the FastDigest™ restriction enzymes line offers the ability to perform multiple DNA digests in five minutes in a single buffer.”

The company also markets NoLimits™ DNA Ladders, a set of ultrapure DNA fragments that can be used for the creation of any custom ladder, Dr. Gerber notes.

The new class D cleanroom facilities previously mentioned are incorporated for production of the entire line of the company’s products. With respect to the manufacturing process this means detailed documentation, batch records with full traceability of all parameters, independent quality control department, complaint handling procedures, education and training programs, and a supplier qualification program.

“To address special needs of our customers, products can also be made under GMP manufacturing conditions,” says Dr. Gerber. He believes that Fermentas is able to provide total custom manufacturing solutions in this controlled environment, including manufacturing, vialing, and packaging according to customer specifications. He adds that the facility offers batch-to-batch reproducibility and the guaranteed absence of any contaminants.

Fermentas is committed to additional growth and diversification through its continued investment in its research activities, stresses Dr. Gerber. It is establishing and developing new platform technologies. The company is also pursuing new strategic partnerships and acquisitions.

“To do this more aggressively, we recently accepted funding from Summit Partners, a leading private capital firm renowned for its expertise in strategic acquisitions,” he says. “We expect that the combined research and acquisition initiatives will greatly accelerate our growth and market penetration.”

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