text: BIOH T ANNUAL REPORT 2000 QUALITY S YS IT BIOH TE M ED IS FI O 90 I 01 CERT The Humming Bird The qualities of the humming bird symbolize Biohit's product groups of liquid handling, diagnostics, instruments, service as well as the complete analyzing systems composed of these product groups. Biohit's products are characterized by excellence in the selected areas of specialization and performance: versatility, flexibility, power, speed, light weight, design, ergonomy, accu- racy and precision as well as safety in delicate operations. BIOH T TABLE OF CONTENTS BIOHIT 4 LETTER FROM THE PRESIDENT 6 BIOHIT GROUP 9 LIQUID HANDLING 13 DIAGNOSTICS 17 INSTRUMENTS 24 BOARD OF DIRECTORS' REPORT 26 INCOME AND CASH FLOW STATEMENTS 27 BALANCE SHEET 28 NOTES TO THE FINANCIAL STATEMENTS 29 PROPOSAL OF THE BOARD OF DIRECTORS AND AUDITORS' REPORT 40 ADMINISTRATION AND SCIENTIFIC ADVISORS 41 MAJOR EVENTS IN BIOHIT'S HISTORY 47 3 BIOH T OVERVIEW ON BIOHIT Biohit, operating in the areas of biotechnology and high Highlights in 2000 technology, was founded in 1988. The founders and own- ers have invested, in addition to innovations, experience • Completion of the new production plant in Kajaani and know-how, a significant amount of capital in the com- • Accreditation of the calibration laboratory for liquid pany. As a result, Biohit has been able to develop simul- handling products taneously and successfully its products, production tech- • Continuation of aggressive patenting policy nologies, and its global co-operation and customer service • Test panel for diagnosing Helicobacter pylori1 -infec- network. Biohit co-operates on the international level tion and atrophic gastritis2, as well as for screening the with such multinational companies as Beckman Coulter, risk of gastric cancer and peptic ulcer successful in clin- Becton Dickinson, bioMérieux, Johnson & Johnson and ical evaluations. Tests for diagnosing lactose intoler- 3M. Exports account for approx. 96% of the Group net ance3 and SLE4 successful in clinical evaluations. Test sales, and the degree of domestic production is approx. panel for diagnosing celiac disease5 complemented with 95%. a new test and became ready for sales. Biohit's first vision to develop into one of the world's • Preparations to commence the global marketing and leading manufacturers of liquid handling products in the sales of diagnostic tests and analyzing systems 1990s has been realized. Today, Biohit's global market • Commencement of the sales of instruments share of electronic liquid handling devices is 70%, and the • Reinforcement of the international collaboration and range of liquid handling products is the widest in the customer service organization through acquisitions in world. During the 1990s Biohit has successfully devel- the U.S. and Russia oped further its holistic vision on innovative diagnostic products, which together with the liquid handling devices, Biohit's Vision until 2005 instruments, related software and maintenance form com- plete analyzing systems. As a result of the realization of the Biohit's first challeng- Biohit's diagnostic tests, which are based on biotech- ing vision, which extended to the end of the 1990s, a new nology, have served as a guideline for the development of vision has been set until 2005. liquid handling products, instruments and software into • Strong broadening of Biohit's business portfolio with synergistic analyzing systems. These systems and most of new product solutions and analyzing systems, which their components are expected to become dominant are expected to replace older solutions and products on designs and industrial standards on the global markets. the markets In order to benefit more effectively from the possibili- • Promoting Biohit's new product areas, which represent ties offered by the overall, approx. USD 7.0 billion glob- considerably larger business volumes than the existing al market potential for liquid handling products, diagnos- ones, towards global market leadership tic tests and instruments, Biohit listed as the first biotech- • Notable increase in the level of Biohit's net sales and nology company on the New Market -list of the Helsinki profitability Exchanges in June 1999. In connection with the listing Biohit carried out a directed share issue producing MEUR 9.0 in new capital. All funds received will be used for the further development of the company. Biohit's entire per- sonnel both in Finland and abroad are shareholders in the company. The listing price for Biohit's share was EUR 4.5. In January 2000 the share price rose to EUR 13.5. During the latter half of 2000 the price varied between the levels of EUR 6-7. In 2000 the number of Biohit's shareholders increased by approx. 50% to over 4,000. Biohit's production plants are located in Kajaani and Helsinki. The sales and marketing subsidiaries abroad are located in France, Germany, Italy, Japan, Russia, the U.K. and the U.S. Biohit's 60 main distributors, which togeth- er with their local distributors form a network of 450 members, cover 70 countries. In 2000 international busi- ness continued to account for approx. 96 % of the Group net sales (MFIM 144.2). 53 % of the net sales were gen- erated from European countries, 19 % in the Americas and the remaining 28 % primarily in Asia. Liquid han- dling products constituted the main part of the net sales. 1 Helicobacter pylori causes atrophic gastritis and is nearly always connected with the development of gastric cancer and peptic ulcer. 2 Atrophic gastritis refers to a loss of normal mucosal glands of the stomach, which is caused by prolonged H. pylori -infection. 3 Lactose intolerance is caused by the lack of the lactase enzyme, which breaks down milk sugar (lactose), in the mucous membrane of the small intestine. 4 Systemic Lupus Erythematosus (SLE) is an autoimmune disease resembling rheumatic diseases. 5 The celiac patient is not able to consume most grain products. 4 BIOH T Group's Key Financial Indicators (FIM 1000 unless stated otherwise) 1996 1997 1998 1999 2000 Net sales 75 144 86 101 100 369 122 191 144 167 Operating profit/loss 2 358 2 459 8 246 7 921 -2 868 % of net sales 3.1 2.9 8.2 6.5 -2.0 Profit/loss before extraordinary items, voluntary provisions and income taxes -1 316 1 044 2 679 4 906 -3 450 % of net sales -1.8 1.2 2.7 4.0 -2.4 Profit/loss before voluntary provisions and taxes -1 330 939 6 786 6 906 -2 030 % of net sales -1.8 1.1 6.8 5.7 -1.4 Return on equity, % *)6 *) 12.1 3.8 -4.6 Return on investment, % 7.5 10.8 12.2 8.5 -0.8 Equity ratio, % -9.5 -5.1 38.8 66.0 66.9 Investments in fixed assets 4 646 5 154 8 276 7 555 36 911 % of net sales 6.2 6.0 8.2 6.2 25.6 Research and development 3 700 3 700 4 400 6 367 10 094 % of net sales 4.9 4.3 4.4 5.2 7.0 Total assets 74 853 73 814 109 611 146 851 146 417 Personnel, average 146 154 164 184 222 Share Capital, Shares and Key Ratios 1996 1997 1998 1999 2000 Share capital, end of fiscal year Number of shares, end of fiscal year 5 753 537 6 253 537 10 264 537 12 264 537 12 643 377 Key Ratios Earning per share (EPS), FIM (group) -0.25 0.18 0.38 0.24 -0.37 Shareholders´ equity per share, FIM -1.33 -0.66 4.11 7.88 7.73 Turnovers and Prices of Shares in 2000 Market Turnover Turnover Average Lowest Highest Closing Capitalization EUR Shares Price EUR Price EUR Price EUR Price EUR EUR7 27 106 757. 46 3 646 849.00 7.43 4.2 13.5 6.2 78 388 937.40 Publication of Biohit's Interim Reports in 2001 Biohit will publish the interim reports for 2001 as follows: • 1-3/2001: May 9 • 1-6/2001: August 8 and • 1-9/2001: November 7. 6 *) Shareholders´equity negative in 1996 and 1997 7 Market price for capital stock assuming that market price of A-share is the same as that of B-share. 5 BIOH T LETTER FROM THE PRESIDENT During the past decade Biohit has developed into a versatile, globally operating biotechnology company. The needs of high quality research and modern health care require the employment of new equipment, diag- nostic tests and complete analyzing systems composed of them. These needs serve as a guideline for our inno- vations and pioneering work. Our diagnostic tests, the development and production of which are based on the use of biotechnology, guide the development of instru- ments and related software. In 2000 we have concen- trated our efforts on such synergistic niche-areas8 in which we possess a solid research base, product inno- vations, production technologies, know-how, collabo- ration with the academic community, and a global co- operation and customer service network. Biohit is exceptional in many ways. In particular, our management and key personnel are not newcomers in the areas of biotechnology but many of us have acted since the 1970s as internationally renowned pioneers in the business areas of biotechnology and related technologies. We have created standards for research, laboratory work and diagnostics9,10, which have served as examples and bases of success for numerous companies. These stan- dards have promoted research and the develoment of lab- oratory work and diagnostics all over the world. Osmo Suovaniemi, President & CEO Similarily, the majority of Biohit's current personnel have contributed to our development from the very beginning. We have not grown in the shade of other companies but have independently created a strong and stable basis for our success. Biohit is exceptional, compared with many other com- panies, also in that we listed on the New Market -list of the Helsinki Exchanges in June as a company that already operated on the global level. All funds received in con- nection with the directed share issue will be used for the further development of Biohit. During listing the sub- scription price of Biohit's share was EUR 4.5. In January 2000 the share price reached EUR 13.5. During the sec- ond half of 2000 the price varied between EUR 6-7. During 2000 the number of shareholders increased by approx. 50% to over 4,000. Challenges Posed by the Changing World The development trends in research and medicine, and Biohit's preparedness to respond to these challenges affect our vision and the realization of the related goals. Biohit has focused its business on those areas for which we can offer products and services that are based on our innovations and know-how. Our products and technolo- gies are used in different types of laboratories, which car- ry out research and develop new methods, e.g., for the diagnosis of infectious and cancer diseases. Biohit's cur- rent and new products benefit research on microbial and human genomes, and the related diagnostics as well as medical research. 8 Synergistic niche areas refer to narrow and specialized market areas which are closely related with and support each other. 9 Osmo Suovaniemi's inventions: The adjustable mechanical pipette (Finnpipette) and vertical measurement principle and its numerous applications (e.g. Multiskan). Finnpipette and Multiskan are registered trademarks of Labsystems Oy. For example, companies such as Becton Dickinson, bioMérieux, Eppendorf, Johnson & Johnson and 3M use applications of Biohit's electronic liquid handling innovations. 10 Suovaniemi, O. (1994). Automated Instrumentation for Clinical and Research Laboratories - Innovations and Development of Vertical Light Beam Photometers and Electronic Pipettors, Ph.D. Thesis, University of Helsinki. 6 BIOH T The Human Genome Project is expected to be com- Biohit's GP-package, the other diagnostic test kits, as pleted within a couple of years. However, the research well as analyzing systems composed of diagnostics, liquid work undertaken on the functioning of the max. 40,000 handling products, instruments and related software are human genes (Postgenomic Era) is only at its early stage. well-suited for decentralized laboratory diagnostics. The It may well be that the work will not be finished even decentralized laboratory diagnostics is a core prerequisite within decades. For this reason the future poses many for the beginning of the theranostic era16. challenges and much work for basic research and medi- Biohit's GP-package combined with certain drugs of cine, which utilize, e.g., instruments and products needed selected medical companies is a suitable concept for ther- for PCR-11 and HTS-12 methods. The same applies for anostics and highly specific medication. This opens up companies manufacturing this equipment. This area of possibilities for co-operation between Biohit and medical work can be expected to expand when, in addition to companies. It has been estimated that within five years the human genes, also the genes of animals and plant theranostic tests will form a significant part of the markets microbes are studied. for IVD-tests17. Currently, the total size of the IVD mar- In the area of medical diagnostics the trend is strongly kets has been estimated to be approx. USD 20 billion. towards solutions from which the doctor and, especially the patient, benefit. At present POC13 diagnostics is taking Correctly Selected and Sound Strategies a foothold on the markets. Likewise, a shift is taking place from centralized to decentralized laboratory services. The Our understanding of the changes taking place in our ultimate goal is the highly specific treatment of illnesses, business environment enhances the realization of our so-called Evidence-Based Medicine. A prerequisite for vision and the objectives derived from it. In order for us the success of this highly specific treatment is a correct to respond to these changes, the rapidly growing needs diagnosis made before commencing the treatment and the related with the development trends and to find solutions availability of highly sensitive drugs. to these needs, the operating strategies of the different parts of our business idea need to be correctly selected Biohit Responds to the Challenges and sound. So far Biohit has been able to develop simultaneously Biohit currently offers products for the different applica- and successfully its products, production technologies and tions described above. Our goal is to reinforce and speed its global co-operation and customer service network. up the described development trend for examination and Biohit co-operates on the international level with such treatment, which is currently only at its early phase. For multinational companies as Beckman Coulter, Becton example, Biohit's gastric test panel, together with the Dickinson, bioMérieux, Johnson & Johnson, and 3M. related software (GP-package)14 is especially well suited Exports account for approx. 96% of the Group net sales, for the use of general practitioners. The diagnoses, which and the degree of domestic production is approx. 95%. can be made quickly and easily with the GP-package from In research and development we pay special attention a blood sample, complement, and in many cases may to sound basic research and innovations which underlie replace, the inconvenient and expensive gastroscopy15 as our products. We co-operate successfully with scientists the primary method when seeking a diagnosis for the who represent various fields of research. Our aggressive stomach disorders of a patient. The correct diagnosis and patenting strategy ensures, e.g., that our intellectual prop- treatment of a patient suffering from acute or chronic erty remains within the company and the quality of R & stomach disorders and pains is most successful if the doc- D continues to be high. The patented methods and tech- tor can rely on comprehensive and quick laboratory ser- nologies protect us from competition and promote co- vices. This requires the availability of basic laboratory operation with multinational companies. services at doctors' offices and medical centers, and, thus, One of Biohit's additional strengths is that our produc- renders unnecessary the utilization of outside services. tion is not outsourced. However, Biohit uses to a certain Biohit's new research methods, which are targeted to the extent subcontractors which have been tried and found diagnosis of gastrointestinal diseases, represent a new suitable. As a result, we control the most important pro- alternative for certain areas of medicine, namely gas- duction technologies and related costs. Our R & D work troenterology, in which the selection of laboratory tests and pilot production are smoothly linked into our mass has traditionally been very narrow and gastroscopy has production. The capacity of our new, partially automated nearly always been the only diagnostic choice. production plant finished in Kajaani in 2000 enables us to quadruple the current volume of production. A new clean room, which will replace the pilot production of diagnos- tics, will be completed in Helsinki in March 2001. 11 The Polymerase Chain Reaction (PCR) -technique is used for the amplification of small amounts of DNA. 12 High Through-Put Screening (HTS) refers to the study of large amounts of samples. 16 The term theranostics describes an evolving group of products that link 13 Point-of-care (POC) refers to a quick test which is performed close to diagnostics with medical treatment. They are also known by some the patient. companies as predictive medicine. Theranostics may identify which 14 The Gastric Program (GP) -package includes three tests made from a patients would be most suited to a particular drug therapy or could be blood sample: Determination of the Pepsinogen I- and Gastrin-17 con- used to provide feedback on how well a drug is working in order to tai- centrations and H. pylori -antibodies. On the basis of the test results lor the optimum treatment regimen. Many theranostic products need to the computer program (GastroSoft®) makes a diagnosis of atrophic be POC tests. In many cases, the results of the tests need to be avail- gastritis and the H. pylori -infection. The program also indicates the able quickly and at the patient's side, in order to influence therapy. patient's risk to suffer from gastric cancer or peptic ulcer. Moreover, 17 In Vitro Diagnostic (IVD) -test refers to a test made from a patient the program makes recommendations for the treatment of the H.pylori sample (e.g. blood sample). -infection and further examinations (gastroscopy and the determination of the concentrations of vitamin B12 and homocysteine from a blood sample). 15 Gastroscopy is used for the examination and assessment of the mucous membrane of the stomach and small intestine. Biopsies are taken from the mucous membrane for laboratory studies in connection with gas- troscopy. 7 BIOH T Biohit has also a globally established sales and mar- positive impact on the growth and profitability of the keting network. Biohit's seven subsidiaries and 60 main company. This applies also to the liquid handling prod- distributors with their own customer service networks ucts, which are targeted to new market segments and were contribute to reinforcing the Biohit brand name and finished in 2000. Biohit's image on the international markets. Our co-oper- During 2000 Biohit's significant investments in prod- ation with multinational companies promotes our prod- ucts, production and marketing and the increase of the ucts on those market segments to which our innovations number of personnel has paved the way for strong and would not otherwise have access. profitable future growth. For example, the fact that we are Our current products as well as those finished in 2000 able to offer solutions and products which are based on are in the position of entering markets, the overall poten- our numerous innovations, know-how and modern tech- tial of which has been estimated to be approx. FIM 40 nologies, for the needs and development of basic and billion. This potential is comprised of the approx. FIM 10 industrial research and modern medice, serve as a basis billion current market value for liquid handling products, for our vision. instruments employing the vertical measurement princi- I express my sincere gratitude to Biohit's old and new ple and their accessories, as well as the over FIM 30 personnel in Finland and abroad, to our over 4,000 share- billion market potential for diagnostic tests18. We face a holders and other interest groups for the trust you have challenging future with regard to benefiting from and demonstrated towards Biohit. In a changing world we are increasing the value of these markets and their potential. engaged in valuable and successful co-operation which benefits research and human welfare. Results of Our Co-Operation in 2000 Helsinki, February 1, 2001 In 2000 the net sales of the Biohit Group totalled to MFIM 144.2. Despite an exceptional gross investment of MFIM 42.0 the operating loss of the Group totalled to only MFIM 2.8. The cash flow provided by operating activities was MFIM 7.2 positive. When taking into con- Yours sincerely, sideration the MFIM 10.1 investments in research and development, Biohit's investments in the future totalled to MFIM 52.1 in 2000. In 1999 the average number of per- sonnel totalled to 184 and to 222 in 2000. The current number of personnel totals to 265 of which 90 work in the subsidiaries, 85 at the Kajaani plant and 90 at the head- quarters in Helsinki. The net sales were primarily gener- ated by the sales of liquid handling products. The com- mencement of the sales of diagnostic tests, instruments Osmo Suovaniemi, M.D., Ph.D. and complete analyzing systems are expected to have a President and CEO 18 MeritaNordbanken Research 6.3.2000. 8 BIOH T BIOHIT GROUP gy for the screening and studying of genes, has been developed by using multichannel liquid handling products Biohit's Competence and Business Idea and their accessories. These applications have been auto- The experience, skills and accumulated intellectual assets mated recently by developing liquid handling and mea- of Biohit's personnel are our most crucial resources. surement robots, and related software for the interpreta- Biohit's current management and certain key persons tion of results. The automation of the PCR-technique and developed and commercialized successfully two inven- DNA-chip technology enables the simultaneous studying tions made by Dr. Osmo Suovaniemi in the 1970s. These of even tens of thousands of genes. The purpose of this inventions have served as examples for numerous smaller mass screening is, e.g., to develop highly specific drugs and large companies all over the world. The inventions and study the functioning of genes in connection with dif- were the single- and multichannel, adjustable, mechanical ferent illnesses. pipettes (Finnpipettes19) and vertical light path photome- Although the Human Genome Project is expected to be try together with its instrument applications (Multi- completed within a couple of years the research work on skan20). These inventions have been utilized so exten- the functioning of the max. 40,000 human genes sively that they can justifiably be called global industrial (Postgenomic Era) is only at its early stage in the world. standards. It may well be that the work will not be finished even The liquid handling instruments, systems and their within decades. For this reason the future poses many accessories have served as the bases for Labsystems and challenges and much work for basic research and medi- joint venture Eflab, the companies founded by Dr. cine, which utilize, e.g., instruments and products needed Suovaniemi in the 1970s, and subsequently for the global for the PCR- and HTS-methods. The same applies for businesses of numerous companies. The value of the companies manufacturing this equipment. This area of global market for products based on the above innova- work can be expected to expand when, in addition to tions and accessories exceeds today USD 1.5 billion human genes, also the genes of animals and plant annually. For instance, by using these innovations, their microbes will be studied. microplate application and accessories as examples and Vertical measurement, multichannel liquid handling later by automating vertical measurement and liquid han- products, their applications and accessories have, since dling processes, the net sales of the Swiss Tecan Group the 1970s, enhanced the development of enzyme reached rapidly a USD billion level. A few years ago the immunoassay methods for research and, in specific, for company became publicly listed. The current market val- the diagnosis of cancer and infectious diseases. The size ue of Tecan is USD 1.14 billion, which is 6.9 times greater of the market for these products totals to currently approx. than its net sales in 2000. USD 10 billion annually. It has been estimated that the The aforementioned annual business totalling to USD value of the sales of immunoassay-related services by 1.5 billion consists of different types of products used in clinical laboratories in the U.S., Japan and Europe exceed research and, e.g., immunodiagnostics. Especially fast, USD 40 billion annually. even at an annual rate of 25-30%, are growing the markets Biohit has finished diagnostic tests for the immunoas- for microplate instruments and their disposables used in say markets for the determination of Pepsinogen I, PCR-21 and HTS22-applications. The Nobel prize winning Pepsinogen II and Gastrin-17 concentrations, the H.pylori production method of monoclonal antibodies23 and the -infection as well as the SLE and celiac diseases. It has PCR-technique24 utilize applications related with multi- been estimated that the overall market potential for these channel liquid handling devices and vertical measurement tests, the test for diagnosing lactose intolerance and mon- principle together with their accessories. oclonal antibodies totals to USD 5.0 billion25. Biohit's liq- Likewise, the rapidly developing DNA-chip technolo- uid handling products, diagnostic tests, instruments and related software form complete analyzing systems. Components of these systems, e.g., instruments based on vertical measurement (e.g. spectrophotometer and fluo- rometer), liquid handling products, microplates and other products based on Biohit's technologies and inventions are used in connection with PCR-methods and DNA -chip technologies. Biohit's aim is to gain a significant market position also in these rapidly growing areas. Since its foundation in 1988 Biohit has established itself on the global markets with its innovative, high tech- nology liquid handling devices. During the past decade Biohit has invested in R & D, launched new products on the global markets, invested in production technologies, automation and quality control and established an exten- sive international sales and marketing network. The capacity of the personnel has been strengthened and 19, 20 Finnpipette and Multiskan are trademarks of Labsystems. 21 The Polymerase Chain Reaction (PCR) technique is used for the ampli- fication of small amounts of DNA. 22 High Through-Put Screening (HTS) refers to the study of large amounts of samples. 23 Milstein and Köhler received the Nobel prize for inventing monoclonal antibodies in 1984. 24 The PCR-technique was invented in 1983 by Kary Mullis, who The long-term experience, skills and specialization of received the Nobel prize for the invention in 1993. personnel are Biohit's most important resource. 25 MeritaNordbanken Research 6.3.2000 9 BIOH T diversified through collaboration with leading researchers and peptic ulcer from blood samples have guided the at universities and research institutions. The commitment development of the liquid handling products, instruments and entrepreneurship of the personnel, members of the and related software into synergistic analyzing systems. board and scientific advisors have been strengthened These systems as well as their components are expected to develop into dominant designs and industrial standards on the global markets. As a result of the realization of Biohit's first challeng- ing vision, which extended to the end of the 1990s a new, ambitious vision has been set until 2005. Its central idea is to actively broaden Biohit's business portfolio with the help of the liquid handling products, which have devel- oped into industrial standards and global market leaders, to new synergistic product areas. Biohit's objective is to transfer these new areas of analyzing systems from the R&D phase to the global business phase via its strong net- work of specialists, co-operation partners and customer service organization. These new solutions are, as killer innovations and dominant designs, expected to replace older products and services on the markets. Intellectual Assets Biohit focuses solely on those business areas in which it possesses a reliable multidisciplinary scientific base, tech- nological expertise and inventions protected by patents. The management and key personnel of Biohit have numerous patents and a 10 - 25 years' experience in the R & D, manufacture and international marketing of liquid handling and diagnostic products, instruments and ana- lyzing systems based on these product groups. The expe- rience of Biohit's President and CEO, Dr. Osmo Suovaniemi, is illustrated, e.g., by the fact that he has been awarded most patents in Finland26 and a few hundred abroad in the fields of medical diagnostics, optics and mechanics. Biohit's numerous scientific collaborators are experts in the fields of medicine, molecular biology, physics and chemistry. Biohit has developed into one of the world´s leading manufacturers of liquid handling products in the 1990s. The global market share of Biohit's electronic liquid handling devices is 70%. through ownership of shares and the option program tar- geted to the entire personnel. In the early 1990s Biohit decided to focus its opera- tions on liquid handling products, and in addition, to con- tinue R & D work to create primarily tests for the diagno- sis of cancer and laboratory instruments for new business areas. As of 1999 Biohit's business idea has been to focus on the research and development, production and interna- tional marketing of liquid handling products, diagnostic tests and laboratory instruments as well as on analyzing systems formed on the basis of these synergistic three product lines. Biohit's first vision to develop into one of the leading manufacturers of liquid handling products in the world in the 1990s has been realized. Biohit's share of the global market for electronic liquid handling products is approx. 70%, and the liquid handling product range is currently the widest in the world. Biohit is also the leading manu- facturers of electronic OEM -liquid handling devices. Throughout the 1990s Biohit has successfully devel- Biohit's business idea is to develop, manufacture and oped its holistic vision on diagnostics, which, together market liquid handling products, diagnostics, instru- with liquid handling products, instruments, related soft- ments as well as analyzing systems composed of these ware and services form complete analyzing systems. The product groups. diagnostic tests which are based on biotechnology and include, e.g., tests for the determination of the H. pylori - infection, atrophic gastritis and the risk for gastric cancer 26 Tekniikka ja Talous 8.2.2001, p. 11. 10 BIOH T Biohit's key personnel together with scientific advisors representing different academic communities apply in the innovation work, the basic and applied research and R & D, e.g., knowledge of disciplines such as biology, chem- istry, physics, medicine and different areas of high tech- nology. This multidisciplinary approach has produced valuable results for the advancement of research and health care all over the world. The comprehensive patent protection in Finland and abroad, which has resulted from Biohit's aggressive patenting policy, as well as different agreements, have formed a solid and reliable basis for Biohit's growth and co-operation with other companies on the global level. Biohit's patents, the high quality of products and accurate deliveries have resulted in the continuation of long-term co-operation with multinational companies such as Beckman Coulter, Becton Dickinson, bioMérieux, Johnson & Johnson and 3M. Also for this reason, the sev- en sales and marketing subsidiaries of Biohit abroad have continued their growth and favorable development. Likewise, the distributor network comprised of approx. 60 main distributors worldwide has increasingly invested in the sales and marketing of Biohit's products. Biohit will continue to pay special attention to the development Biohit's research and development combine the expertise and protection of its multidisciplinary immaterial assets of various fields into integrated know-how. The picture also in the future. displays the development of Biohit's Midi Plus -pipetting At the end of 2000 Biohit possessed altogether 34 aid. patents of which 20 were Finnish, 10 U.S. and 4 European patents. In 2000 Biohit was awarded the following Finnish patents in the business area of liquid handling: FI 104885, FI 105782 and FI 105783. In the business area of diagnostics Biohit was awarded the following Finnish & D is the ability to react quickly to new customer needs patents: FI 104737 and FI 106212. In accordance with its and product ideas. The research and development of aggressive patenting policy Biohit filed numerous patent Biohit's liquid handling and diagnostics products are car- applications in 2000 in Finland, most European countries, ried out in Helsinki. In 2000 Biohit's R & D investments Japan, Russia and the U.S. totalled to MFIM 10.3. Research and Development In the area of liquid handling Biohit continued to invest in the development of new pipettor generations. Biohit´s R & D combines expertise in various fields into This development work is based on the strategy in which integrated know-how. Our employees are experts in the new market segments have been identified. These seg- fields of biotechnology, electronics, medicine, chemistry, ments differ from each other in terms of the area of appli- optics, mechanics and precision injection molding tech- cation, performance and price. nology. Another strength in Biohit's multidisciplinary R Biohit's new production plant was taken into use in Kajaani in fall 2000. The new premises enable at least to quadruple the current production volume of liquid handling products and accessories. 11 BIOH T In the area of diagnostics the development of the test duction volume of liquid handling products and plastics. panel for screening the risk of gastric cancer and peptic As to the production of diagnostics a new clean room unit, ulcer proceeded according to plans. In fall 2000 Biohit's which will replace the current pilot production, will be test panel passed successfully the clinical evaluation car- completed in Helsinki in March 2001 ried out at the Jorvi Hospital in Finland. In January 2001 Biohit filed a patent application for a computer product International Sales and Marketing related with the gastric test panel. The program The customer base of Biohit consists of leading laborato- (GastroSoft®) related with the panel prints for the doctor ries of research institutes, universities, those of medical a diagnosis of the H. pylori -infection and the possibly and biotechnology companies and hospitals in the world. related atrophic gastritis and provides information on the Also, the food industry and environmental control labora- patient's risk for gastric cancer or peptic ulcer compared tories are important customers for Biohit. In addition, with normal population. The program gives also a recom- Biohit has numerous OEM-customers for which Biohit mendation for possible further treatment, i.e., gastroscopy manufactures on the basis of its technologies tailor-made or the determination of the vitamin B12 and homocysteine products. Multinational companies such as Beckman concentrations from a blood sample. In 2000 Biohit's tests Coulter, Becton Dickinson, bioMérieux, Johnson & for the diagnosis of lactose intolerance and SLE were also Johnson and 3M complement their own product ranges successful in clinical evaluations. Finally, also the test and diagnostic systems with Biohit's OEM-products. panel for diagnosing celiac disease was complemented Also, Biohit's German competitor Eppendorf has from the with a new test and became ready for sales. very beginning been an important customer for Biohit's Production liquid handling products. Eppendorf's new generation of mechanical pipettors employs one of Biohit's patents. Biohit is currently one of the leading manufacturers of liq- The international co-operation and customer service uid handling devices in the world. The degree of domes- network for Biohit's liquid handling products, diagnos- tic production is approximately 95%, and approx. 96% of tics, instruments and systems consists of: sales is generated outside of Finland. • Subsidiary companies of Biohit Plc. in France, The liquid handling products and the disposable pipet- Germany, Italy, Japan, Russia, the U.K. and the U.S. tor tips are manufactured according to the ISO 9001 qual- The companies are located on Biohit's most important ity system standards in the Kajaani and Helsinki plants. market areas and they act as sales and marketing units The main production plant is located in Kajaani whereas for Biohit's products as well as offer maintenance, cal- the Helsinki production unit serves as a pilot plant. The ibration and training services locally. In addition to diagnostic tests are also produced in Helsinki. Biohit products, the units engage in the sales of OEM- Biohit's new facilities for the assembly of liquid han- and private label -products. dling products and injection molding of plastics were tak- • Biohit's 60 main distributors, which together with their en into use in Kajaani in fall 2000. The injection molding local distributors form a network of 450 members cov- department produces precision molded plastic compo- ering 70 countries. nents, pipettor parts and disposable pipettor tips. • The global distribution networks of Biohit's most Investments were made especially in the automation of important OEM- and private label -customers. injection molding, materials handling and production. The In 2000 international business accounted for approx. new premises enable at least to quadruple the current pro- 96% of the overall Group net sales (MFIM 144.2). The share of subsidiaries of Group net sales was 80%. 53% of the net sales were generated in Europe, 19% in the Americas and the remaining 28 % primarily in Asia. The net sales consisted primarily of the sales of liquid han- dling products. During 2000 Biohit invested especially in the rein- forcement of its marketing network in the U.S. and Russia. Moreover, Biohit entered into negotiations with several significant co-operation partners in order to com- mence the international launch of the diagnostic and instrument product ranges as well as complete analyzing systems. In 2000 Biohit began to offer more extensive maintenance services in its foreign subsidiaries for Biohit-labelled pipettors and also for those manufactured by other companies. In connection with this, Biohit con- tinued to develop and harmonize the international mainte- nance network for its liquid handling products. Changes in Corporate Structure in 2000 Biohit Systems, Inc., the U.S. subsidiary of Biohit Plc., acquired on April 25, 2000 the entire share capital of the U.S. company Vangard International, Inc., which has act- ed as a distributor of Biohit's products. As a result of the acquisition Biohit Plc. received all business activities of Vangard International, Inc. including the sales and mar- keting of Biohit products in the U.S. Through the acquisi- tion Biohit clarified and reinforced the sales and market- ing as well as the maintenance and calibration services for its products in the U.S. Assembly of Biohit's electronic liquid handling products. 12 BIOH T LIQUID HANDLING The liquid handling product range designed, developed and manufactured by Biohit is the widest in the world today. The range encompasses electronic and mechanical pipettors, disposable pipettor tips, decontamination prod- ucts and accessories. Moreover, Biohit offers mainte- nance, calibration and training services through its sub- sidiary and distribution network. Biohit's liquid handling products comply with international standards of quality and have been awarded the GS27- and CE28-certificates. Since the early 1990s Biohit has developed the elec- Biohit participated in the Pittcon exhibition in March tonic single- and multichannel liquid handling product 2000. This special event on laboratory analytics is in its family and, subsequently, in the early 1990s the mechan- field the most important in the U.S. ical single- and multichannel pipettor family and their dis- posable tips. Currently, Biohit's electronic pipettors hold an approx. 70% of the global markets. Biohit is also the leading manufacturer of electronic OEM-pipettors in the It was decided on December 14, 2000 that Locus world. Biohit's OEM-customers include companies such genex Oy, the subsidiary company of Biohit Plc. special- as Becton Dickinson, bioMérieux, Johnson & Johnson izing in the development of diagnostics, will be integrat- and 3M. In the area of mechanical liquid handling prod- ed more closely with the Biohit Group. The extraordinary ucts Biohit possesses an approx. 8% share of the world general meeting of Locus genex Oy decided on Dec. 14, markets and in the area of disposables an estimated 2000 to place the company in voluntary liquidation after slighty under 2% share. which the company will be dissolved and all business During the past couple of years the maintenance of liq- operations transferred to Biohit Plc. The purpose of the uid handling products has become a new, profitable busi- reorganization is to transfer the business areas of liquid ness area. The calibration laboratory for Biohit's liquid handling, instruments and diagnostics under one company handling products has been accredited by FINAS29. Due to and brand name and in this way gain more efficiency in tightening quality control regulations customers are the marketing and distribution of the said products. The increasingly using accredited calibration laboratories. So reorganization will also eliminate overlapping activities far the annual 10-20% growth of Biohit's net sales has pri- and cut administrative expenses. The aim is to complete marily resulted of liquid handling products and related the reorganization by the end of 2001. services. Biohit Plc. acquired on Dec. 29, 2000 44% of the Since its establishment in 1988 Biohit's management Russian company Finnbio Ltd., which acts primarily as and key personnel have employed the aggressive innova- the distributor of Biohit products in Russia and other CIS- tion and patenting policy developed and applied by CEO countries. As a result of the acquisition Biohit's owner- Osmo Suovaniemi already in the 1970s and 1980s. At that ship of the shares and votes increased to 100%. Prior to time the policy served as a model even for a number of the acquisition Biohit's shares and votes totalled to 56%, large Finnish companies. Biohit's current patents and which resulted from Biohit acquiring 100% of the Finnish patent applications feature numerous innovations, which company Oy Finio Ab on May 15, 2000. together with the technologies developed and employed Biohit Plc. sold on Dec. 29, 2000 its majority share, by Biohit and tested by various multinational companies, i.e., 51% of the U.K. company Wolf Laboratories, Ltd. enable to offer many new products for different market The majority share was acquired by the minority share- segments. The current and new market segments vary in holders at the time. Wolf Laboratories Ltd. has acted in terms of the area of application and performance of the the U.K., e.g., as the distributor of Biohit products as well products, as well as price. as the laboratory products of other manufacturers. The The current sales of Biohit's liquid handling products purpose of the transaction was to clarify the Biohit Group are targeted to different areas of use, the value of the mar- structure so that the Group companies will concentrate on ket of which, together with disposable tips, totals to USD the manufacture and sales of Biohit products. Wolf 500 million annually. This value is comprised of the sales Laboratories Ltd. will continue after the transaction, of over 1 million mechanical and approx. 50,000 elec- together with Biohit's U.K. subsidiary Biohit Ltd., as the tronic pipettors as well as over 5 billion disposable tips local distributor for Biohit products in the U.K. each year. It can be expected that the increasing number of electronic liquid handling applications to be integrated into automated laboratory instruments and analyzing sys- tems, and the tightening safety, quality control and effi- ciency requirements will considerably reinforce the demand for electronic liquid handling devices in the future. 27 Geprüft Sicherheit (GS): A German product safety standard. 28 Les Communautés Européennes (CE) -marking is a guarantee for authorities, importers and sellers that the prooduct fulfils the require- ments set by the European Union. 29 The Finnish Accreditation Service (FINAS), a part of the Center for Metrology and Accreditation, is a body operating under the Ministry of Trade and Industry. FINAS is a member of the European Co-operation for Accreditation (EA). 13 BIOH T The range of liquid handling products developed and manufac- tured by Biohit is the widest in the world. The range encompasses electronic and mechanical devices and disposable tips. Currently Biohit's electronic and mechanical liquid and ergonomic. The microprocessor-controlled electronic handling products continue to have a significant market pipettors contribute to minimizing human error when potential. By maintaining the level of its existing products pipetting and improve the accuracy and precision of the Biohit should be able to hold its annual growth level of overall liquid handling performance. 20% and even increase its shares on these traditional mar- The Biohit Proline® -electronic pipettors are available kets. When taking into consideration all Biohit's possible in single- and multichannel configurations and cover the existing and new market segments during 2001 and 2002, volume ranges for 0.2 µl30 to 25 ml. They have opened up it has been estimated that the market potential for Biohit's new dimensions in liquid handling technology in terms of liquid handling products totals to slightly over USD 1.0 precision, ergonomy and functionality. The ergonomic billion. Between 2002-2004 Biohit's objective is to cap- design and light weight of the electronic pipettors take ture such new market segments for liquid handling prod- much of the strain out of pipetting and, thus, help to pre- ucts, which Biohit can serve with its existing innovations, vent fatigue and the development of work-related upper technologies and know-how. In this case it is estimated limb disorders (WRULDs). For example, the effort that the market potential for current and new market seg- required for one pipetting action with a mechanical pipet- ments will reach USD 1.5 billion. tor may even be the equivalent of moving a load of sever- al kilograms with the thumb, whereas using an electronic Electronic Liquid Handling Products pipettor requires only a fiftieth of this effort.31,32,33,34,35,36 Biohit's electronic liquid handling products combine elec- According to Hoskins et al. the Occupational Safety and tronics, optics, fine mechanics and material technology so Health Administration (OSHA) in the U.S. has deter- as to simplify and render liquid handling more efficient mined that Repetitive Strain Injuries (RSIs) are the largest single category of injury in the workplace37. 30 1 µl = one millionth part of a liter. 31 Suovaniemi, O. (1994). Automated Instrumentation for Clinical and Research Laboratories - Innovations and Development of Vertical Light Beam Photometers and Electronic Pipettors, Ph.D. Thesis, University of Helsinki. 32 Björkstén, M.G., Almby, B. and Jansson, E.S. (1994). Hand and Shoulder Ailments among Laboratory Technicians Using Modern Plunger-Operated Pipettes. Applied Ergonomics 25: 88-94 33 Fredriksson, K. (1995). Laboratory Work with Automatic Pipettes: A Study on How Pipetting Affects the Thumb, Ergonomics 38 (5): 1067- 1073. 34 McGlothlin, J.D. and Hales, T.R. (1995). NIOSH (National Institute of Occupational Safety and Health) Health Hazard Evaluation Report. 35 Hodgson, E. (1996). Work Related Upper Limb Disorders and the Laboratory. World Directory of Environmental Testing, Monitoring and Treatment. 36 David, G. and Buckle, P. (1997). A Questionnaire Survey of the Ergonomic Problems Associated with Pipettes and Their Usage with Biohit has paid special attention to safety and ergonomic Specific Refernce to Work-Related Upper Limb Disorders. Applied aspects in its development of liquid handling products. Ergonomics, Vol. 28, No. 4: 257-262. The design and light weight of Biohit's electronic pipet- 37 Hoskins, D.B. and Erickson, J. (1998). Laboratory Ergonomics, the Wake-Up Call: A Case Study on How One Company Relieved Stress tors contribute to reducing the risk of work-related and Strain on Its Employees, Chemical Health and Safety, upper limb disorders. January/February. 14 BIOH T system. To support the safety aspects in pipetting Biohit's range of disposables includes, e.g., filter tips. Biohit holds a nearly 2.0% of the global market for disposable tips. Maintenance and Training Services As part of its product and marketing strategies Biohit pro- vides maintenance, calibration and training services through its subsidiary and distributor network. With these services we are acquiring new long-term customers, increasing customer satisfaction and loyalty, and improv- ing its image and result. Liquid Handling in 2000 In the area of liquid handling Biohit continued to invest in the development of new pipettor generations. This devel- opment work is based on Biohit's liquid handling product strategy in which new market segments have been identi- fied. These segments differ from each other in terms of the area of application, performance and price. In its development of liquid handling products Biohit has paid special attention to the safety and ergonomic The eLINE® is a new generation of electronic pipettors, aspects of pipettors, which contribute, e.g., to reducing which offers the latest technology in the field of hand- the risk of work-related upper limb disorders44,45. held liquid handling devices. In February 2001 the eLINE® received an honorary mention in the Pro Finnish Design 2001 competition arranged by Design Forum Finland. In order to improve further the safety of pipetting, most of Biohit's electronic pipettors are equipped with fil- ters which protect the internal components of the pipettor from contamination and, as a result, the sample from car- ryover, e.g., in genetic studies38,39. In addition to providing enhanced ergonomy and safety, the electronic pipettor is, as a result of the microprocessor controls, an extremely versatile tool for numerous tasks: one tool can perform pipetting, multiple dispensing and diluting, and the elec- tronic pipettor can also be used for mixing liquid samples. Mechanical Liquid Handling Products Today, mechanical liquid handling products continue to be some of the most commonly used tools in laboratories. The factors contributing to the popularity of the mechan- ical pipettors are not only that laboratory personnel are In 2000 Biohit finished and launched the entire ePET® - used to them but also their lower price compared with the pipettor range, which is especially targeted, in terms of electronic devices. price, performance and software, for the needs of Biohit meets its customers' needs for non-electronic research laboratories. products with the range of Biohit Proline® mechanical pipettors. The mechanicals cover the fixed and adjustable single- and multichannel models within the 0.1 µl - 5 ml 38 Kolari, M., Mannonen, S., Takala, T., Saris, P., Suovaniemi, O. and volume range. In its development of mechanical pipettors Salkinoja-Salonen, M.S. (1999). The Effect of Filters on Aseptic Biohit has again paid special attention to ergonomic Pipetting Lifetime of Mechanical and Electronic Pipettors and Carryover during Pipetting. Letters in Applied Microbiology 29: 123- aspects. The light weight and smooth plunger action of the 129. pipettors facilitate the handling of liquids. Moreover, as is 39 Suovaniemi, O. (2000). Finnish patent 104885: Filter. the case with electronic pipettors, most of Biohit's 40 Kolari, M., Mannonen, S., Takala, T., Saris, P., Suovaniemi, O and mechanical pipettors are equipped with filters40,41. Today, Salkinoja-Salonen, M.S. (1999). The Effect of Filters on Aseptic Pipetting Lifetime of Mechanical and Electronic Pipettors and Biohit's share of the global market for mechanical Carryover during Pipetting. Letters in Applied Microbiology 29: 123- pipettors is approx. 8%. 129. 41 Suovaniemi, O. (2000). Finnish patent 104885: Filter. Disposable Tips 42 Suovaniemi, O. (1994). Automated Instrumentation for Clinical and Research Laboratories - Innovations and Development of Vertical The pipettors and injection molded plastic disposable tips Light Beam Photometers and Electronic Pipettors, Ph.D. Thesis, manufactured by Biohit form together a reliable sys- University of Helsinki. tem42,43. Biohit guarantees the precision and accuracy of its 43 Mannonen, S., Tiusanen, T. and Suovaniemi, O. (2000). Major Sources pipettors when customers use tips developed and manu- of Error of Air Displacement Pipettors. International Labmate, April. 44 Mannonen, S. and Syrjä, K. (2000). Safety in Pipetting. International factured by Biohit. Further development of pipettor tips is Labmate, February. always an integral part of the R & D work on the pipetting 45 Vaughton, R (1999). Taking the Strain Out of Pipetting. International Biotechnology Laboratory, September. 15 BIOH T The accreditation of the calibration laboratory for liquid handling products reinforces Biohit's position as one of the leading manu- facturers of liquid handling devices in the world. In 2000 Biohit finished the development of the new Biohit also finished and launched the electronic eLINE®-, ePET®- and ViscoPet -pipettor ranges. The ViscoPet pipettor, which has been specifically designed to development work followed Biohit's product strategy to meet the requirements of those laboratories in which it is segment the pipettor market according to the different necessary to pipette viscous liquids with high levels of needs of customers and cost sensitivity. accuracy. The use of special long-reach Viscotip capillar- The eLINE® is a new generation of electronic pipet- ies makes the ViscoPet particularly suitable for the needs tors, which offers the latest technology in the field of of laboratories processing food and dairy products. hand-held liquid handling devices. The range was In the area of electronic liquid handling Biohit contin- designed to meet the most demanding pipetting applica- ued the development of OEM-products, which comple- tions offering, thus, e.g., eleven liquid handling protocols ment the product ranges and diagnostic systems of other for the various needs of today's laboratories. The micro- companies. For example, Biohit developed for Beckman processor-controlled system and the novel construction of Coulter an electronic HbA1c pipettor. Moreover, the the eLINE®-pipettors enable maximum liquid handling Remote Control (RC) -unit developed by Biohit, which is performance with high levels of accuracy and precision. a front-end for different automated liquid handling instru- The ergonomic design of the eLINE® together with the mentation and robots, serves the development work of unique electronic tip ejection are examples of Biohit's automatic instruments of other companies and that of continuous efforts to improve further the ergonomy and Biohit. Biohit continued also to develop further the dis- competitiveness of pipetting. posable pipettor tips and their production with new and The eLINE® received an honorary mention on Feb. 1, efficient injection molding tools and robots. 2001 in the Pro Finnish Design 2001 competition The calibration laboratory for liquid handling devices arranged by Design Forum Finland, and the product was of Biohit Plc. was accredited on March 20, 2000 as a subsequently displayed at the Pro Finnish Design 2001 result of the evaluation made by the Finnish Accreditation Exhibition. The first models of the eLINE® were Service (FINAS), a member of the European Co-opera- launched in February 2001. tion for Accreditation (EA). The accreditation of the cali- In 2000 Biohit finished and launched the entire bration for liquid handling products performed in the pro- ePET® -pipettor range, which is a cost effective alterna- duction plants in Helsinki and Kajaani reinforces Biohit's tive to electronic pipetting. The range is especially target- market position as one of the leading manufacturers of ed, in terms of price, performance and software, for the liquid handling devices in the world. There exist only two needs of research laboratories. The ePET® can perform accredited calibration laboratories in the world of compa- all the basic pipetting functions, e.g. dispensing and dilut- nies manufacturing liquid handling devices of which ing, and it is intended as a more ergonomic alternative to Biohit's laboratory is the most accurate within the follow- the high-priced end of mechanical pipettors. ing scope of accreditation. 16 BIOH T The Measurement Range and Measurement Capability of DIAGNOSTICS the Calibration Laboratory of Biohit Plc. In the business area of diagnostics Biohit develops, man- Quantity Measurement Measurement ufactures and markets enzyme immunoassay (EIA) - Range Capability (+/-) based test kits and monoclonal antibodies (MAbs) for the screening and detection of different types of disease. Volume 0.1-5.0 µl 0.015 µl Cancer diagnostics, and particularly tests for screening 10 µl 0.025 µl and detecting the risk of gastric cancer and peptic ulcer 50 µl 0.080 µl together with related software (the Gastro Program -pack- 100 µl 0.100 µl age), represent a core diagnostic product area for Biohit. 200 µl 0.100 µl Moreover, Biohit offers a test panel for the detection of 500 µl 0.520 µl celiac disease. Biohit's tests for the determination of lac- 1000 µl 0.520 µl tose intolerance and systemic lupus erythematosus (SLE) 5000 µl 3.600 µl have been successful in clinical evaluations. Gastric Test Panel As a result of the accreditation Biohit is able to offer to its Gastric cancer is one of the most frequent and lethal customers world-wide calibration certificates for liquid malignancies in the world today. However, early detection handling devices, which are based on national and inter- of this type of cancer is difficult, and in many countries national, traceable measurement standards. The traceable the five-year survival rate is less than 20%47. The occur- calibration certificates form already now an important rence of gastric cancer is especially high in certain parts part of the reliable analysis services provided by laborato- of the world, e.g., in Japan and Asia in general. At present ries.46 As a result of the accreditation, Biohit is able to ful- the only way to successfully treat gastric cancer is through fil the international traceability requirements set for liquid early detection, in which case the survival rate is 90%. If handling devices. The number of Biohit's accredited cali- the disease is diagnosed at a latter stage, the survival rate bration laboratory is K041. is as low as 10-15%. The unique test panel for screening the risk of gastric cancer of the entire stomach and peptic ulcer48 from blood and tissue samples has been researched and developed by Biohit and its scientific collaborators for more than 10 years49,50. The development of the test panel is based on studies51,52,53, in which the prevalence of premalignant and malignant lesions in the stomach of ca. 22,000 males in Finland has been investigated54,55,56. Through the blood sample analyses of the test panel the Helicobacter pylori (H. pylori) -antibodies, the Pepsinogen I- and II -concentrations and the Gastrin-17 - concentration can be determined. The biopsy sample analyses cover the determination of the cyclooxygenase-2 -protein (COX-2). 47 Wanebo H.J., Kennedy B.J., Chmiel J., Steele G.J., Winchester D. and Osteen R. (1993). Cancer of the Stomach. A Patient Care Study by the American College of Surgeons. Ann. Surg. 218:583-592. 48 Peptic ulcer refers to both gastric ulcer and duodenal ulcer. 49 Härkönen M., Sande N., Sipponen P., Laxén F., Suovaniemi O. and Wadström T. Screening of Early Gastric Cancer. Laboratory Medicine 98. XXVI Nordic Conference on Clinical Chemistry, Turku, 6.-10.6. 1998. 50 Sipponen P., Kekki M., Haapakoski J., Ihamäki T. and Siurala M. (1985). Gastric Cancer Risk in Chronic Atrophic Gastritis: Statistical Calculations of Cross-Sectional Data. Int. J. Cancer 35: 173-177. 51 Tamm A., Villako K., Härkönen M. and Karonen S.L. (1984). Serum Pepsinogen I and the State of Gastric Mucosa in an Estonian Population Sample. Scand. J. Gastroenterol 19:1091-1094. 52 Kekki M., Samloff I.M., Varis K. and Ihamäki T. (1991). Serum Pepsinogen I and Serum Gastrin in the Screening of Severe Atrophic Corpus Gastritis. Scand. J. Gastroenterol. Suppl. 186:109-116. 53 Varis K., Kekki M., Härkönen M., Sipponen P. and Samloff I.M. (1991) Serum Pepsinogen I and Serum Gastrin in the Screening of Atrophic Pangastritis with High Risk of Gastric Cancer. Scand. J. Gastroenterol Suppl. 186:117-123. 54 Varis K., Taylor P.R., Sipponen P., Samloff I.M., Heinonen O.P., Albanes D., Härkönen M., Huttunen J.K., Laxén F. and Virtamo J. (1998). Helsinki Gastritis Study Group. Gastric Cancer and Premalignant Lesions in Atrophic Gastritis: A Controlled Trial on Effect of Supplementation with Alpha Tocopherol and Beta-Carotene. Scand. J. Gastroenterol. 33: 294-300. 55 Varis K., Sipponen P., Laxén F., Samloff I.M., Huttunen J.K., Taylor P.R., Heinonen O.P., Albanes, D., Sande N., Virtamo J. and Härkönen M. (2000). Implications of Serum Pepsinogen I in Early Endoscopic Diagnosis of Gastric Cancer and Dysplasia. Scand. J. Gastroenterol. 46 Mannonen, S. and Riikonen, S. (2000). Accredited Calibration and 9:951-956. Future Demands for Pipettors. International Biotechnology Laboratory, 56 Sipponen, P. and Marshall, B.J. (2000). Gastritis and Gastric Cancer - April. Western Countries. Gastroenterol. Clin. North. Am. 29:579-592. 17 BIOH T the changes. When using the Pepsinogen- and Gastrin-17 -tests together (combined with the H. pylori -test) the severity of the atrophy changes of all topographic types of gastritis can be predicted without gastroscopy and biopsy samples. Severe atrophic gastritis in the corpus area of the stom- ach leads to metabolic disturbances, anemia, neurological damages and an increased risk for dementia. This is due to the fact that atrophic gastritis hinders the absorption of vitamin B12 and leads to a deficiency of the said vitamin. The deficiency of vitamin B12 leads to disturbances of cell metabolism and, as a result, the homocysteine con- centration of the serum increases. The increased serum homocysteine concentration has shown to be an indepen- dent risk factor for blood vessel diseases, stroke and thromboembolic disease. Test panel developed by Biohit for screening the risk of By combining the determination of B12 and homocys- gastric cancer and peptic ulcer from blood samples. teine with the Pepsinogen- and Gastrin-17 -tests those patients suffering from atrophic gastritis who have meta- bolic disturbances, disturbances of cell metabolism, or those, who are at high risk for such disturbances, can be The Helicobacter pylori -infection causes a chronic identified. Approx. 10% of those suffering from the H. infection in the stomach (gastritis), which leads in approx. pylori -infection belong to this risk group, who have such half of the patients to the development of atrophic gastri- metabolic disturbances during their lifetime, primarily the tis. In addition, H.pylori strains that express cytotoxin elderly. associated protein A (CagA) seem to be associated with the development of atrophic gastritis57 and gastric can- cer58. Gastritis and atrophic gastritis appear in different patients in three different topographical types depending on whether the changes appear in the lower part of the stomach, i.e., the antrum (antrum gastritis), the upper part, i.e., the corpus (corpus gastritis) or both (pangastritis). The risk for gastric cancer and peptic ulcer is very low when the stomach is normal. The risk for gastric cancer is high when the atrophic gastritis is severe, and the atrophy changes appear both in the antrum and the corpus. The risk for peptic ulcer is highest when the gastritis, and especially the atrophic gastritis, is in the antrum but not in the corpus, i.e., when the corpus is normal and secretes much acid and pepsinogen. Approx. half of the Finnish population suffers from the H. pylori -infection. At least 10-20% of the population with the H. pylori -infection will suffer from peptic ulcer during their lifetime. Of those infected approx. 2% will suffer from gastric cancer. At least 10% of those who have a severe atrophic gastritis will suffer from gastric cancer during their lifetime.59 An estimated 20 million people in the United States either have or are expected to develop peptic ulcer60. The cyclooxygenase-2 protein determined from tissue samples is found only when cells become neo- plastic and malignant61. The Pepsinogen I-, Pepsinogen II - and Gastrin-17 - tests can be used to screen those patients who belong to the risk group of gastric cancer and peptic ulcer. The blood tests screen the parts of the stomach in which the gastritis and atrophy changes are located and the degree of 57 Sande, N., Nikulin, M., Nilsson, I., Wadström, T., Laxén, F., Härkönen, M., Suovaniemi, O. and Sipponen, P. (submitted in 2000). Increased Risk of Developing Atrophic Gastritis in Patients Infected with CagA- Biohit's monoclonal antibodies can be used in cancer Positive Helicobacter Pylori. Scand. J. Gastroenterol. 58 Parsonnet, J., Friedman, G.D., Orentreich, V. and Vogelman H. (1997). research to detect, for example, tumor invasion and Risk for Gastric Cancer in People with CagA Positive or CagA metastasis. The microscope image shows an immunoflu- Negative Helicobacter pylori infection. Gut 40: 297-301. orescence staining of transformed CHO-cells, stained 59 Duodecim (1999). Gastroenterology. with Biohit's alfa IIb -integrin antibody. 60 Lim, D. (1996). Microbiology, 2nd ed.: 522. 61 Ristimäki A., Honkanen N., Jänkälä H., Sipponen P. and Härkönen M. (1997). Expression of Cyclooxygenase-2 in Human Gastric Carcinoma. Cancer Res. 57: 1276-1280. 18 BIOH T Monoclonal Antibodies breaks the lactose, i.e., the milk sugar, in the reagent. If the color remains unchanged or changes slightly, the The different test kits of the test panel for screening the patient suffers from lactose intolerance (hypolactasia of risk of gastric cancer and peptic ulcer are based on the small intestine). Biohit's unique POC-test69,70 enables, immunodiagnostics and there on the use of Biohit's mon- when performing gastroscopy, to find quickly those oclonal antibodies (MAbs)62 and microplates63, which can patients who suffer from lactose intolerance. For this rea- be used in vertical measurement applications64. In addition son the quick test should be used in connection with gas- to the Pepsinogen I, Pepsinogen II and Gastrin-17 anti- troscopy for determining possible lactose intolerance. bodies related with the test panel, Biohit currently manu- factures and markets 25 different Mabs, which are suited Diagnosis of Celiac Disease for immunohistochemistry and used in basic research as well as for classifying different types of cancer from tis- Approx. 0.3% of all people suffer from celiac disease71. sue samples65,66,67,68. These MAbs have been developed This is a severe disease, in which the glutein (and gliadin) specifically for human extracellular matrix components, present in nutrition destroy the villuses of the small intes- human integrins, human cytoskeletal polypeptides, tine, referred to as the atrophy of the villuses. This atro- human neurotransmitter substances, human spectrins and phy leads to absorption disorders in the small intestine, human endothelial cell surface markers. deficiencies of vitamins and an increased risk for different illnesses since certain parts of the nutrition are not Diagnosis of Lactose Intolerance absorbed to blood circulation. Celiac patients are also at a higher risk of cancer in general. As to children, the disease Over 17% of the adult population in Finland suffer from renders development and growth slower. As to adults and lactose intolerance. In Asian and African countries there elderly people, undiagnosed celiac disease may lead, e.g., may be as many as 90% of the population suffering from to the weakening of bones, anemia, lack of iron and osteo- the disease. Lactose intolerance is caused by the deficien- porosis. cy or a very low level of the lactase enzyme, which breaks It is possible to diagnose celiac disease from biopsies down milk sugar (lactose), in the surface epithel of the taken from the duodenum of the small intestine in con- mucous membrane of the small intestine. The deficiency nection with gastroscopy. The lack of villuses can be causes disorders of the stomach; diarrhea and swelling depicted by the analysis of the biopsy samples. Another when eating milk products. possibility for diagnosing celiac disease is the determina- Patients seeking medical treatment due to undefined tion of specific antibodies from blood. Biohit's antibody stomach disorders are often ordered to a gastroscopy. tests for determining celiac disease from a blood sample However, lactose intolerance cannot be diagnosed on the comprise the anti-gliadin IgG, anti-gliadin IgA, anti- basis of gastroscopy or the microscopical evaluation of transglutaminase and anti-endomysium IgA -tests. The biopsy samples. This is due to the fact that the lack of the increase of the concentrations of these substances in blood enzyme does not show on the biopsies and, as a result, the is an indicator of celiac disease. These tests have proven structure of the mucous membrane seems normal. The to be reliable and sensitive in the diagnosis of celiac dis- lack of the lactase enzyme must be determined biochemi- ease. cally from a biopsy in the laboratory or on the basis of lac- The biochemical basis for celiac disease may possibly tose load or breath tests. All these tests are time-consum- be that the transglutaminase enzyme appears on the sur- ing, strenuous for the patient and expensive. face of a cell in connection with the toxic damage caused Biohit's quick test for determining lactose intolerance by glutein. In this event antibodies are produced against (hypolactasia of the small intestine) is based on the fact the complex of glutein and the enzyme. For this reason that, in connection with gastroscopy, a biopsy taken from the antibodies produced against transglutaminase may be the mucous membrane of the upper part of the small intes- a specific and most important marker of celiac disease. tine is examined immediately. After 15 minutes the change in the color of the test liquid informs whether the lactase enzyme is present in the biopsy sample. Normally the color changes as the lactase enzyme of the sample 62 Milstein and Köhler invented monoclonal antibodies and received the Nobel Prize for this invention in 1984. 63 Vauramo, K (1994). U.S. -patent 5,308,584: Cuvette Matrix Tray. 64 Suovaniemi, O. (1994). Automated Instrumentation for Clinical and Research Laboratories - Innovations and Development of Vertical Light Beam Photometers and Electronic Pipettors, Ph.D. Thesis, University of Helsinki. 65 Linnala, A. (1998). Tenascin, Fibronectin, Laminin and Their Integrin Receptors in Human Cell Cultures, Ph.D. Thesis, University of Helsinki. 66 Jahkola, T., Toivonen, T., Nordling S., von Smitten, K., Blomqvist, C. and Virtanen, I. (1996). Expression of Tenascin in Invasion Border of Early Breast Cancer Correlates with Higher Risk of Distant Metastasis. Int. J. Cancer (Pred. Oncol.) 69: 445-447. 67 Jahkola, T., Toivonen, T., Nordling S., von Smitten, K. and Virtanen, I. (1998). Expression of Tenascin-C in Intraductal Carcinoma of Human Breast: Relationship to Invasion. European Journal of Cancer, Vol. 34, No. 11: 1687-1692. 68 Ylätupa, S. (1996). The Development of a Method for Quantification of Cellular Fibronectin EDAcFN and Its Clinical Applications, Ph.D. Thesis, University of Helsinki. 69 Point-of-Care (POC) -test is performed quickly close to the patient. 70 Sipponen, P., Suovaniemi, O. and Tamminen J. (2000) Finnish patent 106212: Method for the Determination of Disaccharidases and Kit Therefor. 71 McMillan, S.A., Haughton, D.J., Biggart, J.D., Edgar, J.D., Porter, K.G. and McNeil, T.A.. (1991). Predictive Value for Coeliac Disease of Biohit's POC -quick test for the determination of lactose Antibodies to Gliadin, Endomysium and Jejunum Patients for intolerance from tissue samples. Attending for Jejunal Biopsy. BMJ 303: 1163-5. 19 BIOH T Hypolactasia develops always in connection with the atrophy of the villuses and, thus, celiac patients cannot, as hypolactase patients, use milk products. The lack of lac- tase identified with Biohit's quick test for diagnosing lac- tose intolerance, used in connection with gastroscopy, may also be an indication of celiac disease. Diagnosis of Systemic Lupus Erythematosus Biohit has developed a completely novel method for diag- nosing systemic lupus erythematosus (SLE). SLE is a pro- totype of autoimmune diseases, which with its various symptoms resembles rheumatic diseases. The develop- ment and technology of the test are based on an interna- tional patent acquired exclusively by Biohit72. The presence of DNA antibodies in the blood of the patient is typical of SLE. Unlike in the conventional DNA antibody tests, which use purified calf thymus DNA as capture antigens for autoantibodies, the newly developed Biohit's test panel for screening the risk of gastric can- Biohit anti-telomere antibody assay is based on the use of cer and peptic ulcer from blood samples replaces gas- the double-stranded telomeric DNA as the capture antigen troscopy (in the picture) as the first method when exam- for the binding of SLE antibodies. ining patients suffering from stomach pains. In fall 2000 Biohit's telomere antibody test measures in a sensitive Biohit's test panel passed successfully the clinical evalu- and specific enzyme immunoassay procedure (EIA) ation carried out at the Jorvi Hospital in Finland. In the telomere antibodies in the serum of the SLE patient. On front Ilpo Kääriäinen, M.D., Ph.D. and research nurse the basis of the titers of these antibodies it is possible to Sari Karesvuori. In the backround Prof. Pentti Sipponen, distinguish the SLE, e.g., from rheumatoid arthritis.73,74 the Head of the Department of Pathology at Jorvi The observation that telomerase activity is detected in Hospital in Finland and Biohit's scientific advisor for 85% of all cancers has made the telomerase enzyme a new diagnostics. cancer marker and added a special interest on the telom- ere research itself75. The performance of the blood test for determining SLE has proven to be superior to the few competing tests in clinical evaluations. Recently the renowned researcher on rheumatic diseases and SLE, professor D.J. Wallace, together with his research team published positive results on the SLE-test76. Phytoestrogens and the Prevention of Cancer Biohit's policy is to continue to develop unique diagnos- tic tests in the fields of cancer detection and prevention. For this purpose Biohit develops, in collaboration with 72 Salonen, E-M. (1997). U.S. patent 5,700,641: Diagnostic Method, Test Kit, Drug and Therapeutic Treatment for Autoimmune Disease. Professor Herman Adlercreutz, tests for urine and serum 73 Salonen, E-M., Ruuskanen, L. and Friman, C. (1996). Anti-Telomere phytoestrogens. These tests, which are performed using Antibodies in SLE. Arthr. & Reum. 39:40. enzyme immunoassay techniques and monoclonal anti- 74 Salonen, E-M., Wallace, D.J., Metzger, A., Morris, R. and Avaniss- bodies, are based on over 20 years of basic research. Aghajani, E. (1998). Anti-Telomere Antibodies Are Highly Specific for Systemic Lupus Erythematosus (SLE). Arth. & Reum. 41: 247. Low concentrations of phytoestrogens may signal a 75 Shay, J.W. (1997). Telomerase in Human Development and Cancer. risk for certain forms of cancer (large bowel, breast and Journal of Cellular Physiology 173: 266-270. prostate)77,78,79,80 as well as for ischemic heart disease81. In 76 Wallace, D.J., Salonen, E-M., Avaniss-Aghajani, Morris, R., Metzger, such cases the prevention of the diseases involves changes A.L. and Pashinian, N. (2000). Anti-Telomere Antibodies in Systemic Lupus Erythematosus: A New ELISA Test for Anti-DNA with Potential in diet to include more whole-grain bread, berries, certain Pathogenetic Implications. Nature 9: 328-332. vegetables and soybean products82,83. People are more and 77 Adlercreutz H., Fotsis T., Heikkinen R., Dwyer J.T., Woods M., Goldin more interested in nutrition and health. For this reason B.R. and Gorbach S.L. (1982). Excretion of the Lignans Enterolactone research work on phytoestrogens is undertaken very and Enterodiol and of Equal in Omnivorous and Vegetarian Women and in Women with Breast Cancer. Lancet 2: 1295-1299. intensively world-wide. 78 Adlercreutz H. (1990). Western Diet and Western Diseases: Some Hormonal and Biochemical Mechanisms and Associations. Scand. J. Diagnostics in 2000 Clin. Lab. Invest. 50, Suppl. 201: 3-23. 79 Adlercreutz H. and Mazur W. (1997). Phyto-Oestrogens and Western In the business area of diagnostics the development of the Diseases. Ann. Med. 29: 95-120. test panel for screening the risk of gastric cancer and pep- 80 Adlercreutz H., Mazur W., Kinzel J., van Reijsen M., Bertels P., tic ulcer proceeded according to plans. In 2000 the Elomaa V.-V., Watanabe S., Wähälä K., Mäkelä T., Hase T., Landström Pepsinogen I and II, the Gastrin-17 and the Helicobacter M., Bergh A., Damber J.-E., Åman P., Zhang J.-X. and Hallmans G. (1997). Phytoestrogens and Prostate Disease. In Fundamentals of pylori (H.pylori) -tests were finished. Cancer Prevention (Ed. Conney A.H., Ito N., Sugimura T., Terada M., In fall 2000 Biohit's test panel passed successfully the Wakabayashi K. and Weinstein I.B.). Princess Takamatsu Cancer clinical evaluation carried out at the Jorvi Hospital in Research Fund, Tokyo, pp. 22-24. Finland. During the evaluation 100 patients underwent 81 Adlercreutz H. and Mazur W. (1997). Phyto-Oestrogens and Western Diseases. Ann. Med. 29: 95-120. gastroscopy and the microscopic examination of the biop- 82 Adlercreutz H. and Mazur W. (1997). Phyto-Oestrogens and Western sies taken from the mucous membrane of the stomach. Diseases. Ann. Med. 29: 95-120. Various types of gastric diseases were diagnosed in 83 Griffiths K., Adlercreutz H., Boyle P., Denis L., Nicholson R.I. and approx. 40% of the patients selected to participate in the Morton M.S. (1996). Nutrition and Cancer. ISIS Medical Media, Oxford, pp. 1-173. 20 BIOH T study. The serum Pepsinogen I and Gastrin 17 -concentra- Gastro Program (GP) -Package tions and the H. pylori -antibodies were determined from the blood samples of the patients by using Biohit's test Biohit's non-invasive method to diagnose the risk of gas- panel. When the results produced by Biohit's test panel tric cancer and peptic ulcer from blood samples (the were compared with the diagnoses made on the basis of Gastric Test Panel) and its related software (GastroSoft®) the gastroscopy and biopsies, it was found that the sensi- for the interpretation of the test results are new and unique tivity of the test panel was over 90%. This means that the inventions in the world. The only alternative method for test panel is able to find nearly all those patients who have the GP-package is the inconvenient and expensive gas- been diagnosed ill on the basis of the results of the gas- troscopy and the examination of biopsies. In the light of troscopy and analysis of the biopsy samples. Furthermore, current knowledge invasive gastroscopy is used as the the test panel was able to classify correctly, with a speci- primary method for studying dyspepsia, the continuous or ficity of 90%, those patients who did not suffer from a occasional pain in the upper part of the stomach. gastric disease or the disease was mild. When studying the underlying causes of dyspepsia it is Biohit's monoclonal antibody tests (Pepsinogen I and possible to determine the H. pylori -infection, the atroph- II, Gastrin-17) for screening the risk of gastric cancer and ic gastritis of the mucous membrane of the stomach and peptic ulcer proved to be highly specific also in immuno- the risk for gastric cancer and peptic ulcer with the help of histochemistry. This expands the area of use of Biohit's the GP package. The H. pylori -antibodies and the monoclonal antibodies, e.g., to pathological laboratories. Pepsinogen I and Gastrin-17 -concentrations are mea- Prior to this Biohit has had for sale 25 monoclonal anti- sured from a blood sample. The H. pylori -infection can bodies applicable to immunohistochemistry. In the area of be determined also by measuring H. pylori -antibodies phytoestrogens Biohit continued to develop monoclonal from saliva, by determining its antigens with a breath test, antibodies for Enterolactone and Genistein. and by detecting antigens from feces or from biopsy sam- In 2000 the clinical evaluations continued for Biohit's ples, depending on the phase of the illness. On the basis quick test for determining lactose intolerance and the of these results the program draws up a diagnosis of telomere antibody test for detecting systemic lupus ery- atrophic gastritis and determines risk factors for gastric thematosus (SLE). During the reporting period the range cancer and peptic ulcer. Moreover, the program produces of tests for diagnosing celiac disease was complemented an instruction for treatment for possible H. pylori -infec- with an endomysium IgA -test. tion and recommendations for possible gastroscopy and In 2000 Biohit commenced the processes of obtaining the determination of the concentrations of vitamin B12 official approvals in Europe (CE marking), in the U.S. and homocysteine from a blood sample. Interpretation of (approval by Food and Drug Administration) and Japan. the test results gained is normative; ultimately the doctor After receiving the approvals Biohit's diagnostic products is responsible for additional examinations and the overall can be sold for clinical use. In 2000 Biohit made prepara- treatment of the patient. tions to commence the marketing of its diagnostic tests The GP-package enables to avoid in most cases gas- through its seven subsidiaries, the network of distributors troscopy as the primary examination method. On an over- and co-operation partners. all level gastroscopy is disliked by patients, and the majority of the doctors does not perform it in their offices. In fact, a risk and possibility of mistakes is always related with the invasive gastroscopy, and its results are highly dependent on the skills of the doctor. Skilled gastro- scopists are rare, and, e.g., in Finland a large number of patients are currently waiting for the operation. If the waiting time is prolonged, the potential early gastric cancer may develop into a stage in which it is no longer possible to save the patient. If gastric or peptic ulcer remains undiagnosed for a long time and the hemorrhage becomes massive, the patient faces the risk of death. Due to the fact that the causes of dyspepsia are seldom found by gastroscopy during the patient's first visit to the doctor, reaching a correct diagnosis may be prolonged. On the contrary, without an accurate diagnosis often a selected treatment will be tried out for a couple of weeks. If the tried treatments are not effec- tive it is possible that such patients who suffer from functional stomach disorders are without cause sent to gastroscopy. Differential diagnostics related with stom- ach disorders assesses whether the patient suf- fers from functional disorders or from more severe organic diseases. Differential diagnos- tics is, however, made complex by the fact that On the basis of the results produced by Biohit's gastric test panel the chronic or acute stomach disorders and pain computer program draws up a diagnosis of atrophic gastritis and deter- may be caused by the upper or lower parts of mines risk factors for gastric cancer and peptic ulcer. Moreover, the pro- the intestine or other organs. The cause of dys- gram provides an instruction for treatment for possible H. pylori -infec- pepsia is functional in approx. half of the tion and recommendations for further treatment. patients seeking medical treatment. 21 BIOH T The reflux disease84, the incidence of which, e.g., in The correct diagnosis and treatment of a patient suf- Finland increases as the cases of gastric cancer and peptic fering from acute or chronic stomach disorders and pains ulcer decrease, underlies often peptic ulcer and gastric is most successful if the doctor can rely on comprehensive cancer, which are related with the H. pylori -infection and and quick laboratory services. This requires that the basic atrophic gastritis, as well as dyspepsia. Relatively often laboratory services are available at doctors' offices and dyspepsia is caused by lactose intolerance and more sel- medical centers, and, thus, it is unnecessary to rely on out- dom by celiac disease, which also leads, e.g., to lactose side services. intolerance. The use of anti-inflammatory analgesics and Biohit's GP-package, other diagnostic test kits and the autoimmune disease causing atrophy of the mucous analyzing systems composed of diagnostics, liquid han- membrane of the stomach may also underlie dyspepsia. dling products, instruments and related software are well Approx. 25% of the Finnish population suffer from the suited for decentralized laboratory diagnostics. The symptoms of reflux disease. The shares for lactose intol- decentralized laboratory diagnostics is a core prerequisite erance and celiac disease are approx. 17% and 0.3 - 1.0%, for the beginning of the theranostics era (Evidence-Based respectively. Approx. half of Finns suffer from the H. Medicine)85. pylori -infection. At least 10-20% of those infected by H. Since October 2000 Biohit has been engaged in co- pylori will suffer from gastric cancer or peptic ulcer. operation related with theranostics in Russia. Biohit's Approx. 2.0% of the infected and at least 10% of the subsidiary in St. Petersburg sells together with Hoffmann- patients with severe atrophic gastritis will suffer from gas- La Roche the Hercep test of the Danish company Dako tric cancer during their lifetime. Approx. 3% of the for the diagnosis of a specific type of breast cancer. patients over 45 who seek treatment for dyspepsia are Hoffmann-La Roche, on its part, engages in the sales of malignant. This is very seldom the case with younger Herceptin, a highly specific drug developed by the U.S. patients. However, the younger suffer more often of company Genentech, for breast cancer. In this way Biohit dyspeptic symptoms than the elderly. and Hoffmann-La Roche support each other in the mar- The atrophic gastritis of the corpus area of the stomach keting of the products they represent for the benefit of leads at the early stage to the deficiency of vitamin B12. both the doctor and the patient. The Hercep test and the At this stage there exist no signs of pernicious anemia. Herceptin drug form the first combination of a diagnostic The lack of vitamin B12 causes severe psychic disorders, test and drug, which has been approved by the FDA86. e.g., depression, dementia and neurological damages, The approval grants the right to treat the patient with such as sensory disorders. A low level of vitamin B12 Herceptin only if the results of the Hercep test have indi- leads to the increase in the concentration of homocysteine cated that the patient is apt to be treated with the said in the body. This, on its part, may increase the risk of ath- drug. erosclerosis, blood vessel diseases, and brain and myocar- This first FDA approval can be considered as a first dial infarcts. step towards the theranostics era. It seems that in the Due to limited examination capacity, gastroscopy can- future most, if not all, medication will be prescribed using not be performed on all patients suffering from stomach a diagnostic patient profile, which will require a link disorders. Thus, by using simple blood tests, either alone between medical and diagnostic companies. It has been or in combination with normally used tests, it is possible estimated that within five years the theranostic tests will to screen and identify more effectively the patients who form a significant part of the markets for IVD-tests87. are at risk of gastric cancer or peptic ulcer. By focusing Currently, the total size of the IVD markets has been esti- the examinations on the risk group the rationale and effi- mated to be approx. USD 20 billion. ciency of gastroscopies increase. Patients suffering from Biohit's GP-package combined with certain drugs of chronic atrophic gastritis constitute a major risk group. selected medical companies could be a suitable concept Biohit's quick, simple and efficient method for screen- for theranostics and highly specific medication. This ing the risk of gastric cancer and peptic ulcer from a blood opens up possibilities for co-operation between Biohit sample (Gastric Test Panel) and related software and medical companies, which would benefit, in addition (GastroSoft®) are suited for the routine use of general to the patients, both our co-operation partners and our- practitioners when examining patients suffering from selves. Medical companies possess extensive internation- stomach disorders or those belonging to the risk groups. al customer service networks, which could contribute to Similarly, the results of the GP-package provide useful disseminating information and enhance the adoption of information for the gastroscopists. Anamnesis on the loca- Biohit's GP-package among general practitioners. tion of the gastritis, its severity and an increased risk of gastric cancer or peptic ulcer is helpful for the treating doctor. Approx. 15-30% of the patients seeking medical treat- ment suffer from stomach disorders. The use of the GP- package is justified in all of the cases since the determi- nation of the causes of the disorders on the basis of anam- nesis or status is relatively unreliable. Trial treatments are 84 The disease causes the backward flow of the contents of the stomach to the esophagus. not recommended unless an exact diagnosis has been 85 The term theranostics describes an evolving group of products that link made. Biohit's GP-package enables to replace gas- diagnostics with medical treatment. They are also known by some troscopy as the primary examination method. As to labo- companies as predictive medicine. Theranostics might identify which ratory tests, the lactose load test, which is inconvenient patients would be most suited to a particular drug therapy or could be used to provide feedback on how well a drug is working in order to tai- and unreliable, is currently the most important when seek- lor the optimum treatment regimen. Many theranostic products need to ing the causes of dyspepsia. be point-of-care (POC) tests. In many cases, the results of the tests It is now possible to replace the lactose load test with need to be available quickly and at the patient's side, in order to influ- Biohit's easy and quick POC-test, which is performed on ence therapy. 86 Food and Drug Administration (FDA) is a U.S. authority, which biopsies taken in connection with gastroscopy. The panel decides, e.g., on the clinical use of drugs and diagnostic tests. for diagnosing celiac disease from a blood sample com- 87 In Vitro Diagnostic (IVD) -test refers to a test made from a patient plements these tests. sample (e.g. blood sample). 22 BIOH T Market Potential and Marketing of the Test Kits Oesophagus Stomach Small intestine From Biohit's point of view the market potential for the Corpus Antrum test kits is nearly limitless, over USD 5.0 billion88. Since - PGI, II - G-17 - HCI - PGII Biohit's test kits have been awarded patents and Biohit P-B12 - HC HC-B12 HC IF-B12 has actively filed new applications, the company's possi- - IF IF-B12-R bility to benefit from the potential through its subsidiaries, TC distributors and project exports seems very promising. HC-B12 IF However, when striving to benefit from this potential, Biohit and its co-operation parties face the challenge of Blood Heart Brain Nerve Liver rapidly increasing the awareness of doctors and patients vessels tissue TC-B12 (20%) about these products. As to the GP-package the following Blood means will be used: stream Body • Congresses, exhibitions, testing and promotion by spe- tissues cialists. Biohit's global data base on gastroenterologists Hcy (+) Vitamin B12 (-) HC-B12 (80%) and researchers currently cover 5,000 members in 50 different countries. • The GP-package as a replacement method for gas- Metabolism of Vitamin B12 and Consequences of Its troscopy is the primary method for thousands of gener- Distortions al practitioners. In addition to test results, the package The absorption of vitamin B12 from nutrition is distorted provides recommendations for diagnosis, treatment and when the mucous membrane of the corpus area of the stom- further examinations. ach is atrophic. This results from the fact that the atrophic • Articles by researchers and popularized information mucous membrane of the corpus does not secrete the intrin- disseminated by mass media to increase the awareness sic factor (IF) and haptocorrin (HC). In nearly 90% of the of patients to be correctly tested by a non-invasive cases the atrophy of the mucous membrane of the stomach method before treatment. is caused by Helicobacter pylori -infection and in less than • The joint marketing of diagnostic tests (Theranostics) 10 % of the cases by autoimmune disease. If the atrophy of and corresponding highly specific drugs, i.e., Evidence- the mucous membrane becomes chronic, the risk of gastric Based Medicine. cancer and peptic ulcer increases. This risk can be deter- mined by measuring from blood sample the concentration of • Approval by authorities (e.g. in the U.S. and Japan) Pepsinogen I secreted by the mucous membrane of the cor- before clinical use. pus and the concentration of Gastrin-17 secreted by the • Biohit's seven subsidiaries with their customer service mucous membrane of the antrum. networks. The protease enzyme secreted by the gastric juice releases • Distributors and their customer service organizations. vitamin B12 from the proteins of food. The haptocorrin • Biohit's multinational co-operation partners; possibly (HC) of the gastric juice binds the vitamin B12. The pro- with Beckman Coulter, Becton Dickinson, bioMérieux, tease enzyme secreted by the pancreas breaks down the pro- Hoffmann-La Roche and Johnson & Johnson. duced HC-B12 complex, and the released B12 vitamin is • New co-operation partners. bound by the intrinsic factor. The IF-B12 complex is • Project exports (Asia, Near East, South America). absorbed by the epithelial cells of the small intestine by the receptors of the cell membranes. The B12 vitamin, released This existing specialist, co-operation and customer ser- from the IF-B12 complex, binds with transcobalamin (TC). vice network has provided Biohit the unique advantage to This results in the TC-B12 complex (holo-transcobalamin). commence the global testing, adoption and marketing of The TC-B12 complex is released into the blood stream and the new products on the largest and most important mar- is subsequently recognized and taken up by specific recep- kets, the lead markets. Biohit's seven subsidiaries with tors present on all cell types. This complex, which is physio- skillful and experienced personnel are also currently pre- logically active, includes approx. 20% of the total amount of pared to begin the marketing and sales of diagnostics and vitamin B12 present in blood. Its concentration decreases instruments. Morover, most of Biohit's 60 main distribu- rapidly if the absorption of vitamin B12 is distorted. The half-life of the TC-B12 complex in the body is only 0.75 day tors for liquid handling products have a customer service and that of the HC-B12 complex approx. 9 days. The HC- network also for the sales of diagnostics, instruments and B12 complex is stored in the liver and kidneys.89 analyzing systems. Vitamin B12 is solely produced by micro-organisms. Thus, vitamin B12 must be received from nutrition, and if the corpus area of the stomach is atrophic, by injections of vitamin B12. The lack of vitamin B12 in the body is an increasingly growing health problem worldwide and it con- cerns especially the elderly. Approx. 5-20% of the elderly suffer from diseases caused by the lack of vitamin B12. The lack of vitamin B12 leads in less than a year to dis- tortions of the activity of the neural tissues, depression and dementia. These illnesses begin to develop already before the development of noticeable pernicious type of anemia, and they can become irreversible if the diagnosis and treat- ment are delayed.90 Moreover, in connection with the lack of vitamin B12 the concentration of homocysteine (Hcy) in tis- sues and blood increases, which increases the risk of ather- osclerosis and thromboembolic diseases. 89 Holo-transcobalamin: The Physiologically Active Vitamin B12 Metabolite. Clinical Laboratory International, Vol. 24, No.8 (2000): 8. 88 MeritaNordbanken Research 25.08.1999. 90 http://www.b12.com/page1i.htm 23 BIOH T INSTRUMENTS The business idea of Biohit is to offer its customer base also complete analyzing systems, which are comprised of liquid handling products, diagnostic tests, instruments used in the analysis of the results, software as well as maintenance and training services. In the business area of instruments Biohit's objective is to supply products for the following three market segments: instruments used in research, instruments used in clinical applications, and instruments used in industrial applications for the analysis of samples. Biohit's GP-package and other test kits as well as the analyzing systems are extremely well suited for decen- tralized laboratory diagnostics performed close to the patient and the doctor. Decentralized laboratory diagnos- tics is a prerequisite for the close interlinkage between the examination and treatment of the patient. Research and Development of Instruments and Market Potential As early as the 1970s the current management of Biohit and key personnel developed and commercialized two In 2000 Biohit began the sales and marketing of state-of- inventions made by Dr. Osmo Suovaniemi at the end of the-art microplate readers and washers. The picture 1960s: the single- and multichannel adjustable mechani- displays Biohit's BP800 reader, which enables the cal liquid handling devices (Finnpipettes91) as well as ver- performace of numerous measurement, calculation and tical photometry and its instrument applications (e.g. data validation functions for ELISA applications. Multiskan92). Biohit has researched and developed further vertical measurement principles since the end of the 1980s93,94. It has been estimated that the current annual sales volume of microplate readers, multichannel pipet- In order to serve its customer base also with complete tors, microstrips as well as other products developed on analyzing systems, Biohit began the purchases of private the basis of the vertical measurement principle together label liquid handling and microplate instruments from the with their accessories already exceeds USD 1.0 billion U.S. Bio-Tek Instruments, Inc. in accordance with the annually95,96. contract concluded in August 2000. In fact, the vertical The instruments based on vertical photometry have measurement principle and its applications invented by made possible the extensive research and fast develop- Osmo Suovaniemi at the end of the 1960s have served as ment of enzyme immunoassay (EIA)-technology and its examples for Bio-Tek's instruments. The investments in associated applications such as analyzing and screening equipment by companies specializing in automated mole- of cancers and infectious diseases. During the past ten cular biology methods and the development of biological- years, the EIA-technology has been followed by the rapid ly active molecules are growing very rapidly and, thus, development of molecular biology techniques, such as the becoming an important market area. It has been estimated Polymerase Chain Reaction (PCR) -technique, which is that these markets grow at an annual rate of 25 - 30%. used for the amplification of DNA. Vertical measurement applications have been widely used in recent years in con- Instruments in 2000 nection with the PCR-technique and similar applications. In 2000 Biohit began the sales and marketing of state-of- the-art microplate readers and washers. The instruments with integrated keyboard, LCD-display, interface and extensive menu-driven software can serve as stand-alone instruments or as part of a larger laboratory information management system (LIMS) when connected to a host device, such as a PC. Although Biohit's readers and washers are intended for a wide range of assays they are delivered with pre-pro- grammed protocols for Biohit's ELISA assays, e.g., for Pepsinogen-I, Gastrin-17 and Helicobacter pylori. This ensures ease-of-use, optimal operation and verified test reporting and results. 91 Finnpipette is a registered trademark of Labsystems Oy. 92 Multiskan is a registered trademark of Labsystems Oy. 93 Suovaniemi, O. (1994). Automated Instrumentation for Clinical and Research Laboratories - Innovations and Development of Vertical Light Beam Photometers and Electronic Pipettors, Ph.D. Thesis, University of Helsinki. 94 Tiusanen, T. (1992). Inner-Filter Correction with a Fluorometer-Based Multifunctional Instrument, Ph.D. Thesis, University of Helsinki. 95 McGrath & Associates, Inc. 1999. 96 Suovaniemi, O. (1994). Automated Instrumentation for Clinical and Research Laboratories - Innovations and Development of Vertical Light Beam Photometers and Electronic Pipettors, Ph.D. Thesis, University of Helsinki, p.46. 24 BIOH T • BP800 microplate reader The BP800 microplate reader has all the features of a modern microplate photometer with dual wavelength measurement, UV-optics and versatile microplate format support. The instrument is delivered with preprogrammed assay protocols for Biohit's diagnostic tests. With the help of the intuitive user interface new test protocols can be made fast and easily. Extensive on-board data analysis includes several curve-fitting options, transformations and control validation. In addition to the printer interface, the instrument has a serial interface to be controlled with a PC for the further processing and distribution of data. The reader is supported by Biohit e-Lisa XL measurement and data distribution software. • BP808 microplate reader The BP808 microplate reader is a top performance 8- channel microplate photometer with four-zone incubation and plate shaking functionality. Due to the fast reading capability the unit is suitable not only for end-point but also for kinetic applications. With the help of the intuitive user interface new test protocols can be made fast and eas- ily. Extensive on-board data analysis includes several curve-fitting options, transformations and control valida- Biohit's microplate readers and washers are delivered tion. Automatic report printing is carried out with the help preprogrammed for Biohit diagnostics. The picture dis- of an external printer. The instrument has a serial interface plays the BW50 microplate washer. to be controlled with a PC for the further processing and distribution of data, e.g., with Biohit's software (GastroSoft®). The product is delivered with prepro- The know-how, innovations and experience of Biohit's grammed assay protocols for Biohit's diagnostic tests. key personnel have formed a solid basis for the develop- ment of the instrument business. The development of • E-Lisa XL instruments as well as that of liquid handling products is The e-Lisa XL is a most easy-to-use software utility for guided by the diagnostic tests and related software for the supporting the BP800/808 Biohit readers with end point calculation and interpretation of the test results. Biohit's type assays such as Biohit Pepsinogen I, Gastrin-17 and software related with the GP-package, which is most Helicobacter pylori ELISA tests. It has been designed to helpful for the doctor when the results produced by be used together with Microsoft Excel™, providing a Biohit's gastric test panel are knowm, serves as an exam- huge amount of possibilities for data processing. The e- ple of the interlinkages in the development work. Lisa XL is delivered with ready made Excel templates for The liquid handling instruments for the automated several Biohit assays. These serve as immediate use of handling of samples and reagents as well as the instru- Biohit test results or as examples to design your own tem- ments used for the reading and interpretation of the analy- plates for your assays. ses intended for research, PCR- and HTS-applications as well as POC-diagnostics offer Biohit an additional, strong • BW50 microplate washer base for growth. In this area the markets for the said The BW50 microplate washer is a self-contained and pro- instruments and larger systems composed of them is esti- grammable microplate washer suitable for different mated to demonstrate a growth of 25-30% annually. ELISA, FIA, RIA and DNA probe and cellular assays. It Moreover, the markets for different types of plastic dis- allows for full control of precise fluidic delivery from the posables, which are used in PCR-, HTS- and POC-appli- gentle dripping of a simple squeeze bottle to the full force cations, are estimated to grow over 30% each year. of pressure delivery systems. The instrument is delivered preprogrammed for Biohit diagnostics. 25 BIOH T BOARD OF DIRECTORS´ REPORT Biohit manufactures liquid handling products and accessories and diagnostic systems for use in research, health care and industrial laboratories. Biohit's product range encompasses also instruments, which together with the liquid handling products and diagnostic tests, enable to offer com- plete analyzing systems for customers. In the business area of liquid handling Biohit's main products are electronic and mechanical liquid handling devices and disposable tips. In the business area of diagnostics the product range consists of tests for screening the risk of gastric cancer and peptic ulcer, as well as for the diag- nosis of lactose intolerance, celiac disease and systemic lupus erythematosus. The product range of instruments include microplate readers and washers. Net Sales The net sales of the Biohit Group increased by 18% compared with the previous year, i.e., from FIM 122.2 million to FIM 144.2 million. The net sales was generated primarily by the sales of liquid handling products and their disposables. Similarily to prior years exports accounted for approximately 96% of the net sales. 53 % of net sales consisted of sales to European countries, 19% to the Americas and the remainder 28% mainly to Asia. Profit/Loss The operating loss for the reporting period totalled to MFIM 2.8 (MFIM 7.9 profit in 1999). The operating profit before goodwill amortization totalled to MFIM 2.8 (MFIM 13.2) and loss per share FIM 0.37 (FIM 0.24 profit). The cash flow provided by operating activities before financial items and income taxes was MFIM 7.2 positive in 2000. Compared with the previous year the result was burdened by an increase in fixed costs, which was primarily due to additional investments in the international marketing organization and the research and development of diagnostics. In 2000 Biohit began the marketing of the diagnostic products and made preparations for large-scale manufacturing. The net financial expenses totalled to MFIM 0.6 (MFIM 3.0). The decrease of MFIM 2.4 compared with 1999 was primarily due to the MFIM 1.6 interests accrued on the capital loans of Biohit Plc. by 31.12.1999, and which were recorded in 1999. The loss before extraordinary items totalled to MFIM 3.4 (MFIM 4.9) and loss before taxes MFIM 2.0. The extraordinary income consisted primarily of the MFIM 1.4 profit received from the sales of the shares of Wolf Laboratories Ltd. Liquidity The liquidity of the Biohit Group is good. Despite the decrease in the result the cash flow provided by operating activities before financial items and income taxes was MFIM 7.2 positive. The decrease in liquid assets from MFIM 42.9 to 17.9 was due to acquisitions in the U.S. and Russia (MFIM 10.3), investments in the production premises in Kajaani (MFIM 21.6) and the MFIM 3.6 repayment of capital loans and their interest. The financial position was improved by the MFIM 4.5 interest-free loan and MFIM 2.0 compensation for damages received from the City of Kajaani. The gearing ratio changed from 66.0% at year-end 1999 to 66.9%. Investments The gross investments of the period totalled to MFIM 42.0 (MFIM 7.6), for which a MFIM 5.0 investment grant has been received from the Ministry of Trade and Industry. In 2000 the new production plant was finished in Kajaani. The total expenditure of MFIM 21.6 were comprised of MFIM 17.8 investments in the building and MFIM 3.8 in machinery and equipment. Other investments in machinery and equipment totalled to MFIM 8.2. Investments in intangible assets were MFIM 1.9 and MFIM 10.3 in acquisitions. Research and Development In the business area of liquid handling the main event was the finalization of the new electronic pipettor generation. Additionally, the calibration laboratory for liquid handling devices of Biohit Plc. was accredited on March 20, 2000 as a result of the evaluation made by the Finnish Accreditation Service (FINAS). In the business area of diagnostics the test panel developed by Biohit passed successfully the clinical evaluation in Finland, and preparations for large-scale manufacturing were begun. The research and development expenses of the Biohit Group totalled to MFIM 10.1 (MFIM 7.5), i.e., 7.0% (6.2%) of the net sales. Changes in the Corporate Structure in 2000 The acquisitions made in 2000 reinforced Biohit's position on international markets. Biohit Systems, Inc., the U.S. subsidiary of Biohit Plc., acquired on April 25, 2000 the entire share capital of the U.S. company Vangard International, Inc., which has acted as a distributor of Biohit's products. Biohit reinforced marketing also in Russia and other CIS-countries by acquiring the entire share capital of the Finnish company Oy Finio Ab on May 15, 2000. At the same time Biohit received 51% of the shares of the Russian company Finnbio Ltd, in which Biohit's earlier ownership was 5%. Biohit acquired 100% of the votes in Finnbio Ltd by acquiring the minority of 44% on December 29, 2000. Biohit Ltd. sold on Dec. 29, 2000 its majority share, i.e., 51% of the U.K. company Wolf Laboratories, Ltd., which has acted in the U.K. as the distributor of Biohit products. Wolf Laboratories Ltd. will continue after the transaction, together with Biohit's U.K. subsidiary Biohit Ltd., as the local distributor for Biohit products in the U.K. In 2000 a decision was made to transfer all diagnostic business operations of Locus genex Oy to its parent company Biohit Plc. to gain more efficiency in all activities. For that purpose the extraordinary general meeting of Locus genex Oy decided on Dec. 14, 2000 to place the compa- ny in voluntary liquidation. Increases in Share Capital On the basis of the first subscription period by the personnel options 1.1.-1.4.2000 the personnel of Biohit subscribed altogether 378,840 B-shares of the total of 400,000. The subscription price was FIM 12.50 per share. As a result of the subscriptions the total number of shares rose to 12,643,377 pieces. The share capital increased by EUR 64,402.86 to EUR 2,149,374.09. The premium fund increased by EUR 732,051,11. Administration and Personnel During the reporting period the following persons were members of the Board of Directors of Biohit Plc.: Professor Reijo Luostarinen as the Chairman and Osmo Suovaniemi, M.D., Ph.D. and Professor Mårten Wikström as members. Pekka Salonoja, the Chairman of the Board of Erja- Kiinteistöt Oy acted as a member until April 6, 2000. Osmo Suovaniemi has acted as the President & CEO. SVH Pricewaterhouse Coopers Oy have acted as the auditors and Hannele Selesvuo as the responsible Authorized Public Accountant. Future Prospects The considerable investments made in 2000 and earlier in research and development, production and the global co-operation and customer ser- vice network are expected to have a positive impact on profitability as of 2001. The net sales of Biohit Group for 2001 is anticipated to demonstrate a growth of at least 20%. The major part of the net sales is forecast to be generated by the sales of liquid handling products. Furthermore, it is forecast that diagnostics, instruments and systems composed of liquid han- dling products, diagnostics and instruments will produce a significant increase in the net sales and profitability for 2001. 26 BIOH T INCOME AND CASH FLOW STATEMENTS INCOME STATEMENT JANUARY 1- DECEMBER 31 Group Parent company FIM 1 000 Note 2000 1999 2000 1999 NET SALES 2.1. 144 167 122 191 80 234 82 645 Change in inventories of finished goods and work in progress 4 036 -899 1 524 -733 Other operating income 1 084 499 966 395 Materials and services 2.2. -45 551 -31 422 -15 224 -14 196 Personnel expenses 2.3. -47 654 -37 816 -28 755 -26 505 Depreciation and value adjustments 3.1. -14 241 -12 538 -7 268 -7 319 Other operating expenses -44 709 -32 094 -25 522 -20 343 OPERATING PROFIT/LOSS -2 868 7 921 5 955 13 944 Financial income and expenses 2.4. -582 -3 015 -60 -2 604 PROFIT/LOSS BEFORE EXTRAORDINARY ITEMS -3 450 4 906 5 895 11 340 Extraordinary items 2.5. 1 420 2 000 -3 881 -790 PROFIT/LOSS BEFORE INCOME TAXES -2 030 6 906 2 014 10 550 Untaxed reserves 2.6. 0 -2 134 Income taxes 2.7. -1 470 -2 850 -39 -3 013 Minority interest -162 92 0 0 NET PROFIT/LOSS -3 662 4 148 -159 7 537 CASH FLOW STATEMENT JANUARY 1 – DECEMBER 31 Group Parent company FIM 1 000 2000 1999 2000 1999 CASH FLOWS FROM OPERATING ACTIVITIES Profit/loss before extraordinary items -3 450 4 906 5 895 11 340 Adjustments: Depreciations 14 241 12 538 7 268 7 318 Provisions 0 -2 657 0 -2 603 Financial income and expenses 582 3 015 60 2 604 Other adjustments -4 -395 -4 -395 Cash flow before change in net working capital 11 369 17 407 13 219 18 264 CHANGE IN NET WORKING CAPITAL Increase (-)/decrease (+) in non-interest bearing receivables 7 044 -3 681 -3 562 -513 Increase (-)/decrease (+) in inventories -4 505 524 -2 240 315 Increase (+)/decrease (-) in non-interest bearing liabilities -6 682 1 813 902 -1 586 Funds generated before financial items and income taxes 7 226 16 063 8 318 16 480 Interests and other financial items paid -4 031 -3 171 -3 463 -2 878 Interests received 1 764 1 419 1 699 1 781 Income taxes paid -1 617 -3 303 -796 -3 043 Cash flow before extraordinary items 3 343 11 008 5 757 12 340 Extraordinary items paid 2 000 0 -1 881 -2 790 Net cash flow from operating activities (A) 5 343 11 008 3 876 9 550 NET CASH FLOW FROM INVESTING ACTIVITIES Investments in tangible and intangible assets -28 631 -7 507 - 25 683 -6 385 Proceeds from disposition of tangible and intangible assets 0 0 14 0 Loans given 0 0 0 0 Investments in subsidiaries -6 650 0 -10 789 -400 Disposition of subsidiary shares -451 0 0 0 Refund of advance payment 2 404 2 404 0 Repayments of loan receivables 0 30 330 996 Proceeds from disposition of other shares and holdings 338 504 338 504 Dividends received from investments 36 40 36 39 Net cash flow from investing activities (B) -32 954 -6 933 -33 349 -5 246 NET CASH FLOW FROM FINANCING ACTIVITIES Proceeds from share issue 4 783 49 992 4 783 49 992 Repayments of short-term loans 0 -1 438 0 -1 438 Increase in capital loan 131 330 131 0 Increase in long-term loans 4 900 0 4 900 0 Repayments of long-term loans -7 185 -16 741 -6 700 -16 671 Net cash flow from financing activities (C) 2 629 32 143 3 114 31 883 Net increase (+)/decrease (-) in cash and cash equivalents (A+B+C) -24 982 36 218 -26 359 36 187 Cash and cash equivalents at January 1 42 915 6 697 40 330 4 143 Cash and cash equivalents at December 31 17 933 42 915 13 971 40 330 27 BIOH T BALANCE SHEET DECEMBER 31 ASSETS Group Parent company FIM 1 000 Note 2000 1999 2000 1999 FIXED ASSETS AND OTHER LONG-TERM INVESTMENTS Intangible assets 3.1.1. 5 345 7 954 4 583 7 023 Goodwill 3.1.1. 27 478 30 354 0 0 Tangible assets 3.1.2. 33 569 12 940 29 542 11 151 Shares and holdings 3.2. 1 219 1 249 48 202 38 249 Total fixed assets and other long-term investments 67 611 52 498 82 327 56 423 CURRENT ASSETS Inventories 3.3. 22 505 14 120 10 047 7 806 Deferred tax receivables 3.7. 1 595 749 0 0 Long-term receivables 3.4. 0 0 1 023 1 554 Short-term receivables 3.4. 36 773 36 568 37 173 34 031 Cash at bank and in hand 17 933 42 915 13 971 40 330 Total current assets 78 806 94 353 62 214 83 721 TOTAL ASSETS 146 417 146 851 144 541 140 144 SHAREHOLDERS' EQUITY AND LIABILITIES Group Parent company FIM 1 000 Note 2000 1999 2000 1999 SHAREHOLDERS' EQUITY Share capital 3.5.1. 12 780 12 397 12 780 12 397 Share premium fund 3.5.1. 88 630 84 230 88 630 84 229 Accumulated profit/loss from prior years 3.5.1. -16 -4 121 7 536 0 Net profit/loss 3.5.1. -3 662 4 148 -159 7 537 Capital loans 3.5.4. 6 732 8 601 2 739 4 608 Total shareholders' equity 104 464 105 255 111 526 108 771 MINORITY INTEREST 291 273 0 0 PROVISIONS 0 84 0 0 APPROPRIATIONS 3.6. 0 0 2 134 0 LIABILITIES Deferred tax liability 3.7. 649 104 0 0 Long-term liabilities 3.8.1. 16 586 17 016 16 232 16 504 Short-term liabilities 3.8.2. 24 427 24 118 14 649 14 869 Total liabilities 41 662 41 238 30 881 31 373 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 146 417 146 851 144 541 140 144 28 BIOH T NOTES TO THE FINANCIAL STATEMENTS 1. ACCOUNTING PRINCIPLES Maintenance and Repairs Costs for maintenance and repairs are recorded as expenses The financial statements have been prepared in accordance with when occurred. The costs of renovating rented premises have Finnish Accounting Act. been capitalized under other capitalized expenses and will be depreciated on a straight-line basis over the remaining rental Preparation of the financial statements in conformity with gen- period. erally accepted accounting principles requires management to make estimates and assumptions that affect the amounts and Pensions figures in the financial statements. Actual results could differ from those estimates. The pension schemes and any additional pension benefits Amounts are presented in Finnish Markka (FIM) and are based required by Finnish law are arranged through pension insurance on the original value of transactions. companies. Pension costs are charged to the income statement for the period when earned. PRINCIPLES FOR VALUATION AND Foreign Currency Translation RECOGNITION OF REVENUES AND COSTS Receivables and liabilities in foreign currencies are translated Valuation of Fixed Assets into Finnish Markka at the exchange rate quoted by the Bank of Finland on the balance sheet date. The acquisition costs of fixed assets have been adjusted with exchange rate differences relat- Fixed assets are recorded in the balance sheet at historical cost ing to the purchase of fixed assets. net of grants received and depreciation. Depreciation is calculat- ed on straight-line basis over the useful life of the assets. ACCOUNTING PRINCIPLES OF The useful life times are: CONSOLIDATION Intangibles 5 – 10 years Goodwill 3 – 7 years Buildings 20 years Scope of Consolidated Financial Statements Other capitalized costs 5 – 10 years Machinery and equipment 3 – 10 years The consolidated financial statements include Biohit Plc and all companies in which the Group holds more than 50% of the vot- On January 1, 1999 the remaining value of before 1998 capital- ing rights. Subsidiary companies are included in the consolidat- ized R&D costs were FIM 6,8 million in the Group and FIM ed financial statements from the date of acquisition. 6,0 million in the parent company. From these 50% was amor- tized in 1999 and the remaining 50% was amortized during the Intragroup Shareholdings financial year 2000. The consolidated financial statements have been prepared using The goodwill relating to Locus genex Oy will be amortized the purchase method. The difference between the acquisition over 7 years. An exception has been made from the five year cost and the shareholders' equity corresponding to the acquired amortisation period because the investment is by nature long- holding is presented as goodwill. term. Intragroup Transactions and Margins Valuation of Inventories Intragroup transactions, unrealized internal profits, receivables Inventories are stated at the lower of cost, on a first-in-first-out and debts as well as intragroup distribution of profits are elimi- (FIFO) basis, or net realizable value. The value of finished nated in the consolidated financial statements. goods include an appropriate proportion of production over- heads in addition to the direct costs. Translation Differences R & D expenses The income statements of foreign group companies are translat- ed into Finnish Markka at the average exchange rate for the From 1998 on R & D costs are recorded as expense when year and the balance sheets at the exchange rate on the balance occurred. sheet date. Differences arising from the translation as well as those from translating shareholders' equity are recorded in the Revenue Recognition consolidated financial statements under "Accumulated profit/loss from prior years". Net sales are calculated as gross sales less indirect sales taxes and discounts. Revenues from products and services are recog- Deferred Taxes nized upon delivery. Deferred income tax liabilities and receivables have been accounted for on timing differences based on tax rates enacted at the balance sheet date. 29 BIOH T 2. NOTES TO THE INCOME STATEMENT 2.1. Net sales by Geographical Area Group Parent company FIM 1 000 2000 1999 2000 1999 Finland 3 845 4 986 5 037 4 986 Scandinavia 4 080 4 325 3 523 3 787 Rest of Europe 69 140 78 249 39 392 45 829 America 27 470 16 717 17 895 16 469 Other countries 39 633 17 914 14 387 11 574 Total 144 167 122 191 80 234 82 645 2.2. Materials and Services Group Parent company FIM 1 000 2000 1999 2000 1999 Materials Purchases during the year 44 373 30 379 15 940 14 612 Change in inventories - 835 -373 -716 -418 Total materials 43 538 30 006 15 224 14 194 External services 2 013 1 416 0 2 Total materials and services 45 551 31 422 15 224 14 196 2.3. Personnel Expenses and Number of Personnel Group Parent company Personnel expenses, FIM 1 000 2000 1999 2000 1999 Salaries and wages 38 058 29 135 22 382 20 593 Pension expenses 5 317 4 429 3 699 3 590 Other personnel expenses 4 279 4 252 2 674 2 322 Total 47 654 37 816 28 755 26 505 Salaries and fees of the management The salaries of the Group's Presidents totalled FIM 3.9 million (FIM 2.9 million in 1999). The fees to the members of the Board of Directors were FIM 0.2 (0.3) million in the parent company and Group. No pension arrangements other than those laid down by law have been made with the Presidents of Group companies. Group Parent company Average Number of Personnel 2000 1999 2000 1999 Office personnel 138 92 60 49 Factory personnel 84 92 84 92 Total 222 184 144 141 2.4. Financial Income and Expenses Group Parent company FIM 1 000 2000 1999 2000 1999 Dividend income from outside the Group 36 40 36 40 Interest income from long-term investments: From companies within the Group 0 0 519 249 From others 0 0 0 0 Total interest income from long-term investments 0 0 519 249 Other interest and financial income: From companies within the Group 0 0 380 0 From others 1 808 1 508 1 294 1 378 Total 1 808 1 508 2 193 1 627 Value adjustments of shares and holdings 0 0 -486 0 Interest expense and other financial expenses: For companies within the Group 0 0 -6 0 For others -2 426 -4 563 -1 797 -4 270 Total financial income and expenses -582 -3,015 -60 -2 604 Net foreign exchange gains/losses included in "Financial income and expenses" 120 346 264 285 30 BIOH T 2.5. Extraordinary Items Group Parent company FIM 1 000 2000 1999 2000 1999 Extraordinary income 1 452 2 000 0 2 000 Extraordinary expenses -32 0 -3881 -2 790 Total 1 420 2 000 -3881 -790 The extraordinary income in 2000 consisted primarily of the MFIM 1.4 profit received from the sales of the shares of Wolf Laboratories Ltd. In 1999 the extraordinary income derives from the compensation of FIM 2.0 million from the city of Kajaani. Extraordinary expenses in 2000 and 1999 in the parent company come from the Group contribution to the subsidiary. 2.6. Untaxed reserves Group Parent company FIM 1 000 2000 1999 2000 1999 Accelerated depreciation 0 0 -2 134 0 2.7. Income Taxes Group Parent company FIM 1 000 2000 1999 2000 1999 Current income taxes on extraordinary items -478 -560 1 125 221 Current income taxes on ordinary operations -862 -2 936 -1 164 -3 234 Change in deferred income tax liability/receivable -130 646 0 0 Total -1 470 -2 850 -39 -3 013 3. NOTES TO THE BALANCE SHEET 3.1. Tangible and intangible assets 3.1.1. Intangible assets Group FIM 1 000 Other Development capitalized expenses Intangibles Goodwill expenses Total Acquistion cost at beginning of year 5 813 3 863 35 739 3 340 48 755 Additions 0 994 2 836 852 4 682 Disposals 0 0 0 -120 -120 Acquisition cost at end of year 5 813 4 857 38 575 4 072 53 317 Accumulated depreciation and value adjustments at beginning of year -2 413 -1 083 -5 385 -1 566 -10 447 Accumulated depreciation on disposed assets 120 120 Depreciation for the year -3 400 - 548 -5 712 -506 -10 166 Accumulated depreciation and value adjustments at end of the year -5 813 -1 631 -11 097 -1 952 -20 493 Net book value at end of year 0 3 226 27 478 2 120 32 824 3.1.1. Intangible assets Parent company Development Other capitalized FIM 1 000 expenses Intangibles expenses Total Acquisition cost at beginning of year 4 994 3 320 2 210 10 524 Additions 0 616 845 1 461 Disposals 0 0 0 0 Acquisition cost at end of year 4 994 3 936 3 055 11 985 Accumulated depreciation and value adjustments at beginning of year -2 003 -915 -583 -3 501 Accumulated depreciation on disposed assets 0 0 0 0 Depreciation for the year -2 991 -418 -492 -3 901 Accumulated depreciation and value adjustments at end of the year -4 994 -1 333 -1 075 -7 402 Net book value at end of year 0 2 603 1 980 4 583 31 BIOH T 3.1.2. Tangible Assets Group Machinery and FIM 1 000 Buildings equipment Total Acquisition cost at beginning of year 78 25 525 25 603 Additions 13 569 11 368 24 937 Disposals 0 -2 534 -2 534 Acquisition cost at end of year 13 647 34 359 48 006 Accumulated depreciation and value adjustments at beginning of year 0 -12 663 -12 663 Accumulated depreciation on disposed assets 0 2 534 2 534 Depreciation during the year -169 -4 139 -4 308 Accumulated depreciation and value adjustments at end of the year -169 -14 268 -14 437 Net book value at end of year 13 478 20 091 33 569 3.1.2. Tangible Assets Parent company Machinery and FIM 1 000 Buildings equipment Total Acquisition cost at beginning of year 78 22 839 22 917 Additions 13 569 8 189 21 758 Disposals 0 - 2 534 -2 534 Acquisition cost at end of year 13 647 28 494 42 141 Accumulated depreciation and value adjustments at beginning of year 0 -11 767 -11 767 Accumulated depreciation on disposed assets 0 2 534 2 534 Depreciation during the year -169 -3 197 -3 366 Accumulated depreciation and value adjustments at end of the year -169 -12 430 -12 599 Net book value at end of year 13 478 16 064 29 542 Disposals consist mainly of fully depreciated assets which are no more used in the business operations. The book value of production machinery and equipment is FIM 12.3 million. 3.2. Shares and Holdings Group FIM 1 000 Shares Book value at beginning of year 1 249 Additions 323 Disposals -353 Book value at end of year 1 219 Parent company Loans receivable FIM 1 000 from companies Shares Group Capital within the companies Shares other loans Group Total Book value at beginning of year 34 165 1 232 2 853 0 38 250 Additions 1 766 0 0 8 539 10 305 Disposals 0 -353 0 0 -353 Value adjustments 0 0 0 0 0 Book value at end of year 35 931 879 2 853 8 539 48 202 The capital loan of FIM 2,9 million given by the parent company to Locus genex Oy meets the conditions laid down in section 5, para- graph 1 of the Finnish Companies Act. Other shares mainly consist of shares in Nordea, having a book value of FIM 0.8 million on 31 December 2000. 32 BIOH T Group Companies Parent company Group holding shareholding Biohit Ltd., Great Britain 100 % 100 % Pipette Doctor Ltd., Great Britain 50 % 0% Biohit S.A., France 91 % 91 % Biohit s.r.l., Italy 90 % 90 % Biohit Deutschland GmbH, Germany 100 % 100 % Biohit Japan Co., Ltd., Japan 100 % 100 % Biohit Systems, Inc., USA 95 % 95 % Vangard International Inc., Yhdysvallat 95 % 0% Finnbio Ltd., Russia 100 % 49 % Biohit OOO, Russia 100 % 100% Oy Finio Ab 100 % 100 % Locus genex Oy, Finland 100 % 100 % Vantaan Hienomekano Oy, Finland 100 % 100 % Vantaan Hienomekano Oy did not have business operations in 1999 and 2000. 3.3. Inventories Group Parent company FIM 1 000 2000 1999 2000 1999 Materials 5 698 4 787 5 461 4 745 Work in progress 307 480 146 113 Finished products/goods 16 500 8 853 4 440 2 948 Total inventories 22 505 14 120 10 047 7 806 3.4. Receivables Group Parent company FIM 1 000 2000 1999 2000 1999 LONG-TERM RECEIVABLES Receivables from Group companies Loans receivable 0 0 1 023 1 554 SHORT-TERM RECEIVABLES Receivables from companies within the Group Accounts receivable 0 0 21 795 14 180 Loans receivable 0 0 1 069 868 Other receivables 0 0 1 168 25 Receivables from other companies Accounts receivable 26 335 28 484 7 270 12 064 Loans receivable 243 50 50 50 Other receivables 4 371 6 643 1 376 6 117 Prepayments and accrued income 5 824 1 391 4 445 726 Total short-term receivables 36 773 36 568 37 173 34 031 Prepayment and accrued income include an investment grant receivable of MFIM 2.5. 3.5.Shareholders' Equity Shareholders' Equity Group Parent company FIM 1 000 2000 1999 2000 1999 Share capital at beginning of year 12 397 10 265 12 397 10 265 Share issue 383 2 021 383 2 021 Bonus issue 0 111 0 111 Share capital at end of year 12 780 12 397 12 780 12 397 Share premium fund at beginning of year 84 230 61 196 84 229 61 196 Premium from share issue 4 352 47 972 4 352 47 971 Bonus issue 0 -111 0 -111 Adjustment to 1999 share issue expenses 48 0 48 0 Transfer to cover accumulated losses 0 -24 827 0 -24 827 Share premium fund at end of year 88 630 84 230 88 630 84 229 Profit/loss from prior years at beginning of year 27 -29 275 7 537 -24 827 Transfer from share premium fund 24 827 0 24 827 Translation difference -43 327 0 0 Profit/loss from prior years at end of year -16 -4 121 7 537 0 Profit/loss for year -3 662 4 148 -159 7 537 Capital loans at beginning of year 8 601 8 271 4 608 4 608 Increase 131 330 131 0 Decrease -2 000 0 -2 000 0 Capital loans at end of year 6 732 8 601 2 739 4 608 Total shareholders' equity 104 464 105 255 111 527 108 771 33 BIOH T 3.5.2. Distributable equity at 31 December Group Parent company FIM 1 000 2000 1999 2000 1999 Profit/loss from prior years 27 -4 120 7 537 0 Profit/loss for the year -3 662 4 148 -159 7 537 Unrecorded interest on capital loans -2 140 -1 663 -230 0 Accelerated depreciation recorded in shareholders´equity -1 515 0 0 0 Total -7 290 -1 635 7 148 7 537 3.5.3. Share capital of the parent company 2000 2000 1999 No. of shares FIM % of shares % of votes No. of shares FIM A-shares (20 votes per share) 3 875 500 3 917 255 30.65 89.84 3 875 500 3 917 255 B-shares (1 vote per share) 8 767 877 8 862 343 69.35 10.16 8 389 037 8 479 421 Total 12 643 377 12 779 598 100.00 100.00 12 264 537 12 396 676 The shares of Biohit Plc comprise of A and B shares. At meetings of shareholders shares of series A entitle to 20 votes each and shares of series B to one vote each. In distribution of dividends, the dividend payable on shares of series B shall be higher by two per cent (2%) of the nominal value compared with the dividend payable on shares of series A. 3.5.4. Capital Loans On December 31, 2000, the parent company held FIM 2.7 million in capital loans and the Group held FIM 6.7 million. The terms for the capital loans conform to section 5, paragraph 1 of the Finnish Companies Act. FIM 2.3 million of the parent company's capital loans and FIM 4.9 million of those of the Group are from the company's main shareholders. 3.6. Appropriations Parent company FIM 1 000 2000 1999 Untaxed reserves 2 134 0 The appropriations derive from the accelerated depreciation. 3.7. Deferred income tax liabilities and receivables Group FIM 1 000 2000 1999 Deferred income tax receivables: From consolidation entries 1 595 749 Deferred income tax liabilities: From timing differences 649 104 Net 946 645 3.8. Liabilities 3.8.1. Long-term Liabilities Group Parent company FIM 1 000 2000 1999 2000 1999 Loans from financial institutions 11 830 16 951 11 733 16 504 Other long-term debt 4 756 65 4 500 0 Total long-term liabilities 16 586 17 016 16 233 16 504 Debts falling due in more than five years Loans from financial institutions 200 1 000 200 1 000 Other long-term debt 2 812 2 812 3.8.2. Short-term Liabilities Group Parent company FIM 1 000 2000 1999 2000 1999 Loans from financial institutions 5 250 4 700 5 171 4 700 Advances received 1 692 37 3 3 Accounts payable 5 771 7 654 2 934 2 410 Other liabilities 5 401 5 413 1 286 2 871 Accrued liabilities 6 313 6 314 5 193 4 782 Liabilities from Group companies Accounts payable 0 0 62 103 Total short-term liabilities 24 427 24 118 14 649 14 869 Aaccrued liabilities consist mainly of interest on long-term loans (in the parent company FIM 0.3 million) and holiday pay and related social security accruals (in the parent company FIM 4.4 million). 34 BIOH T 4. OTHER NOTES 4.1. Pledges given, Commitments and Contingencies Group Parent company 2000 1999 2000 1999 Loans for which mortgages and pledges have been given Loans from financial institutions 16 504 20 923 16 504 20 923 Corporate mortgages 20 150 20 150 20 150 20 150 Pledged shares, book value 0 353 0 353 Other long-term liabilities 4 500 0 4 500 0 Mortgages on real estate 4 500 0 4 500 0 Other short-term liabilities 158 0 0 0 Corporate mortgages 572 0 0 0 Other commitments Pledged shares, book value 0 819 0 819 Pledged securities 0 437 0 437 The parent company has given pledges of FIM 1.0 million on behalf of Group companies. Group Parent company Leasing commitments 2000 1999 2000 1999 Due for payment in the following year 5 723 5 260 2 746 3 600 Due for payment at a later date 19 492 16 507 11 888 12 491 Total 25 215 21 767 14 634 16 091 Leasing commitments include mainly fixed-term leasing and rental agreements which are effective more than one year. Other commitments On December 31, 2000, the social security payment commitments related with the unused personnel options of the parent company totalled to approximately FIM 0.3 million. Interest on capital loans On December 31, 2000, accumulated, unrecorded interest on capital loans was FIM 0.2 (0.0) million for the parent company and FIM 2.1 (1.7) million for the Group. Derivative contracts The group has no off-balance sheet financial instruments. 4.2. Ratios Financial ratios 1996 1997 1998 1999 2000 Net sales 75 144 86 101 100 369 122 191 144 167 Operating profit/loss 2 358 2 459 8 246 7 921 -2 868 % of net sales 3.1 2.9 8.2 6.5 -2.0 Profit/loss before extraordinary items and income taxes-1 316 1.044 2 679 4 906 -3 450 % of net sales -1.8 1.2 2.7 4.0 -2.4 Profit/loss before voluntary provisions and taxes -1 330 939 6 786 6 906 -2 030 % of net sales -1.8 1.1 6.8 5.7 -1.4 Return on equity, % *) *) 12.1 3.8 -4.6 Return on investment, % 7.5 10.8 12.2 8.5 -0.8 Equity ratio, % -9.5 -5.1 38.8 66.0 66.9 Investments in fixed assets 4 646 5 154 8 276 7 555 36 911 % of net sales 6.2 6.0 8.2 6.2 25.6 Research and development 3 700 3 700 4 400 7 552 10 094 % of net sales 4.9 4.3 4.4 6.2 7.0 Total assets 74 854 73 814 109 611 146 851 146 417 Personnel, average 146 154 164 184 222 *) Shareholders' equity negative in 1996 and 1997. 35 BIOH T Ratios per share 1996 1997 1998 1999 2000 Earnings per share, FIM -0.25 0.18 0.38 0.24 -0.37 - earnings per share, adjusted for dilution of options - - - 0.22 -0.35 Equity per share, FIM -1.33 -0.66 4.11 7.88 7.73 Price/earnings (P/E) - - - 102 -101 Dividend per share, FIM 0 0 0 0 0 Dividend per earnings, % 0 0 0 0 0 Effective yield of shares, % 0 0 0 0 0 Price development of B-share, FIM - average price - - - 26.99 44.18 - lowest price - - - 22.30 24.97 - highest price - - - 35.67 80.27 - price on December 31, 2000 - - - 24.56 36.86 Market price for B-shares 206 000 323 215 Market price for the entire capital stock FIM 1 000 (assuming that market price of A-share is the same as B-share´s) - - - 301 169 466 079 Development of exchange of B-shares, pcs 1000 - - - 1 240 3 647 - % of total amount of shares - - - 16.58 41.93 Average number of shares, adjusted for share issues 5 753 537 6 215 181 6 264 526 11 354 957 12 573 123 - adjusted for dilution of options - - - 12 066 730 13 275 579 Number of shares at the balance sheet date, adjusted for share issues 5 753 537 6 253 537 10 264 537 12 264 537 12 643 377 - adjusted for dilution of options - - - 12 976 310 13 345 833 Turnover and Average Price of Shares 18.6.1999 - 29.12.2000 7,000,000 10 Monthly Average Pricei EUR Monthly Turnover EUR 6,000,000 8 5,000,000 4,000,000 6 3,000,000 4 2,000,000 2 1,000,000 0 0 9 9 9 0 0 0 99 99 99 99 00 00 00 00 00 00 00 00 00 /9 /9 /9 /0 /0 /0 6/ 7/ 8/ 9/ 1/ 2/ 3/ 4/ 5/ 6/ 7/ 8/ 9/ 10 11 12 10 11 12 Turnover EUR Average Price 36 BIOH T 4.3. Shares and shareholders Shares and voting rights The shares of Biohit Oy comprise of A and B shares. At meetings of shareholders shares of series A entitle to 20 votes each and shares of series B to one vote each. In distribution of dividends, the dividend payable on shares of series B shall be higher by two per cent (2%) of the nominal value compared with the dividend payable on shares of series A. Share capital of the parent company 2000 2000 1999 No. of shares FIM % of shares % of votes No. of shares FIM A-shares (20 votes per share) 3 875 500 3 917 255 30.65 89.84 3 875 500 3 917 255 B-shares (1 vote per share) 8 767 877 8 862 343 69.35 10.16 8 389 037 8 479 421 Total 12 643 377 12 779 598 100.00 100.00 12 264 537 12 396 676 During the first subscription period of the personnel options, i.e., on 1.1.-1.4.2000 the personnel of Biohit subscribed altogether 378,840 B- shares of the issued total of 400,000. Correspondingly, share capital increased, on the basis of the decision by the Board of Directors, by EUR 64,402.80. The subscription price was FIM 12.50 per share. As a result of the subscriptions the total number of shares rose to 12,643,377 pieces. The share capital increased to EUR 2,149,374.09. According to the Articles of Association, the Company´s minimum share capital is 1.063.101,29 euros and the maximum share capital is 4.252.405,16 euros within which limits the share capital can be raised or lowered without amending the Articles of Association. The Company does not possess own shares. The Board of Directors does not have outstanding authorization to issue shares, convertible bonds or option loans or acquire shares in the Company. Ownership of shares by sector on January 19, 2001 Number of shareholders Number of shares pieces % pieces % 1. Companies 211 5.01 2 866 370 22.67 2. Financing and insurance institutions 7 0.17 131 598 1.04 3. Public organizations 2 0.05 519 600 4.11 4. Non-profit organizations 21 0.50 75 490 0,60 5. Households 3 939 93.51 8 625 457 68,22 6. Foreign 32 0.76 419 270 3.32 Shares which are not entered into the book-entry system 5 592 0,04 Total 4 212 100.00 12 643 377 100.00 Nominee-registered shares (in total 4) 94 065 0.74 Ownership according to the number of shares owned on January 19, 2001 Number of shareholders Number of shares pieces % pieces % 1-1 000 3 752 88.98 1 251 963 9.90 1 001-5 000 367 8.70 777 429 6.15 5 001-10 000 44 1.04 346 570 2.74 10 001-50 000 29 0.69 550 509 4.36 Over 50 000 25 0.59 9 711 314 76.81 Total 4 217 100.00 12 637 785 99.96 Shares which are not entered into the book-entry system 5 592 0,04 Total 12 643 377 100.00 37 BIOH T Major shareholders on January 19, 2001 10 major shareholders according to number of shares A-shares B-shares Total % Suovaniemi, Osmo 2 285 340 977 207 3 262 547 25.80 Biocosmos Oy 734 869 734,869 5.81 Interlab Oy 610 996 610 996 4.83 Suovaniemi, Ville 208 280 371 300 579 580 4.58 Suovaniemi, Joel 208 280 345 300 553 580 4.38 Härkönen, Matti 57 200 459 300 516 500 4.09 Suovaniemi, Oili 121 600 340 630 462 230 3.66 Erja-Yhtymä Oy 400 000 400 000 3.16 Suovaniemi Vesa 74 800 305 417 380 217 3.01 LEL Työeläkekassa 361 600 361 600 2.86 10 major shareholders according to number of votes A-shares B-shares Total % Suovaniemi, Osmo 45 706 800 977 207 46 684 007 54.10 Erja-Yhtymä Oy 8 000 000 8 000 000 9.27 Merikortteli Oy 6 000 000 6 000 000 6.95 Suovaniemi, Ville 4 165 600 371 300 4 536 900 5.26 Suovaniemi, Joel 4 165 600 345 300 4 510 900 5.23 Erja-Kiinteistöt Oy 4 000 000 4,000,000 4.64 Suovaniemi, Oili 2 432 000 340 630 2 772 630 3.21 Suovaniemi, Vesa 1 496 000 305 417 1 801 417 2.09 Härkönen, Matti 1 144 000 459 300 1 603 300 1.86 Biocosmos Oy 734 869 734 869 0.85 Notices according to the section 2, paragraph 9 of the Finnish Securities Market Act Erja-kiinteistöt Oy announced on January 10, 2000 that its ownership of the share capital and number of votes of Biohit Plc. has decreased so that its ownership after the change was the following: Of share capital Of votes Erja-kiinteistöt Oy A-shares 1.63% 4.66% B-shares 3.21% 0.46% Total 4.84% 5.12% The change was caused by a normal transaction related with the sales of shares. The effective date of the change was January 7, 2000. Erja-kiinteistöt Oy announced on January 25, 2000 that its ownership of the share capital and number of votes of Biohit Plc. has decreased so that its ownership after the change was the following: Of share capital Of votes Erja-kiinteistöt Oy A-shares 1.63% 4.66% B-shares 0.00% 0.00% Total 1.63% 4.66% The change was caused by a normal transaction related with the sales of shares. The effective date of the change was January 24, 2000. 38 BIOH T Ownership by management on January 19, 2001 The members of the Board and the President of the Company owned a total of 2 285 340 A-shares and 2 388 072 B-shares on January 19, 2001.This in total stands for 36.96% of the shares and 55.74% of the votes in the Company. Additionally, their option rights unsubscribed stand for 8.75% of the issued option rights for personnel, which is 0.27% of the share capital and 0.04% of the votes Personnel and other option rights During the first subscription period of the personnel options, i.e., on 1.1.-1.4.2000 the personnel of Biohit subscribed altogether 378 840 B- shares of the issued total of 400 000. Correspondingly, share capital increased, on the basis of the decision by the Board of Directors, by EUR 64 402.80. The subscription price was FIM 12.50 per share. As a result of the subscriptions the total number of shares rose to 12 643 377 pieces. The share capital increased to EUR 2 149 374.09. The new shares give the right for dividends as of the fiscal year, which commenced on January 1, 2000. The personnel options of the second stage entitle to subscribe altogether 400 000 pieces of Biohit's B-shares between January 1 2002 – April 1, 2002 for a price of FIM 20. The 625 000 rights of option subscribed by Martin John Anthony Williams and Robert Erwin Williams, the owners of Jencons Scientific Ltd. Acting as the distributor for Biohit's products, entitle to subscribe 625 000 b-Shares of Biohit for a price of FIM 10 between April 26, 1999 – September 30, 2002. . Formulas used in calculating key ratios Return on equity, % Profit before extraordinary items – income taxes for the period x 100 Shareholders´equity – capital loans + minority interest (average over the year) Return on capital employed, % Profit before extraordinary items + interest and other financial expenses x 100 Total assets – non-interest-bearing liabilities (average over the year) Equity ratio, % Shareholders´equity – capital loans + minority interest x 100 Total assets – advance payments received Earnings per share, FIM Profit before extraordinary items – income taxes for the period – minority interest Average number of shares, adjusted for share issue Equity per share, FIM Shareholders´equity – capital loans Number of shares at the balance sheet date, adjusted for share issues Dividend per share, FIM Dividend for the period x 100 Number of shares at the balance sheet date, adjusted for share issues Dividend per earnings, % Dividend/share x 100 Earnings per share Effective dividend yield, % Dividend, adjusted for share issue/share x 100 Stock exchange price on December 31, adjusted for share issues Price/earnings, (P/E) Stock exchange price on December 31, adjusted for share issues Earnings per share 39 BIOH T PROPOSAL OF THE BOARD OF DIRECTORS AND AUDITORS´ REPORT Proposal for the Distribution of Profit The distributable earnings of the Parent Company are FIM 7 148 320.81 The Group does not have distributable earnings. The Board of Directors proposes that no dividends be paid and that the loss for the period of FIM 159 003.98 be transferred to the retained profit/loss account from previous years. Helsinki, February 14, 2001 Reijo Luostarinen Osmo Suovaniemi Mårten Wikström Chairman of the Board Member of the Board of Directors Member of the Board of Directors of Directors President Auditor's Report to the Shareholders of Biohit Plc. We have audited the accounting records, the financial statements and the corporate governance of Biohit Oy for the financial year 1.1. – 31.12.2000. The financial statements, which include the report of the Board of Directors, the income statement, balance sheet and notes to the financial statements of the Group and parent company, have been prepared by the Board of Directors and the Managing Director. Based on our audit we express an opinion on these financial statements and the corporate governance. We have conducted our audit in accordance with the Finnish Standards on Auditing. Those standards require that we perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used as well as evaluating the overall financial statement presentation. The purpose of our audit of corporate governance is to examine that the members of the Board of Directors and the Managing Director have legally complied with the rules of the Companies' Act. In our opinion the financial statements have been prepared in accordance with the Accounting Act and other rules and regulations govern- ing the preparation of financial statements. The financial statements give a true and fair view, as defined in the Accounting Act, of the result of operations as well as the financial position of the Group and parent company. The financial statements including the consolidated financial statements can be adopted and the members of the Board of Directors and the Managing Director of the parent company can be discharged from liability for the financial year audited by us. The proposal by the Board of Directors regarding the handling of the distrib- utable earnings is in compliance with the Companies´ Act. Helsinki, February 20, 2001 SVH Pricewaterhouse Coopers Oy Authorized Public Accountants Hannele Selesvuo Authorized Public Accountant 40 BIOH T ADMINISTRATION AND SCIENTIFIC ADVISORS Board of Directors Reijo Luostarinen, D.Sc.(Econ.). Current Chairman of the Board of Biohit and member of the Board since 1993. Professor of International Business at the Helsinki School of Economics and Business Administration (HSEBA). Head of the faculty and Director of the International Business (IB) Program and Director of the Center for IB-Research. Chairman or member of the board of many other educational units at HSEBA. Vice-Rector of HSEBA 1990-1995. Docent at the Helsinki University of Technology and at the University of Vaasa. Visiting professor or guest lecturer in 23 different countries. Asla Fulbright scholar at the University of Michigan. President of the European International Business Academy and Regional Chairman of the Academy of International Business (USA) in Europe. Board member of some scientific foundations. Chairman of four international academic conferences. Senior advisor of international business for different U.N.-organizations, some govern- ments and ministries. Owner of 2 consulting firms, chairman and stockholder of 3 companies and board member of altogether 10 companies in 1980-1997. Author of 15 books, chapters in 5 books, editor of 2 books and author of 70 articles, working papers and research papers. Editorial board member of 5 international scientific journals. International operations and global business strategy expert in companies located in different countries. Osmo Suovaniemi, M.D., Ph.D. Founder, President and CEO and member of the Board of Biohit Plc. His background as the founder, main shareholder, Chairman and CEO of Labsystems Oy and Eflab Oy, and as a major innovator of the prod- ucts of those companies, demonstrates his experience and skills in this field of business. He received the M.D. in 1972 and the Ph.D. in 1994, both from the University of Helsinki, Finland. He has also completed a study program (JOKO) at the Helsinki School of Economics and Business Administration 1976-1977 and at the Finnish Institure of Management (LIFIM) in 1982. In 1976 he was award- ed a prize by the Finnish Foundation of Inventors for the single- and multichan- nel Finnpipette invention. He has served as board member, Vice-Chairman and Chairman of the General Industry Group in Finland between 1978 - 1986 and as board member of the Confederation of Finnish Industry in 1986. In 1984 the Finnish economic reporters awarded him an honorary prize for his economic achievements in 1983. Dr. Suovaniemi is the inventor who has been awarded most patents in Finland (58 pcs) and a few hundred worldwide, mainly in the fields of medical diagnostics, optics and mechanics. Mårten Wikström, M.D., Ph.D. Member of the Board of Biohit since 1997. Professor in Medical Chemistry at the University of Helsinki. Academy professor since 1996. He is actively engaged in basic scientific research (biochemistry, bio- physics, molecular biology) at the University of Helsinki where he directs an international research team (Helsinki Bioenergetics Group). Prof. Wikström has over 160 original publications on basic research in internationally renowned jour- nals and he has received several scientific awards, e.g., the Anders Jahre Medical Prize for young researchers (1984), the A. I. Virtanen Prize (1989), the Matti Äyräpää Prize (1993), and the main Anders Jahre Medical Prize (1996). He is member of Societas Scientarum Fennica and foreign member of the Royal Swedish Academy of Sciences. In the 1985 - 1989 period he served as Director of Research and as Operative Director at Eflab Oy and Labsystems Oy. 41 BIOH T Management Team Osmo Suovaniemi, President & CEO Pertti Ekholm. Product Design. With Biohit since 1988. Mr. Ekholm has worked, e.g., for ITT, Nokia Electronics, Outokumpu and Kone Instruments. In 1973 he joined Labsystems as Chief Instrument Designer, where he was responsible for the design of key instrumentation such as the vertical light path analyzers and mechanical Finnpipettors. He has been the inventor in numerous patents both in Finland and abroad. Jussi Heiniö. Legal Affairs. LL.M. With Biohit since 1997. Mr. Heiniö graduated from the Faculty of Law at the University of Helsinki in 1988. Between 1988-1992 he acted first as an assistant lawyer and from 1992 as an Attorney-at-Law at Law Office Matti Oksala Ky. Between 1989-1990 he worked as a junior lawyer undergoing court training and later on as a judge in the District Court of Vantaa, Finland. Helena Hentola. Information Management and Communications. M.Sc. (Econ., International Business). With Biohit since 1995. Mrs. Hentola received the M.Sc. from the Helsinki School of Economics and Business Administration (HSEBA) in 1992 after which she continued her studies at HSEBA and the University of Helsinki. In 1992 she studied at the Monterey Institute of International Studies in the U.S. She has acted as Project Coordinator of the Finland's International Business Operations (FIBO) -Research Program at HSEBA in 1995, as Research Associate and additional lecturer at the Dept. of International Business at HSEBA between 1994 - 1995 and as Researcher of the FIBO-Program between 1993 - 1994 and 1990 - 1991. Ritva Kara. Domestic Sales and Marketing. B.Sc. (Engineering, Measurement and Adjustment). With Biohit since 1988. In addition to having received a B.Sc. from the Helsinki Institute of Technology in 1979, Mrs. Kara is a qualified laboratory techni- cian. She has also completed a study program at the Institute of Marketing, Helsinki, in 1990. Before joining Biohit, she worked as Service Engineer and Product Specialist at Labsystems Oy in 1980 - 1988, as medical laboratory technician at the Central Hospital of Vaasa between 1979 - 1980 and 1969 - 1976 and between 1965-1969 as laboratory technician at Rikkihappo Oy, which today belongs to the multinational Kemira Group. Jukka Kilpiö. International Sales and Marketing. M.Sc. (Analytical Chemistry). With Biohit since 1988. In addition to specializing in chemistry, Mr. Kilpiö has completed a study program (JOKO) at the Helsinki School of Economics and Business Administration in 1984. He has acted as Marketing Director for Nordion Instruments Oy between 1985 - 1988, as Marketing Manager of Labsystems Oy, as Product Manager for analyzing systems at Labsystems Oy between 1980-1985, as an occupa- tional health chemist between 1975-1980 and as a laboratorian at the Department of Public Health at the University of Helsinki between 1971-1975. 42 BIOH T Sari Mannonen (née Ylätupa). International Sales and Marketing. Ph.D., (Biochemistry). With Biohit since 1995. Mrs. Mannonen received her M.Sc. in 1990 and Ph.D. in 1996 from the University of Helsinki. She has also taken a course in Good Laboratory Practise (GLP) in the Netherlands in 1990. She has acted as biochemist and Product and Marketing Manager at Locus genex Oy between 1989-1995, in duties related to the development of diagnostic tests at Labsystems Oy between 1987-1988 and as an assistant and teacher at the Dept. of Biology at the University of Helsinki between 1987-1988. Terttu Ollikainen. Accounting and Finance. M.Sc. (Econ.). With Biohit since 1996. Ms. Ollikainen received the M.Sc. from the Turku School of Economics, Finland in 1985. She has acted as the Financial Controller of the Finnish subsidiary of the U.S. - based company Fluke between 1993-1996, worked at Felix Schoeller Jr. In Germany at staff administration in 1992, as Financial Manager and Vice-President of Nelko Oy between 1986-1991 and as teacher of accounting at the Turku School of Economics between 1985-1986. Seppo Riikonen. Quality Systems. Measurement and Adjustment Technician. With Biohit since 1989. In addition to having completed the Helsinki Institute of Technology in 1982, Mr. Riikonen has received the Diploma in Marketing from the Institute of Marketing, Helsinki in 1992. He has acted as the Service Manager at Nordion Instruments Oy Ltd between 1985-1989, as Service Technician at Oriola Oy between 1984-1985 and as Project Technician at Orion Analytica Oy between 1982- 1984. Oili Suovaniemi. General Management. With Biohit since 1988. Mrs. Suovaniemi has completed a study program (JOKO) at the Helsinki School of Economics and Business Administration in 1977 - 1978. In 1969 she graduated as a registered nurse. Between 1970 - 1986 she worked for Labsystems Oy and Eflab Oy in duties related to general and financial administration. Erkki Vesanen. R & D and Production. M.Sc. (Engineering, Electronics). With Biohit since 1989. Mr. Vesanen has acted as Managing Director of Innomedia between 1986- 1989 and between 1976 - 1986 at Labsystems Oy in several duties related to product development, production, marketing and international operations. 43 BIOH T Managing Directors of Subsidiaries Berthold F. Borowski. Managing Director of Biohit Deutschland GmbH since 1999. Technical education and employment at Chemische Werke Hols AG 1952-1957. Member of the German Air Force 1957-1990 with the following education/training: Electronics, military security, personnel management, accounting, and logistics. Military cross of honour in gold. Head of the technical resource management, Hausring GmbH Cologne 1991-1993. Logistics Manager for Anthos Microsystems GmbH, Cologne 1993-1995. Responsible for service, technology and logistics for Biohit Deutschland GmbH 1995- 1997. Régis Carnis. Managing Director of Biohit France S.A. since its establishment in 1991. M.Sc. (Biochemistry). Mr. Carnis received his M.Sc. from the University of Paris in 1976. During his studies he worked as a laboratory technician at the Department of Medical Chemistry in the laboratories of haematology and bacteriolo- gy. In 1976 - 1983 he received experience in the diagnostic field when working as a Sales Engineer, Product Manager, and later as Sales Director in the French company Sebia S.r.l. specializing in electrophoresis and biochemistry analyzers. He acted as Sales Director for Ames, an American dry chemistry company, before setting up the subsidiary of Labsystems in France in 1984. Erik Forsblom. Managing Director of Locus genex Oy since 1996. M.Sc. (Biochemistry). Mr. Forsblom has an over 20 years' experience within the field of clin- ical chemistry. Between 1973-1981 Mr. Forsblom worked as laboratory technician and chemist (assistant chemist and departmental chemist) at the Clinical Laboratory Center and at the United Clinical Laboratories in Helsinki. In 1981 he joined Labsystems Oy as research chemist. Between 1984 and 1988 he acted as Production Manager of the Diagnostics Division and between 1988-1990 as Assistant Director of the Diagnostics Division of Labsystems Oy. In 1990 Mr. Forsblom joined Biohit Plc. where he acted as Marketing Manager/Regional Export Manager until 1996. Robert P. Gearty. Managing Director of Biohit Inc. since April 2000. Mr. Gearty earned a B.A. in Biology from St. Michael's College in Winooski, Vermont in 1977. After graduation, Mr. Gearty was employed by Rossignol Ski Company, Williston, Vermont. In 1979, he joined Vangard International, Inc., a U.S. distributor of labora- tory products, including the line of liquid handling products manufactured by Labsystems Oy, Helsinki, Finland. The association with Dr. Suovaniemi's products continued into the 1990's with Vangard's U.S. introduction and subsequent distribu- tion of the Biohit line of liquid handling products. At Vangard Mr. Gearty most recent- ly served as Sales Manager. In April 2000 Mr. Gearty was appointed Managing Director of Biohit Inc. upon Biohit's acquisition of Vangard International. 44 BIOH T Hannele Laine. Acting General Manager of Finnbio Ltd. M.Sc.(Econ.) (Swedish School of Economics, Helsinki, 1991: Business Management and Administration), B.A. (University of Helsinki, 1977: Russian, education and pedagogy, English). With Biohit since 2000. Course on operations in the Baltic area, Tallinn, 1997-1998, Russian studies at the University of Moscow 1973-1974. Areas of specialization: Russia, the Baltic countries and Poland. Mrs. Laine has acted, e.g., as the Project Manager responsible for the start-up of the Polish and Russian subsidiaries of Teknoware Oy 1999-2000, as the Managing Director and head of the Russian opera- tions of Ob-Server Oy 1994-1997, as the secretary of management with specialization in the Russian market of Oy AGA Ab 1992-1993, as assistant for the construction pro- jects exported by Thomesto Oy to Russia 1987-1988, and as the assistant for Russian exports and contact person of the Vienna unit of Labsystems Oy 1983-1987. Enrico Marzi. Managing Director of Biohit s.r.l., Italy since its establishment in 1992. Mr. Marzi graduated in 1968 with a Diploma of Industrial Chemical Technology from Fabriano High School and further in 1974 with a Degree in Chemistry from Camerino University MC, Italy. Up to 1980 Mr. Marzi acted as Professor of Organic Chemistry and at the same time studied at the Postgraduate School Mario Negri Institute special- izing in drug metabolism. He spent the year 1980 at the Pharmacological Department of the University of Manchester for a specialization in Pharmacokinetics. In 1981 he acted as Product Specialist for the EKTACHEM line at KODAK, Italy. In 1982 he joined Farmitalia Carlo Erba Diagnostic Division as Product Manager for Clinical Chemistry Instruments. In 1985 he began to cooperate with Labsystems Oy as con- sultant in order to study the Italian diagnostic market. In 1986 - 1991 he acted as General Manager of Labsystems Italy. In 1991 he joined Menari as the Italian General Manager for the Diagnostic Division. Takao Saito. Managing Director of Biohit Japan Co., Ltd. since 1998. Mr. Saito grad- uated from Waseda University in 1969 with a bachelor of commerce degree. Upon graduation he was employed by a trading company for electronic equipment and parts and engaged in the export business. In 1975 he joined Nichiryo Co., Ltd., a manufac- turer of liquid handling instruments. He started the export business and developed dis- tributor contacts in over 30 countries. Export sales totalled eventually to 40% of the company's total sales. In 1989 he joined Lasertech Co., Ltd, a manufacturer of semi- conductor inspection systems and laser scanning microscopes. He stayed in California, U.S. as the executive vice president of Lasertech's U.S. corporation and engaged in sales of these products to major U.S. companies for 3 years. Mr. Saito joined Biohit in 1994. Richard Vaughton. Managing Director of Biohit Ltd. since its establishment in 1992. Qualified as a medical microbiologist, he worked in the UK for two major general hos- pitals, subsequently working as a microbiologist at the Riyadh Al Kharj Programme in Saudi Arabia for the Ministry of Defence. In 1985 he relocated to Scotland working for Flow Laboratories in Product Management and export sales and a year later moved to Lugano Switzerland to work as an International Product Manager for Flow International S.A., later relocating with the Swiss office to Milano, Italy. Subsequent to the takeover of Flow by ICN Biomedicals, he was appointed Marketing Manager, Microplate Technology in ICN International, High Wycombe, Bucks. ICN relocated these offices a year later to California, and Mr. Vaughton left to become a Director of BioConsult Ltd., working for an Italian company on a Biosensor project and for a number of other laboratory-focused companies, including Biohit. He also jointly founded and successfully sourced U.K. and U.S. funding for a new company manu- facturing laboratory equipment in Scotland. 45 BIOH T Scientific Advisors • Herman Adlercreutz, M.D., Ph.D., Professor (emer.) of Clinical Chemistry at the University of Helsinki. Director of Folkhälsan Research Center and Head of the Institute for Preventive Medicine, Nutrition and Cancer. At Biohit advisor for diagnostics and laboratory instrumentation. Current focus on the development of test kits for phytoestrogens. • Hannu Harjunmaa, Ph.D., Principal Scientist, VivaScan Corporation, Massachusetts, U.S. At Biohit advisor for liquid han- dling and laboratory instruments. Current focus on the research and development of new techniques for liquid handling. • Matti Härkönen, M.D., Ph.D., Professor (emer.) of Clinical Chemistry at the University of Helsinki. Chairman of the Board of Locus genex Oy. At Biohit advisor for diagnostics and laboratory instrumentation including liquid handling. Current focus on the gastric cancer test panel. • Frank Laxén, M.D., Ph.D., Consultant Gastroenterologist, Department of Medicine, Turku University, has actively studied the screening for and endoscopic detection of gastric precanceroses and early gastric cancer since 1978. At Biohit advisor for diagnostics. • Aavo Mikelsaar, M.D., Ph.D., Professor at the University of Tartu, Estonia in the field of human biology and genetics. Director of the Institute of General and Molecular Pathology, Medical Faculty. At Biohit advisor for cancer diagnostics. • Arto Orpana, Ph.D., Docent in biochemistry at the University of Helsinki. A clinical biochemist with a background of over 10 years of basic scientific research. At Biohit advisor for diagnostics and instruments (PCR- and liquid handling equipment) and development of PCR- and other applications. • Aarno Palotie, M.D., Ph.D., Professor, University of California Los Angeles, Dept. of Pathology and Laboratory Medicine. Serves at Biohit as an expert in genetic laboratory diagnostics. • Ari Ristimäki, M.D., Ph.D., Docent of Cell Biology, is actively engaged in basic science research (molecular cell biology) at the University of Helsinki and the Helsinki University Central Hospital. At Biohit advisor for diagnostics. Current focus on cyclooxygenase-2, basic research and general applications. • Eeva-Marjatta Salonen, Ph.D., Helsinki University Central Hospital HD Laboratories, Division of Virology. At Biohit advi- sor for diagnostics. Current focus on telomere research. • Nils-Erik Saris, Ph.D. 1964, M.D. h.c. 1990, Professor (emer.), Helsinki University, is actively engaged in basic scientific research (biochemistry, biophysics, clinical chemistry). At Biohit advisor for laboratory instruments including liquid handling. • Seppo Sarna, Ph.D., Professor of Biometrics at the Department of Public Health University of Helsinki, Finland. At Biohit provides biostatistical and epidemiological expertise. • Pentti Sipponen, M.D., Ph.D., Professor, is currently the Head of the Department of Pathology, Jorvi Hospital, Espoo, Finland which is a laboratory engaged in large histopathological routine and research. At Biohit advisor for diagnostics and diagnostic devices. Current focus on the gastric cancer test panel and lactose intolerance test. • Torkel Wadström, M.D., Ph.D., Professor of Medical Microbiology, Lund University, at Biohit advisor for diagnostics and laboratory instruments and development of applications for Helicobacter pylori diagnosis. Auditors The auditors of Biohit Plc. are Authorized Public Accountants SVH Pricewaterhouse Coopers Oy, Hannele Selesvuo, APA. 46 MAJOR EVENTS IN BIOHIT'S HISTORY Net sales Year Events FIM 1 000 1988 - Establishment of Biohit Oy - Basic research and market surveys - Electonic pipettor development - Establishment of Locus genex Oy 1989 - TEKES97 funding for the development of the electronic and mechanical pipettors, pipettor tips as well as microplates 745 1990 - World-wide introduction of the electronic pipettor 2 918 - Assembling of pipettors and injection moulding begins in Kajaani - Introduction of the first monoclonal antibodies 1991 - TEKES funding for the development of mechanical pipettors 12 740 - First deliveries of electronic pipettors - Establishment of the first subsidiary in France - Introduction of new monoclonal antibodies 1992 - Launch of the mechanical pipettor 25 234 - Launch of the multichannel electronic pipettor - Establishment of subsidiaries in Italy and the U.K. - Ph.D. Thesis of Tapani Tiusanen: An application invention of vertical measurement; the self-correcting, multiparameter measuring instrument 1993 - Launch of the multichannel mechanical pipettor 38 166 - Co-operation with Eppendorf and bioMérieux begins 1994 - Development of the renewed electronic pipettor 50 094 - Co-operation with Ortho Diagnostic Systems of Johnson & Johnson begins - Establishment of joint venture in Japan - Ph.D. Thesis of Osmo Suovaniemi: The vertical measurement invention, its applications and the invention of electronic liquid handling devices 1995 - Launch of several new liquid handling products 62 728 - Establishment of subsidiary in Germany - Co-operation with Eastman Kodak Co. Clinical Diagnostic Systems, later acquired by Johnson & Johnson begins 1996 - Reinforcement of international sales and marketing 75 144 - Improvement of the cost structure and quality of products - The gastric cancer test kit panel program begins - Patent application filed in the field of diagnostics for a method for screening the risk of gastric cancer - Ph.D. Thesis of Sari Ylätupa: An application invention of vertical measurement and immunoassays; the determination of cFn from blood samples and its importance in cancer diagnostics 1997 - Moving into new facilities in Helsinki 86 101 - ISO 9001 -quality system certification - Co-operation with Becton Dickinson and 3M begins - Receiving EUREKA98 status on the basis of which TEKES funding received for the gastric cancer test panel program 1998 - Production and injection moulding in Helsinki 100 369 - Locus genex Oy and Biohit Systems, Inc. become Biohit Group companies - External evaluation of the first test kit (Pepsinogen I) in the gastric cancer test kit program - Patent applications filed in the area of diagnostics for the following inventions: Method for detection of toxins and kit therefor, and diagnosis of early gastric cancer - Ph.D. Thesis of Auli Linnala: Basic research on Biohit's monoclonal antibodies (cFn and tenascin), which are related with cancer diagnostics 1999 - Listing on the New Market -list of the Helsinki Exchanges 122 191 - U.S. patent 5,895,838 granted and numerous patent applications filed in the area of liquid handling - Patent applications filed in the area of diagnostics for the following inventions: Method for the determination of disaccharidases and kit therefor, method to assess the risk for irreversible neurodamages, method for assessing the risk of peptic ulcer, and method for identifying an individual at risk for vascular and cancer disease 2000 - Completion of new production premises in Kajaani 144 167 - Accreditation of the calibration laboratory for liquid handling products - Continuation of aggressive patenting policy - Test panel for diagnosing Helicobacter pylori -infection and atrophic gastritis, as well as for screening the risk of gastric cancer and peptic ulcer successful in clinical evaluations. Tests for diagnosing lactose intolerance and SLE successful in clinical evaluations. Test panel for diagnosing celiac disease complemented with a new test and became ready for sales - Preparation to commence the global marketing and sales of diagnostic tests and analyzing systems - Commencement of the sales of instruments - Reinforcement of international collaboration and customer service organization through acquisitions in the U.S. and Russia TEKES = The National Technology Agency of Finland. 97 EUREKA = Europe-Wide Network for Industrial R & D. A framework through which industry and research institutes from 26 European countries and the 98 European Union develop and exploit the technologies crucial to global competitiveness and a better quality of life. 47 HEADQUARTERS BIOHIT OYJ Laippatie 1 00880 Helsinki, Finland Tel: 09-773 861 Fax: 09-773 86200 E-mail: email@example.com www.biohit.com FRANCE GERMANY ITALY JAPAN Biohit S.A. Biohit Deutschland GmbH Biohit s.r.l. Biohit Japan Co., Ltd. 2 Rue du Grand Chene Wankelstrasse 33 Via Cassino 59 NB Building 6F 78830 Bonnelles, France 50996 KöIn, Germany 20033 Desio (MI) Italy 2-15-10, lwamoto-cho, Chiyoda-ku Tel: +33-1-3088 4130 Tel: +49-2236-962 760 Tel: +39-0362-300 661 Tokyo, 101-0032, Japan Fax: +33-1-3088 4102 Fax: +49-2236-962 7640 Fax: +39-0362-301 225 Tel: +81-3-5822 0021 E-mail: email@example.com E-mail: email@example.com E-mail: email@example.com Fax: +81-3-5822 0022 E-mail: firstname.lastname@example.com RUSSIA U.K. U.S.A. Finnbio Ltd. Biohit Ltd. Biohit Inc., 23, ul. Prof. Popova Unit 1 3535 Route 66, Building 4, P.O.Box 308, 197376 Saint-Petersburg Barton Hill Way Neptune, N.J. 07754-0308, U.S.A. Russia Torquay, Devon England, TQ2 8JG Tel: +1-732-992-4900 Tel: +7-812-327 5327 Tel: +44-1803-315 900 Fax: +1-732-992-0557 Fax: +7-812-327 5323 Fax: +44-1803-315 530 E-mail: firstname.lastname@example.com E-mail: email@example.com E-mail: firstname.lastname@example.com BIOH T www.biohit.com