BioPorto performs development and sales activities within the area of biotechnology. Through its activities, the group is exposed to a number of risks that could significantly affect the group’s activity, in the event these risks were not correctly assessed or controlled. BioPorto’s policy is to identify and minimize the risks deriving from the group’s operations and to establish sufficient scope of insurance coverage. BioPorto has established risk-management as a formalized process for the purpose of generating a close correlation between the group’s ongoing goals and activities and the individual risk elements of the group’s sphere of activity.

The process comprises five sub-elements: identification, analysis, planning, action and follow-up. All heads of departments participate in efforts relating to the individual subsidiary activities where the individual risks are evaluated on the basis of probability and impact criteria. These efforts include both financial and non-financial risks. The board approves yearly targets for the risk-management efforts and a situation update is on the agenda of each board meeting.

Commercial and developmental risks

BioPorto is exposed to commercial risks, including market size, competing products, market penetration, the ability to establish alliances, and the possibility of obtaining patent protection.

BioPorto seeks to control these commercial risks by continuously monitoring and assessing the market situation and patent positions. The success of new diagnostic products and methods depends on the products being accepted in research environments and subsequently by the healthcare system. BioPorto expends significant resources on generating awareness of new biomarkers, supporting clinical experiments and establishing partnerships with a view to commercialization of the products. BioPorto’s competitiveness is also ensured by continuously achieving, enlarging and upholding patent rights within the established areas of focus.

There is a potential risk that BioPorto’s patent rights will be challenged by competing companies. BioPorto will aggressively seek to defend its rights in all significant markets. Legal action can last for long periods of time and be financially burdensome for the companies involved. If BioPorto were to enter into a legal defense of the group’s patent rights, this would affect the annual financial result and the capital resources.

Staff-related risks

BioPorto is dependent on being able to attract and retain skilled employees in order to create new product opportunities, uphold the group’s competitiveness and ensure growth and results. BioPorto offers its employees professional development opportunities, remuneration and incentive schemes at market levels, but also makes an active effort to create a positive working atmosphere where everyone’s effort is respected.

Production risks and quality-related risks

BioPorto actively works to establish alternative manufacturing possibilities for the group’s ELISA kits for the purpose of enhancing reliable supply. The first in-house produced Rat NGAL ELISA Kits were marketed in 2008, and additional kits will be produced in house. At the same time, BioPorto expects to negotiate collaboration agreements with new suppliers for existing and new ELISA kits.

BioPorto has a quality assurance system that is ISO13485:2003 certified. This includes procedures for all product-related processes, supplier audits, optimization plans and periodic management reviews.