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of a market with greater than $1 billion in annual sales potential.
Such growth has put Genoptix in the unusual position of needing to hire people to keep its momentum going, instead of firing people to preserve its cash. The company had 280 total employees heading into this year, including 55 sales reps, and 25 physicians who play critical roles as direct liaisons with hematologist/oncologist customers. Genoptix isn’t forecasting how much its total payroll will increase, but Nova says she expects to finish this year with 85 sales reps, and 37 doctors on staff.
Even though Genoptix was founded in 1999 and settled on its current strategy in 2003, Nova says her competitors haven’t adapted to its model. Some are huge, global companies, with departments that specialize in certain kinds of tests, but they aren’t structured like her company. “They want to run as many samples through as they can, as fast as they can, which we don’t think is really applicable to cancer,” Nova says. “More personal service is involved.”
Genoptix has all the same diagnostic machines in-house as the competition, so it doesn’t really have a technology advantage. It does have a slim pricing advantage. Based on the company’s experience running tests on bone marrow samples and current Medicare reimbursement rates, the average bone marrow diagnostic case costs about $3,000, according to the Genoptix 2008 annual report. Prices can vary, but for its extra layer of physician-caliber service, Genoptix charges an extra $75 for its report, Nova says.
Of course, fast-growing revenue numbers can hide a bunch of corporate ills. One of the challenges is managing the growth without letting expectations soar so high that you tick off your customers when you fail to deliver. Genoptix formed a partnership with FedEx early on to transport these precious bone marrow samples. So far, the company has never lost one, although Nova says it’s happened at other companies.
There also are challenges with personnel. Nova says she’s concerned that Genoptix sales reps are spread too thin to do the best job possible She says she wants to make sure she gets the right physicians to come work for Genoptix, the ones who can help shepherd the appropriate tests and keep the hematologist/oncologist customers happy. Nova says that’s critical to ensuring Genoptix can continue to grow.
“That relationship is essential for us,” Nova says. “It’s really difficult to call a doctor at one of the larger lab companies and get them to talk about an individual case, and have them know anything about it.”