Ladies and gentlemen, welcome to SenzaGen Audio Webcast with Teleconference fourth quarter 2021. For the first part of the conference, all participants will be in listen-only mode, and afterwards, there will be a question and answer session. Today, I am pleased to present CEO Peter Nählstedt and CFO Marianne Olsson. Please begin your meeting.
Well, thank you very much, and welcome to the 2021 year-end reporting. We can go to the next slide, please. We can immediately proceed to slide three, which says Financial Performance January to December 2021. I'm very, very pleased about how we performed in the second half of 2021. I think we delivered on all our objectives.
The result of that delivery is pretty clear when you look at the sales performance, where we have increased our sales organically with 73% during the second half. Including then the addition of a strategic acquisition of VitroScreen, where we only count two months, our growth is 152% for the second half.
That means that we nearly doubled the turnover of the company for the full year. Why we see this great development now is that we do have very strong organic sales with a lot of new customers, I will go into that, but also returning customers. We have a high activity level in the company. But we've also, I must say, have had a high activity level in the company for quite a few years with a big focus on sales and marketing effort, which we have communicated about, and it starts to pay off. While the sales developed very well, you can see that our operating loss increased.
The reason for that loss increase is one-time costs for the acquisition, and it is also some costs associated with the change of CEO that we had during the second half. The last message about our development financially is that we, at the moment, believe that we have sufficient capital to execute our organic growth plan. The graph on the right-hand side shows the rolling 12 months development. The reason why you get this graph looking like that is because you have that. You have new customers coming in, but you also have returning customers, and that is leading to an accelerated growth pattern.
Next slide, please. The type of customers that now work with our GARD test are global top industry players, billion-dollar companies, also smaller players for that matter. We are giving a few examples here from the cosmetic, medical device, consumer, chemical, and pharma industry. All these industries have a need to test for skin sensitization, and more and more of them are also progressing over to test on GARD. We have one institute on this picture, which is called RIFM. More about them later, but it is a member association with 70 large companies globally and mostly in North America.
Let's take the next slide, please. I will go into a little more detail on our profit and loss statement for 2021. I think we already commented on the top-line growth, which is consisting of organic growth of 74%, but also some inorganic growth with acquisition, and that we have an acceleration of growth in the second half, driven both by organic and acquisition growth. I'm also making a short comment on our gross margin. You do see that our gross profit is increasing, and we have a higher margin in the second half than we had in the first half.
I think that's something that unfortunately we need to see. Our sales are still a little lumpy between half years, and the customer mix can vary, and that is why we do see a little change in gross margin half year to half year. For the second half, it was higher than it was in the first half. Our cost base has increased because of an acquisition. We are now two companies' costs, at least for two months. I will also say that we are still investing, and we have been investing in growth during 2021. We've also invested in R&D. It's been mainly to support the ongoing OECD test guideline process to gather more data to support the ongoing application.
Next slide, please. Also, our balance sheet has increased, and that is of course very clear why, because we now have two companies in the group, meaning that the balance sheet will be a lot larger than if it's only one company. The two items that have increased, the goodwill is a result of the acquisition and part of a purchase price being allocated to goodwill. Intangible asset has also increased as a result of the acquisition. I'm pointing to the cash position.
We have almost SEK 70 million on the bank account by end of 2021. We believe that is enough funds to finance the growth plan of the company. Some of you could see that there is other liabilities on the liability side is increasing over last year. Included in this post is earn-out that we will pay for the acquisition of SEK 5 million, and there is also customer advances and salaries in this post.
Next slide, please. I have said that we are pleased about the achievements we had in 2021, so I will go through them in a little more detail. Next slide, please. The first achievement I want to highlight is the acquisition of VitroScreen, which is adding a lot of new growth opportunities for the group. VitroScreen is based in Milan. It's a GLP-certified CRO and research center. They are providing in vitro toxicology and preclinical services, and their key expertise is on 3D human tissue models, and also which can be in form of plates, but can also be in form of organoids with their proprietary testing platforms.
They have a broad customer base, 180 customers or so, and which is more than SenzaGen has. There is an opportunity for cross-selling across the group. There is a very broad portfolio of services which enables growth by selling more services to existing customers of SenzaGen. But there is also a growth possibility around innovation. We have already started to explore offers where we can combine the organoid and 3D human tissue model with GARD and generate more interesting data and more test opportunities for customers in both preclinical science and in toxicology testing.
We also have some efficiencies that we've started to explore, where we can increase our margins by being more efficient in purchasing, but also learning from each other how to perform tests. The first delivery on our joint group, we already did. We did it very early in 2022. We press released it last week, and we now have a joint offering for medical devices, where we combine in vitro toxicology testing with consultancy services, meaning that we have more or less a complete offer for the medical device industry if they want to test animal-free.
The illustration on the right-hand side is showing how our available market has improved with the acquisition of VitroScreen. We have moved from about $550 million market opportunity, which we had with GARD and some tests that we already implemented in the company, to nearly a third of a in vitro toxicology market, which we can now address with the complete test portfolio. The total market for in vitro toxicology is $9 billion, and it is in high growth mode.
Next slide, please. The growing customer base is what is driving our organic growth, and we have a substantial increase in orders from both new and existing customers. I'm gonna give you a couple of examples what happened in 2021. First one to mention is that we secured a new customer, which is one of the world's absolutely largest cosmetic companies. They started out with a first order of SEK 650 thousand, and then they placed a follow-on order of SEK 1 million, which is actually the company's largest order to date, meaning that they became a very important customer already year one with SenzaGen.
We secured an order for SEK 700 ,000 for GARDskin from one of the world's absolute top pharma companies. We secured a SEK 650 ,000 order for skin allergy and irritation tests from a global consumer product company. We achieved SEK 600 ,000 for combining GARDskin and GARDair from one of the leaders in the European industry of the chemical industry.
We expanded the collaboration with the RIFM, Research Institute for Fragrance Materials, with a project where we were awarded SEK 1.2 million. It is a combination of GARDskin, dose response, and phototoxicity, which we performed earlier in the year. All in all, we do see an increased interest in GARD from very large organizations and in many different industries. Next slide, please.
Based on customer feedback, we have decided to expand our test service offering beyond skin sensitization, and we also want to include pre-validated OECD tests for skin irritation and corrosion. We launched them in 2021. We secured orders for them, as was evident on the previous page. We have increased then our competitiveness because we are one of the Nordic region's few GLP-certified cell-based contract laboratories.
In early 2022, we also launched more tests for non-animal skin tox in Lund. We now have cytotoxicity testing and skin irritation for medical devices available. This is in line with our mission to offer best-in-class alternatives to animal testing across a variety of test areas. Next slide, please.
On the regulatory slide, we did make progress. In July, the EURL ECVAM's expert group, ESAC, recommended to the OECD to approve our GARDskin as a test method for skin sensitization. It's really a pioneering effort. It's the first genomic-based test that has reached this stage, and we can now state that our technology has been validated by an objective group of international experts.
When we will achieve the test guideline status, the GARD results, test results from customers can be used to register products across all OECD member countries, and that will significantly increase the demand for our method in our opinion. Currently, we have ongoing meetings with the OECD and with the OECD experts in the final phase of the test guideline process.
Furthermore, we did get an inclusion of GARD into the ISO 10993 standard series for evaluation of medical devices. You can take the next slide. Those were words on a very good 2021, and now I want to look a little bit ahead to what's going on in 2022. Next slide, please. We intend to continue executing on the accelerated growth strategy that we started to implement during 2021.
We have a vision of replacing animal testing with best-in-class in vitro toxicology. We have a vision of establishing new industry standards and thereby contribute to safer products in society. We want to reach this leadership position with a growth strategy focused on organic growth and acquisition growth. I will take a moment to explain both of them in some greater detail. Next slide, please.
When it comes to organic growth, we first of all want to continue to drive direct and distributor sales. We want to continue capturing new customers with our sales and marketing approach. Our sales and marketing approach is based on communicating our scientific excellence by focusing on customer needs. We have worked on it now for a few years.
We do have a method for how we can work on generating leads, maturing them into contacts, and eventually into sales, which we will continue to work with. When we have customers, we have a very customer-centric approach with working with them. We think it is creating lasting relationships. We have flexibility in study design, and we have a very quick turnaround time of samples, and we see proof of that with returning customers.
The third component of our sales growth is CROs, high-quality CROs that will complement our in-house capacity. We will have a select, very select few CROs, but we will have more distributors. We do have a number of distributors in certain areas where we are not reaching directly with our direct sales force.
Second component of organic growth is to obtain the regulatory status of GARD, so we work towards having OECD adopt GARD as an official test guideline. We work on the FDA, including GARD as a Medical Device Development Tool. Of course, we also work with the medical device industry to have GARD included in the ISO 10993 standard, where we are now in the annex.
We broaden our complementary test services so that we can increase the market share with our customers and create up- and cross-selling opportunities. We do that by expanding the regulatory toxicity offering, which we started to do last year, and we will continue to do this year.
We are a science and R&D-based company, so we see that there are other non-animal testing endpoints which require better solutions, and we now have expertise in the group, both in 3D human models of human tissue, but also in genomics and machine learning. We think it's a very exciting combination for developing new assets in the future. That's the organic growth. Next slide, please.
Lastly, it's the acquisition growth, and we think that this is a highly attractive industry where there are a number of companies, small, but with very specialized competencies, and that there is an opportunity to drive a consolidation. We see targets. We have a pipeline of targets where we want to look at growing and profitable companies that are complementary to SenzaGen in terms of geography, but can also be in terms of services.
Once we have acquired companies, we will work on realizing synergies. We believe in cross sales and realizing sales efforts, since both small organizations typically have problems to maintain its own direct sales force, we see an opportunity to share a sales force. We see opportunity to expand test sales and also become better in allocating tests to specific labs and also get some purchasing and cost efficiency.
Our philosophy is to integrate but maintain the brands, but also to drive on delivering some synergies. We do see that this strategy, we acquire new knowledge and new technology, we acquire more customers, and we acquire commercial operating labs. All of those sort of link together and create a more accelerated growth path for the company. Next slide, please.
To sum up, in 2022, we will continue to have sales and growth to remain our highest priority. We will continue to expand our lab operations to include more tests as well. We expect that the increased sales are going to lead to a decrease in operating losses, and we do estimate that the company has sufficient funds to complete the organic growth plan.
In the first half year, we will continue working on the integration with VitroScreen, where we have begun to combine our offerings to create sales synergies in industries such as medical device, but we will do more. We will continue not only to integrate, but we will also work actively with our acquisition agenda. In addition to these, GARDskin is now in its final phase of OECD approval.
We are working in and have several meetings with the expert committees and the members of OECD to complete this. We can take the next slide, and that is only saying thank you very much for your attention. With that, we are open to take questions.
Thank you. Ladies and gentlemen, if you wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will be a brief pause while questions are being registered. Ladies and gentlemen, let me remind you, in order to ask a question, please press zero one on your telephone keypad. Thank you. Ladies and gentlemen, if you wish to ask a question to our speakers, please press zero one on your telephone keypad. There are no questions. Dear speakers, back to you.
Okay. Well, thank you very much. I believe it was a very clear presentation since we didn't have a lot of questions. In any case, we look forward to continue communicating with our investor base as we build the company. Thank you very much.