The Business of Biofabrication

Over the past 2 years, it’s becoming almost a requirement to show Wall Street, if you have a significant and sizeable 3D printing company, you somehow have to have a bioprinting program. Whether you acquired a company, internally began a program, or are serving a specific customer set, CEOs love to name drop that they are thinking about this large market that’s on the horizon.

And while institutional investors watch these stories play out with interest, I’m sure several are also asking the question: “How does this contribute to EBIDTA in the next few quarters?” And the general answer has been: “Well, we will let you know”. And the truth is they probably don’t know, but the message is more of: “Hey, we’re a big company so it’s something we’re working on, keep investing.”

Can we read through the lines? Where’s the value and how soon? That’s the interest and those are the right questions to be answering.

The fact of the matter is there’s really only 3 ways to make money in the industry: research, drug discovery, or implants. Pick your puzzle is really the game, each with its variable ROIs, and growing risks respectively. The best players will be the ones that have programs in all 3, slowly growing from the simple groups of research to the more complex world of implants in incremental ways.

Some companies have begun this 3-pillar approach such as BICO and 3D Systems. While others are trying to catch up like Stratasys and Desktop Metal.

The venture capital world is skeptical on the space as past investments in “regenerative medicine” medical device companies have led to capital losses, such as Tengion and Advanced Tissue Sciences. Given the history, these regenerative medicine companies didn’t have 3D complexity and to think now a bioprinting business making money, let alone bring a medical device with cells to market…it’s complicated. And well, it is complicated.

So where are the wins?

As all industries take time, there has been very interesting activity in the space that hasn’t happened before at this rate. Acquisitions. The recent appetite from big players to begin to take shots on goal, particularly driven by the acquisition heavy time during covid, speaks to the growing foundation of startups paving the way for the growth of the industry, from bioprinters like Allegro 3D, Volumetric, and Allevi to bioinks like Advanced BioMatrix and Beacon Bio.

Hope this sheds some light. More next time.