The Business of Biofabrication

The recent saga over the past year has been like watching a soap opera unfold in in terms of merger and acquisition propositions made by the 3D printing players in the market to court each other to make the so called “largest 3d printing company.”

There’s different angles one can take in terms of understanding the combinatorial potential from increase of shareholder value, complimentary industrial product portfolios or increase in revenue potential.

One interesting view angle would be to understand how a certain bioprinting portfolio combination would look and could that help predict the potential outcome of this story.

To start we can consider Nano Dimensions as a contender and well the reality is that they don’t have any specific bioprinting focus or program so it makes them the least desirable from the party as a partner in the space. So, it makes sense why someone like Stratasys wouldn’t be interested in a potential combination.

Next would be to try and dive a bit into Desktop Metal’s arrival into the bioprinting scene. I would say this has evolved in 3 phases to where they are now. The first move was to acquire German founded and based, EnvisionTEC back in January of 2021. EnvisionTEC brought with it the antiquated, but noteworthy Bioplotter 3D Printing System. This system was the first ever commercially available 3D bioprinter on the market, which makes it significant. It’s just it was also very over engineered for its time. So, it’s precision and durability are unmatched still probably to this day, but its price point is not justifiable by most labs given the immaturity of applications. Regardless, it put Desktop Metal on the bioprinting map. And this was only made more present when Desktop Metal then launched Desktop Health a month later as a way to further push their efforts into healthcare, particularly in the dental space. Last, Desktop Health former CEO, Michael Jafar, coordinated the 2021 acquisition of Boston based Beacon Bio, an application-based company that created a specific bioink for the potential treatment of damaged eardrums.

They still have some ways to go in terms of picking up momentum that was lost in the glory days of the Bioplotter when it first launched. Yet, while small, there’s something brewing at Desktop Health as they attempt to create further value for the space off the backs of Beacon Bio and the 3D Bioplotter.  

The next player to look at would be Stratasys.

Stratasys is the newest player to come into the scene just recently announcing its partnership with Collplant, an Israeli based bioink company, back in April. There are many good synergies in the partnership too. Both are Israeli present companies with the need for the other. Collplant has the need for a photopolymerization printer ecosystems and likewise Stratasys needs a bioink partner to help them begin to get their toes wet in the industry. While also a small step, they planted a flag in the ground and declared their interest to have a horse in the running by beginning to collaborate in an attempt to make bioengineered breast implants.  

The last of the trio in this current merger saga is 3D Systems.

3D Systems has the strongest combined portfolio in terms of bioprinting given their acquisitions and investments. It’s hard to say exactly when they started their programs, but United Therapeutics was definitely the catalyst.

United Therapeutics is a Maryland-based company lead by Martine Rothblatt. Martine has an impressive story as an entrepreneur and has achieved very bold goals. Her most notable thus far, was to save her daughter from her life-threating pulmonary hypertension by making a drug that would control her disease. While not fully curative, it has bought Martine time to focus on attempting to fully cure her daughter by creating a potential therapy, an engineered transplanted lung.

Martine is an important player here because she was the driving force to reach out to 3D Systems in the search for her daughter’s cure and convinced them to join her in her quest to create a bioengineered lung for transplantation.

3D Systems has bought into this vision and has been growing their bioprinting program ever since. They 1^st publicly came onto the scene with acquisition of Allevi, a desktop 3D bioprinting company focused on serving researchers, they soon followed with the acquisition of Volumetric Bio as well as the launch of Systemic Bio, whose combination of assets have created a drug discovery program. The last piece is their Tissue Program they are currently working to develop to deliver bioprinted breast implants.

The above has them covered on the 3 fronts of potential revenue generation for bioprinting, implants with a United Therapeutics partnership and their Tissue Program, a drug discovery platform imitative with Systemic, as well as an avenue to serve researchers with Allevi.

So, given the analysis above, again from a bioprinting portfolio perspective, the difficulty lies in that 3D Systems has its 3 bases covered and full, research, drug discovery, and implants

Therefore, another company wouldn’t introduce so much compliment as it would potentially actually introduce some friction into 3D Systems programs.

In contrast, Desktop Health has a research play with the bioplotter and an implant play for ear drums. Further, Stratasys has just stepped into the scene with a breast implant program that potentially rivals 3D Systems directly.

This chart puts it into better perspective

	Nanodimensions	Desktop Metal	Stratasys	3D Systems
Research	–	Yes	–	Yes
Drug Discovery	–	–	–	Yes
Implants	–	Yes	Yes	Yes

Therefore, given the friction between 3D Systems and Stratasys in needing to cancel out a breast implant program, and Desktop Metal and Stratasys in contrast would enhance their implant direction by having 2 different shots on goal, the Desktop Metal/Stratasys merger would grow the greatest amount of value. The value would also be highest for the industry as a whole by keeping competition among 3DS and Stratasys.

While hopefully, this sheds some light on the bioprinting aspect of these companies I want to make clear that there bioprinting programs aren’t measures of success for these company’s or who is going to have the highest overall growth. We could do an analysis on the risk vs reward ratio in terms of growth on their bioprinting programs, but given the diversification of these companies, bioprinting only plays a partial role in their overall all success.

Maybe more on this next time.