3D Systems (NYSE:DDD) increased by 35% after the 3D printing firm released its first-quarter 2021 numbers that beat expectations. Its revenue climbed 17% y/y, and it was profitable from an adjusted basis.
While it is still early in the company’s reversal, things are looking good over the past couple of quarters. Revenue is increasing, debt has vanished, cash flow is positive, and non-core assets are divested.
But one of CEO Jeffrey Graves’ best moves has not got the news it deserves: increasing the firm’s push into the growing 3D bioprinting sector.
The Holy Grail in bioprinting is the use of technology to give a fully functional solid human organ, though there are also possibly many lucrative options in the short and intermediate terms.
3D Bioprinting Grows
3D Systems announced earlier this month it had bought Allevi, a small 3D bioprinting firm. “Bioprinting” usually means to use 3D technology to print human and animal cells to produce 3D, functional tissues.
3D Systems has partnered with United Therapeutics (NASDAQ:UTHR) since 2017. The goal of this partnership is to use bioprinting to create solid organs for human use, starting with the lung. While this has huge potential, any revenue from it is potentially many years into the future.
The Allevi purchase is important because it represents 3D Systems’ entrance into the bioprinting sector. On the recent Q1 earnings call, the CEO said buying Allevi makes his company well stationed across a broad range of applications from drug discovery to the printing of bones, arteries, and soft tissues and eventually solid-organs.
Allevi (formerly called BioBots) was started in 2014 by several graduates of the University of Pennsylvania. The company creates bioprinters, biomaterials and specialized software.
On 3D Systems’ first quarter call, Graves revealed that “Allevi has a strong technology foundation, brand, and distribution for this growing market with a presence in over 40 nations.” This market presence is not surprising, as Allevi got awards and recognition from the start.The company beat over 500 other companies to win “Most Innovative” at a 2015 Accelerator competition.
3D Systems did not release sales data for Allevi, but its annual revenue is reported by D&B to be around $1.9 million. While this number is only an estimate, it gives us a ballpark sum. 3D Systems produced revenue of $146.1 million in Q1, so its annual rate is around $584 million. Allevi’s revenue is not currently material to 3D Systems’ numbers, but its cross-selling and scale gives 3D Systems a path to quickly increase its new bioprinting sector.
Author: Blake Ambrose