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Bioprinting Stocks: 3D Systems and Desktop Metal

In the 3D printing world, 2021 is shaping up to be the year of bioprinting, with both 3D Systems (NYSE: DDD) and Desktop Metal (NYSE: DM) entering the commercial bioprinting market this year.

Bioprinting refers to using "bioinks" made of various biocompatible materials (some of which contain human or animal cells) to print three-dimensional, functional tissue. Current and potential future applications of the rapidly developing technology include accelerating the drug discovery process, producing body parts such as bones and soft tissue, and -- the ultimate goal -- producing solid organs for human transplantation.

Of course, neither 3D Systems nor Desktop Metal is anywhere close to a pure play on bioprinting, but they're in the market now, and that could prove to be a very good thing for their future performance.

Concept of a 3D printer printing a human or animal organ or body part.

Image source: Getty Images.

Bioprinting players: Overview

Company

Market Cap

Wall Street's Projected 5-Year Annualized EPS Growth Year-To-Date 2020 Return (Decline) 5-Year Return
3D Systems $4.8 billion 10% 275% 203%
Desktop Metal $3.3 billion N/A (30.2%) N/A

S&P 500

-- -- 14.8% 131%

Data source: YCharts. Data to June 25, 2021.

3D Systems

3D Systems, which is the largest pure-play 3D printing company by revenue and market cap, was profitable in the first quarter of 2021 from both an adjusted basis and under generally accepted accounting principles (GAAP). And Wall Street is projecting the company will be profitable, at least when adjusted for one-time items, for full-year 2021.

3D Systems first dived into bioprinting in 2017 through a research collaboration with United Therapeutics (NASDAQ: UTHR), a U.S.-based biotech company. The companies are working toward producing solid organs for human transplants. There is certainly no guarantee that anyone working toward this goal will be successful, though I do believe that eventually this momentous milestone will be achieved. Even if the 3D Systems-United Therapeutics partnership ultimately achieves its goal, any revenue from it will be many years away.

In May, 3D Systems made the leap into the commercial 3D printing market by acquiring Allevi (formerly BioBots), which sells bioprinters, bioinks, and related products to research entities around the world. The Philadelphia-based company is small but well regarded, or at least it was when I first wrote about it in 2015. Dun & Bradstreet estimates that Allevi's annual revenue is about $1.9 million. Currently, this business won't move the needle for 3D Systems, which has an annual revenue run rate of about $584 million. But it's a start upon which the company can build.

Last week brought news of another 3D Systems' bioprinting collaboration: The company is teaming with Israel-based CollPlant Biotechnologies (NASDAQ: CLGN) to use bioprinting to improve the solutions now available for breast reconstruction, a procedure many women choose to undergo following breast cancer. Once again, any possible revenue from this teaming is many years away.

Desktop Metal

That Desktop Metal, which joined the ranks of the publicly traded via a special acquisition company (SPAC) in December 2020, is now involved in bioprinting seems to fly under the radar of many investors.

The company -- which is not profitable and probably won't be for some time -- entered the commercial bioprinting realm in the same way as 3D Systems: via an acquisition. In February, Desktop Metal bought Germany-based EnvisionTEC, which is probably best known for its digital light processing (DLP) for polymers.

EnvisionTEC has also been a player in the bioprinting market for some time. Indeed, the company touts that its 3D-Bioplotter, launched in 2000, is "the most seasoned bioprinter in the market, backed by the most research." The company's bioprinters have been used to fabricate hyperelastic bone and ovary implants, according to its website. (ScienceDaily defines hyperelastic bone as a "3D-printed synthetic scaffold" designed "to support the growth and regeneration of new bone.")

We have no idea as to the revenue EnvisionTec generates from sales of its three models of 3D-Bioplotters. For that matter, the same can be said about EnvisionTec's entire business. Desktop Metal didn't disclose EnvisionTec's revenue when it acquired the company or when it released its first-quarter results.

Investors will probably learn more about 3D Systems' and Desktop Metal's bioprinting activities when the companies release their second-quarter results, which will likely be in early or mid August.

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Beth McKenna has no position in any of the stocks mentioned. The Motley Fool recommends 3D Systems. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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