In this segment of "Industry Focus" on Motley Fool Live, recorded on Dec. 15, Fool Analyst Yasser El-Shimy examines BICO Group (BICO) and its successful business model.
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Yasser El-Shimy: BICO Group is a company that enables researchers and scientists to model, build, test, analyze, and observe 3D printed cells, tissues, and organs. I know that's a mouthful. But basically, it's a company that allows any research lab in a university, or in a pharmaceutical company, or in a cosmetics company, to build human-like tissues and organs in a lab environment and then test them, analyze them, and run the entire workflow of research through that.
The company uses the razor blade business model. They sell bio-printers at a competitive price. They've actually revolutionized the field. Bio-printers used to cost as much as $250,000 plus when BICO Group formerly, the company is called Cellink, came to the market, they were like, no we're going to sell them at $5,000 instead of $250,000, but we're going to build the subscription-like business model where we're selling you bioinks.
The bioinks are the material, the compounds that are used to actually do the printing. Just think of your at-home printer, the inkjet printer, and how you need to replace your ink, that's pretty much the business model. I should say that the bioinks are consumables, as they call them, these are highly profitable, very high gross margins, and therefore that's a very interesting business model.
I would just conclude here by saying that the BICO Group, and as you can see on the name group, is a reference to the fact that they are an umbrella company. They have 13 subsidiary companies under them, they have been highly acquisitive in the past. Trying to think of them and their business model as a constellation software of bioconvergence.