Outlook is bright for Aussie 3D printing stocks – if they can win patents
Health & Biotech
Health & Biotech
The outlook for ASX-listed 3D printer makers is strong — as long as they can win patents, a top expert says.
Australian 3D printers — particularly those focused on industrial markets (also known as additive manufacturing) — have an advantage in the local price of materials with our natural resources in high supply.
But they must secure patents needed to operate 3D printing globally at a commercial level, says Dr Matthew Rimmer, a professor of intellectual property and innovation law at Queensland University of Technology.
Tech analyst IDC believes the total market for global spending on 3D printing (including hardware, materials, software, and services) will be nearly $US12 billion this year — an increase of 20 per cent over 2017.
By 2021, IDC expects worldwide spending to be nearly $US20 billion with an annual growth rate of 20.5 per cent.
Discrete manufacturing will be the biggest market, accounting for half of all 3D printing spending through to 2012. Healthcare providers will be the second largest industry with a spending total of nearly $US1.3 billion in 2018, followed by education ($US974 million) and consumer ($US831 million).
Resources and healthcare segments will grow the fastest, IDC says.
The ASX has a number of stocks in additive manufacturing, healthcare and consumer that stand to benefit. (See below).
Dr Rimmer sees industrial 3D printing and manufacturing as an area for huge potential, evidenced by a recent World Intellectual Property Organisation report indicating a surge in applications for 3D printing patents, particularly in Europe and Asia.
“Our governments both at State and federal levels have embraced the development of more efficient manufacturing processes, fuelled by the decline of the car manufacturing hubs in Victoria and South Australia in the past decade,” he says.
Our major research bellwether, the CSIRO, has set up a research and industry collaboration hub in Victoria specifically for metal additive manufacturing. The “Lab22” program allows businesses to simulate manufacturing and performance processes for their designs and develop prototypes with the support of experts.
However, Australian players needed to do more to secure intellectual property says Dr Rimmer, who has co-authored a forthcoming text on the IP and legal implications for 3D printing technology.
“We have been doing some great work here between Australian researchers, inventors and start-ups – in areas like metals, nanotechnology even copyright on feedstock.
“But with 80 per cent of the patents coming out of China, Germany, Japan and the US, it is a matter of a competition to be first to get rights granted in inventions.”
Who is in the 3D printing space?
The two best-known ASX-listed industrial 3D printer stocks are Titomic (ASX:TTT), which make parts for military, oil and gas companies; and Aurora Labs (ASX:A3D), which sell custom-made parts and its own machines.
Titomic, an early stage business, last year raised $6.5 million to build the world’s biggest and faster metal 3D printer in Melbourne.
Production trials are expected to begin by mid-year.
Aurora, which is focused on developing and selling a number of 3D printer models, reported $109,000 revenue for the December half and a loss of $3.4 million.
At the consumer level, Robo 3D (ASX:RBO) is increasing sales as it expands into the United States, South America, Europe, United Kingdom, the Middle East, and Australia.
Robo reported $3.1 million in sales revenue for the December half — though it lost $3.4 million, leaving $2.5 million in the bank.
The desktop models are now available through more than 20 resellers worldwide.
This month the company signed deals with US education market technology suppliers including major player Fischer Scientific Education (a division of biotech hardware developer Thermo Fischer Scientific), along with a supply and collaboration agreement with the Manchester Metropolitan University additive manufacturing centre in the UK.
Meanwhile, 3DDD (ASX:T3D) decided the Australian education market wasn’t for them. 3DDD has refocused its business from selling 3D printers and peripherals to the education market to providing consumer print services and licensed sporting figurines, announced earlier this year.
There are also a number of ASX-listed healthcare stocks with exposure to 3D printing.
One of the best known is Oventus (ASX:OVN) which has developed a 3D-printed titanium mandibular splint or mouthguard in collaboration with the CSIRO’s Lab22. The device is custom-made for each user in about four weeks from order to delivery.
Oventus operates in the United States, United Kingdom and Australia, and has signed a distribution deal with a Hong Kong group to push its sleep apnoea oral device into the lucrative Chinese market.
The company estimates the sleep apnoea market to be worth about $US5.6 billion by 2020 — and yet half of patients stop using their current treatments – the gas mask-like CPAP machine – after the first 12 months.
There are plenty of sleep aids out there trying to fill this gap, and while some are doing well, few are adequately addressing the physiological cause of sleep apnoea.