Thread by @alessandro1887

- CELLINK THREAD -

I will start this thread by saying this is my first stock deep dive so any feedback and sharing is highly appreciated.

Let me introduce this company and tell you why it's a top 3 position for me.

CELLINK ($CLNK.B, @CELLINK3D) specialises in bioconvergence.

1) What is bioconvergence?

Bioconvergence combines the fields of software/engineering and biology. It isn't limited to specific combinations like bioinformatics or bioprinting but can be applied to an end-to-end approach and brings out the best of science and technology.

2) CELLINK's role in bioconvergence

CELLINK specialises in bioprinting and bioprocessing and is one of the world-leading bioconvergence companies. Rather than focussing on only bioprinters, CELLINK provides a combination of printer and bioink which is protected by many patents.

3) Importance of Bioprinting

Bioprinting is an extension of 3D printing and instead of printing plastic, it deposits layers of biomaterials to build structures like blood vessels or skin tissue. The ultimate goal is to print organs for humans which will disrupt modern medicine.

4) BIO X6 (extrusion-based)

The BIO X6 is one of the products and comes with a wireless tablet and easy-to-use software "DNA Studio" which lowers barriers to advanced bioprinting. CELLINK provides a one-stop shop for biomaterials which is very convenient for customers.

Key application areas for CELLINK's biomaterials are regenerative medicine, cancer research, drug delivery, material science, and lab-based food production. Customers aren't left alone with the products as well but are assisted by the scientists of CELLINK.

5) Management / CEO

Erik Gatenholm is the CEO & Co-Founder and owns about 20% of CELLINK (skin in the game). Erik has already collected many honors issued by Forbes and MIT and is leading CELLINK since 2016. He also has 13 years of entrepreneurial experience in biotechnology.

The board of directors provides a great combination of medical and economic knowledge which is very important for biotech companies. Every board member is highly experienced in either economics or medicine or even both.

6) Customers

The main customers are leading universities (Harvard, MIT, Stanford) and pharma giants like Johnson&Johnson. These customers use the printers and ink of CELLINK to do research and develop different products.

7) Moat

With the leading position and existing partnerships with all major universities and pharma companies, the moat exists as long as CELLINK continues to deliver world-class quality in its products. Once the customer uses CELLINK's printer it will also need to buy the ink.

8) M&A transactions

CELLINK is a real M&A expert and has multiple transactions every year. One aspect that is really outstanding is that they don't overpay on transactions but instead provide real shareholder value by paying a fair price and integrating the acquisition perfectly

9) Geographical strategy

North America is the most important market for CELLINK. The economy was back to strength more quickly in NA than in Europe which supported the importance of NA as the main market in 2020.

Once the economies in Europe are back to full strength CELLINK expects strong demand out of Europe as well. In the first Q of 2021 sales are already split up almost equally between Europa and NA.

10) Financials

Sales in Q1/2021 were up 241% yoy to 129MSEK (15MUSD) with organic growth of 62% and a gross margin of 77.3%.

CELLINK is not profitable and investing heavily in its growth. Everyone can decide for themselves whether the approach of placing growth above profitability is the right one. For me personally, this approach is just right.

Further reasons for the loss other than expenses for growth are seasonal weaknesses for industrial solutions and one-time transaction costs of two M&A transactions in the first quarter. The quarter ended with a historically large order backlog which is obviously great.

11) Risks

The field of bioprinting is still in a very early stage and investing in growth companies that aren't profitable yet in a sector that is still developing brings some risks. Investors need to decide if the opportunities outweigh the risks.

12) Summary

CELLINK is the leading bioconvergence company which might be the field with the biggest innovations of the next decade. The question is not if we will be able to print human organs to save lives but much rather when we will be able to do that.

Combine that with A+ Management and CEO, huge revenue growth and partnerships with all major universities and pharma giants, and great M&A transactions and there is the reason why $CLNK.B is my second biggest position.

There are still risks investing in an early-stage company in an early-stage industry but in my opinion, opportunities outweigh the risks massively.

I am looking forward to any discussions and feedback about this thread. Hopefully, you are a little more excited about the future of bioprinting and bioconvergence and how it can disrupt modern medicine than before reading this thread. Research based on info directly from CELLINK

Since it is my first deep dive I would love to get feedback and opinions on the structure of the thread, the usage of graphics, and so on.

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