TWST - Earnings call transcript Q4 2020 | Twist Bioscience Corporation

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Operator

Welcome to Twist Bioscience's Fiscal 2020 Fourth Quarter and Full Year Financial Results Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. Instructions]. [Operator like Financial conference Officer. now Jim over turn Chief Thorburn, to would call the to I

Jim Thorburn

for call Thank morning results like of fourth business all today progress. to at Emily operator. www.twistbioscience.com. quarter which Emily With today's Leproust, will report will thank me with Bioscience's you, and CEO Emily Good financial review issue will Twist. milestones you is Dr. performance, for our financial operational morning, and a on Co-Founder full We website, joining available begin and our Twist results progress fiscal call did and review on on this our to recent everyone. year I'd direction. upcoming our Twist XXXX discuss conference and us financial our and is I of businesses.

We questions. up will call open then for the

being this website archived section the reminder, Investors call a available As one The be is be will audio in will for our portion of recorded. and week.

we presentation, statements of U.S. will forward-looking today's During meaning Laws. Federal within the Securities the make

or generally financial events relate future performance. or to future statements Forward-looking operating

Emily forth and from expectations that this turn update to results Dr. call as in forward-looking Officer of business regarding these matters the risks results I our with statements time, and and hereof, predict obligation the in filings over cause now we us set or will issued may the required Exchange COVID-XX resulting could Our those those this pandemic materially financial information at in projected. described periods The and earlier by are any available in economic the forward-looking to and we except of our date release These those Co-Founder, the on the to to based press as law. impact. impact Securities subject include of Leproust. to the fully full today extent as materialize, Executive differ With and actual that, more well Chief disclaim statements, any We are cannot, as presentation Commission. any and not beliefs actual uncertainties risks

Emily Leproust

and last from year XXXX year of guidance reported everyone. Jim, has our year, December for you, to been XXXX transformative XXXX. we In of Twist. good and provided early $XX results Thank for a million fiscal $XX million revenue fiscal Fiscal morning,

XXXX. revenue the and worked Diving to lines choppy Our of $XXX with was like we withdrew the million for closure setting growth year our deliver to to reported Twist.They for the COVID-XX our SARS-CoV-X and growing orders note of the of almost full has our $XX.X is our momentum, through XXXX that in fourth our of controls Synbio new commitment of like exceptional product function Synbio for million NGS our of driven pleased our given XXXX. RNA related incredibly delivered revenue customer synthetic great companies, customers. reported for catapulted $XX.X Gap] and from backdrop I’d fiscal growth extremely NGS stable guidance a uncertainty Illustrating the fact, of not is sites, evolving into we unlike virus. this revenues entire specifically products million products and in in for million the into the begin $XX.X stage to innovation division execution we quarter, that revenue for Against by revenue,it peer our products. sequence While $XX.X revenue the to year. to with our business, that we and for the circumstances the record our many contributed virusdecently strength panels address COVID to at report the pandemic, global pandemic some team and million with [Audio Biopharma from and the fiscal to record And the in our record while initial fiscal success where products our SARS-CoV-X to disruptive added I'd

the and focused antibodies introduced line and our the specific launched getting second into quarterand that year, we and access building we ramp needs to customers. capacity we early diligence the from on biotech to building customers our we're the call XXXX,now preps of initial biopharmaceutical received capability calendar the IgG expect on moving quarter, preparations and is traction. product infrastructure. in scale.DNA In are fourth as provide the orders to in of new and them, revenue out up the to our customers seeing addition internally, to while engage customer course Over through We budget,in on we DNA, initial time specific orders IgG we building e-commerce and at available

the a genes gene pharmacustomers, them. addition customers, products next In long of to own the to in fragments Often, of are for their expect market these customers need launch those the at buying few a for academic product we make time. instead will who tail be clonal-ready useful for This who genes month.

look areas XXXX, focus. we of ahead into As fiscal we two have

our capacity in differentiators our outside the will on Synbio and double we the capacity believe us to the differentiation, our our XXXX, additional segments add as address cannot of We and including anticipate turnaround facility time look second call to site We we this unlock of The will the Factory to current $XXX us of what the we products. million Factory evolution faster Future. platform, which to market of area. expect of today. the all our next Future and we scale the to to bring serve of will for revenue is This first is a provide new manufacturing launch allow to a evolving will business forward

have would to our orders around system shipment. frictionless be initial exceptional The from capabilities. business-to-business tracks we second e-commerce that focus Currently, an purchase

our expedite We placements are to certain will enable to now focused approved facilitate systems. an all be that on us business-to-business building to bundle within capabilities interactions

an California without generate within accounting PO to our a to order enable on before a A currently, from their specific PO needing BXB removing a required an barriers order. will these instance, system significant institutions, to website place integration placing their is order. customer customers For of

strive and for We report NGS. genomics am pleased first product power to offer Bio time revenue approximately launched the markets that exceptional health I our our in revenue. to targeted improve to to the sustainability. disrupt This to support NGS innovative year and is our to equal testament line XXXX, the to established an Moving is our for of customers fiscal and and platform products

as cycle, of our growth products this many the with clinical COVID-XX, customers as continued synthetic This and September to sell controls, tests now their can particularly expect are other long these have as using we be pathogens. trials. our in customers now and confident shipped with products diseases. for accounts. Twist stream, customers COVID-XX revenue our it up we are a opened we're product the line, growing is for are associated specific [XXX] do Twist product and We These clinic, of dependent the ramp initially sales timing term. for of diagnostic and controls new additional for the but of is in In into routinely subsequently panels detect develop panels XX. expect accurately it SARS-CoV-X The emergence and for used a working to customers new and product fiscal and line pursue familiar line to on near revenue the of success and the the to COVID-XX well we in opportunity respiratory XXXX, as remain their to lumpy launched we ensure These controls scale

our now have end, we be last continue To which COVID-XX have comprehensive infection earlier to week, we In we going we an product feedback great early navigating fight our viruses. ongoing X,XXX launched over while line, line as we viral panel, controls, a to year that product addition our this access critically believe customers, who important to-date. Continuing the will solution screens outbreaks. provided introduced disease methylation which expansion, forward to to

more in make these early products broadly to expect available XXXX. We

to cancer product mix, indexes. current technical intend multiplex support further to We customers our our we addition, and diagnostics developing better this dual offering. product universal believe add biopsies In our highly workflow will to a differentiating liquid extension indexing

focus and success in we making effort are very incredible had with large to fourth a who converting continue some customers, this customer microarray quarter. have We the technology, SNP currently using this in on switch

millions success winning accounts significant of opportunity is common our every in microarray approach. into with fiscal in new very continue SNP to moving see with expect we processed year. samples this AgBio, conversion where And to We a XXXX, pursue

While the larger. much the healthcare, cost in than overall volume percentile is smaller is

We sequencing OEM strategy to products approximately of NGS, different addition strategy. In in unique companies and and expansion the poised fiscal from And to allowed of and to other reach has now growth revenue companies. the have the it see their million We coming workflow XXXX, channel from we $X book $X our strive XX us NGS leverage brand name. to our own is Synbio selling under million in Synbio grow. and to this upstream

opportunities. market vertical our to Turning

business excel. biopharm to Our continues

and/or will of of with course including we we pipeline of pleased revenue-generating signed remains X and the our the of anticipated XXXX, have Over to fourth partnerships fiscal XX during milestones XXXX, opportunities sign royalties. quarter partnerships, I'm we to eight, signed that that were and them fiscal Four XX report robust.

We this our addition, year for data partners' this dependent And to information forward of in platform may and beginning given share look data associated in be all possible of now to our deliver it is in our on signed to clinics, partnerships, continues release nature are confidential approval. impress. the We but on public not our who cases. earlier this partners,

for models reported of biopharma nanobodiesprotectagainst addition, SARS-CoV-X. including The of that our data dose levels, single antibodies loss platform. X of all In at our milligram VHH lowest discovered X domain we showed proprietary we X per in the hamster preclinical weight dose kilogram data library using preclinical

and addition, antibody with Centerwasfound to In loss protect XX-milligram Vanderbilt Twist the Medical IgG weight against X collaboration kilogram. University discovered at through per third

of to of While our go us from potential build target model for helping we the in partners vertical. consolidation in biopharma antibodies effective wide ability may opportunities, a robust of for proof preclinical is data range antibody pipeline a to these out-license

generate have our partnerships, targets evolution is and license we monetize out biopharma development. can for revenue-generating our demonstrated own that We antibodies platform our and to against through them further then next

platform and over to be we can X will XX for where identified targets We and pursuing optimization differentiated development these disease targets biopharma our months. intend antibodies have advance out-licensing We generate discovery next through believe opportunities our of the antibodies. we these key platform,

willfacilitate Moving to of we reported that important believe data storage. Last miniaturization further our an quarter, technical silicon we technology. breakthrough

data step important make each designed from that parallel, is R&D other, XX to works, apart now, -- our silicon for DNA and a this roadmap Right works. are data storage even X-micron on in while we using demonstrate storage. incredible now microns called and it extra with accomplishment we and to an that good are an pitch. ensuring spaced continue data already we We volumes chip dimension DNA miniaturization. to producing In on an This received for synthetic progress very chip further have our the next capacity technology for devices, it

has miniaturization used ensuring chip achieve we to pitch in next With our XXX-nanometer current This technical is phase, same will second in our first and into it commercial follow work accomplishments, X final the to we full to commercialization. or fabricating less. while Once devices fabricate. an each to for up pitch. platform down scaling upon. scale iteration. target XXX-nanometer the development have The and with move the we on developing.And designing chip the for experience of have will same each the the prototype, taking focus design, chip we to Once parallel, we iteration, a on a to account micron working chip, pathway can R&D the our we of success we we capacity into silicon Ultimately, scaled process build plan experience with

our it is that opportunity roadmap. along in this new lead brings our an our to addition does and to We, for technical timing working In organizations for to technology consensus and important entry, roadmap I'd option. for this this when are in It DNA which founding advance be the the storage several call together At earlier turn long-term additional will Microsoft, is to and pleased storage, leaders drive we the announced alliance time, month, of build we the Illumina industry field to the joined the over financial market the progress, data the Jim Western group. new not for quarter. Digital the medium,priming field to members to awareness and note storage this charge. results What alliance does this around technologies change have internal with a like review of significant adoption widespread this and are

Jim Thorburn

you, Thank Okay. Emily.

we pandemic uncertain what thank As in outstanding like to year our delivered Emily to due disruptionand quarter progress. an strong have an of environment terrific would to another another Twisters for noted, continues be very all quarter the COVID and

Our with the strong a $XXX.X we was in orders is to record and year. have investments, a short-term year million, for we it for the and fiscal margin million results. important with operational exited and year sheet times, our approximately strong uncertain in $XX.X balance and achieved million, the XX.X% concluded $XXX these year the scaled believe to gross We and cash revenue

million the in for orders. booked revenue million.We $XX.X Our quarter $XX.X was

fourth the and also is biopharma quarter, X with doing had additional we revenue NGS and in agreements business really well orders. Our record an revenue-generating

it is X,XXX margin in from we base year. to our and positive fiscal grew in gross is quarter, the X,XXX fourth XX%, Our approximately the customer previous notable

you details Now let fourth on our for me share with more the orders quarter.

in were orders were fourth orders top the year, from placing $XX of XX NGS $XX million, million, accounts with NGS million to quarter. comparable approximately the orders fiscal million and and Our for approximately customers we $XX And XXX in XXXX. $XX.X our the NGS full that's received approximately orders

opportunity lot NGS of making our orders. customers in and larger FY a about we're million of $XX So the NGS progress total 'XX contribute

were noted and our Our that's tracking the our call, XXX up earnings we increase adopted, to larger quarter. from accounts are XXX and pipeline August XX from in continues we for an XX accounts, now and scale, previous opportunities on

Synbio. to turning Now

and the XX% Synbio year orders, X oligo total million. a and quarter and growth. approximately pools Synbio orders genes, And this orders year-over-year includes to from were million $XX.X brings libraries Our that's in $XX Ginkgo our for and

total And to please and million year, increased from 'XX, note genes million fiscal in Ginkgo $X Ginkgo for accounted million. the approximately 'XX $XX the orders XX% $XX orders million to year. approximately from grew of total the For orders about fiscal in $XX for

million, were X including Biopharma looking and Now the royalties. for $X.X orders with $X.X were Biopharma future additional and to XX Biopharma. we of upside for eight the to with X we're fiscal total strong million, those very bringing 'XX, milestones royalties. year orders in quarter revenue-generating and/or heading partnerships, into signed milestone and

a of to with million institution, academic $X.X up segment our in quarter orders, we next $X.X with $X of million one segment contributing be in large saw million our to over approximately terms In the of pick growth. order QX orders as couple billed from years, of compared X which will the

into for more orders million. quarter Ginkgo line group. each translate million recorded Our pharma. for bookings continued orders $X.X to Healthcare segment Please in NGS, in expanding the strong trend $XX.X were partnerships $X.X included note, strong million and due provide quarter,with bookings directly bookings large we biotech the revenue, progress which Biopharma not into but Industrial of provide to in a to

anticipate lumpy NGS be and also both quarter-to-quarter. to We Ginkgo orders

in quarter X from We another and orders revenue. for Twist. reported million to that's record $XX.X quarter moving of revenue Now

the 'XX $XX.X million. NGS million in revenue $XX for to fiscal 'XX. to million product the And in quarter for year grew Our $XX climbed from fiscal

SNF in to closely this expected, our with years, the another to $X was As NGS we and of for microarray transition approximately million FY X. X is a 'XX quarter revenue also and customer very order year confirmation anticipated note $X This we of have during the of from And original half QX. in was strong projections, come products, in number NGS. of the billed customer second worked booked is and to for a million

we’ve while than lumpy, seen less on the So surface. so

Synbio. on touching Now

the quarter from sequentially, down was for the projects. to $X.X sequentially that's the revenue $XX.X Ginkgo declined is quarter; in product million, million million which $XX to previous Synbio of mainly from and however, Our million $X.X timing due

declined earlier, Our due versus and in QX noted X million genes revenue revenue Ginkgo, summer due of $X.X mainly $X.X as million impact to the EMEA. was to that's quarter and

'XX, in approximately fiscal in for million year $X.X Gingko Synbio was $XX.X the now in million our XXXX. business previous at $XX versus the revenue approximately versus For our And FY of Gingko XX% 'XX, year. million for accounts million revenue FY with $XX fiscal

extremely which FY 'XX. KB that's business, million and million climbed X $XX.X up and from approximately compared to in XXX,XXX genes, shipped that's XX%. doing $X is of worth an FY X.X from increase FY well,we the XXX,XXX grew $XX.X 'XX, on And longer year. $XX genes the genes, genes in year, which Our approximately revenue in is our to in and FY million, ‘XX revenue it's 'XX last in million to and genes And highlighting that's

Our pandemic, billed nicely, and right April, in continue in we've year. $X to approximately million launched the we of the preps, the which middle for scale

Biopharma. Now

$X.X and Our project purification. webuild revenue was rapid antibody million high as includes the IgG which activities, for discovery a screening quarter panning, throughput

highlight very I excited making, progress. 'XX. the revenue 'XX. regional in the are $XX.X fiscal to accounts in $XX.X million $X.X We U.S. 'XX our growth will we're cover of fiscal million year our worldwide $XX.X grew year progress briefly revenue fiscal APAC $X.X million fiscal rose for EMEA and versus XX% terrific from million now another to fiscal Biopharma in and to the $X.X was million in million of for million revenue grew $XX.X business. in 'XX of versus 'XX, for EMEA, EMEA 'XX. in FY

million 'XX, doing XX% our $XX Healthcare of in for terms industrial 'XX to and in and fiscal approximately business. and In in in fiscal $XX fiscal in Academic Agricultural million $XX.X million 'XX $X.X by previous was industry, growth penetrating a compared year. now revenue pharma. versus is million accounts fiscal business fiscal million, 'XX. biotech our our how of revenue of million which was we're primarily the This compared of is Biopharma as due to continued revenue NGS, for the XX% with million success segment success $X.X was $XX.X $XX.X large is that's XXXX. fiscal in revenue largest in to

Now moving down the P&L.

for was quarter XX% Our And 'XX. in fiscal that's margin our XX.X% million, XX.X% from or year, gross of margin $XX.X revenue, for revenue. gross the was the and of up

increase and a organization. impact reflects our products NGS the noted leveraging we've of of fixed and costs before, scaling benefits our our As the our margin by of higher execution mix the terrific revenues, in

fourth Agilent revenue quarter $XXX million million. total expenses Our operating to in expenses, $XXX litigation to settlement brings excluding excluding approximately as $XX compared the operating cost to for increased And our 'XX. of fiscal million that approximately

of year-on-year FY to for terms to In million our expense $XX.X 'XX -- million in increased and million investment $X.X resources. also that's offset note comparison, XXX. for headcount $XX from that year increased in R&D grant. We increased our the to And due offset XXX IARPA includes FY from 'XX

primarily In from we terms million revenue, commercial increased in in to of with FY SG&A. from associated heads increased had SG&A, this in and to Also, marketing stock-based million $XX.X associated by and FY investments scaled 'XX, commissions comp FY $X that's 'XX with our organization from million increased sales and our organization. We've XXX higher XXX. $XXX.X in 'XX to

higher million, in writers. new with up comp million mainly X, net in and our from quarter that's X $XX.X was million, on associated quarter QX, the for in scaling Note quarter. And $X.X for the as the gross to margins that's $XX.X Our quarter $X.X $X.X in that's from brought million as was depreciation $X.X due loss the million previous revenue. million we was stock-based compared to QX loss down

for writers a for and million major uncertainty evolving, in $XX was short-term booked dynamic approximately equipment. for for lab which strong will approximately keep approximately net $XXX and there's approximately for X, including FY our deal 'XX. the primarily now expansion, the our that's for 'XX was although For includes beyond. compensation $XX.X and quarter for the great cover 'XX the for new Company stock-based FY is CapEx our and year. We're with million $X and depreciation. view of million year, be capacity million a fiscal loss pandemic I will investments the $XX Agilent, of challenges outlook in year, settlement, litigation And million was positioning growth also

$XX year. for includes range is to to $XXX Our million. 'XX $XXX revenue million for of $XX for $XX of revenue be million year. in guidance the the range range Ginkgo estimated million revenue to million. the the of $X This the million expected the $XX for estimated Non-Ginkgo, in be the Synbio year. to to $XX in revenue $XX million million in is range be of NGS to is to is And million Biopharma approximately

is XX%, and gross in quarter will for quarter scale XX% year guidance margin in from Our XX% X approximately the X. to

influenced preps. always, and significantly launch very impacted markets Our our We're margin, those expanding by new is in also targeting as capacity as utilization mix we products, faster by and and IgG such markets. large as growing DNA new scale

into streams. scales our have optimistic We're build revenue approximately includes be for 'XX. and in ahead We demonstrated Operating we're SG&A, ability up additional innovation invest for our platform investments and expenses, demonstrated growth our fiscal tap R&D the and moat. million our year. and And to stepping in which such, to $XXX continue as the opportunity about

fiscal up and $XX 'XX. plate stepping in to from investment in are million million our fiscal increasing approximately that's 'XX, in R&D to up and $XX We the

investment $XX about we're addition $XX increasing in million resources, the NGS Synbio our million fiscal In R&D and and storage to in our $X approximately to investment Biopharma increasing million. DNA storage 'XX. core 'XX Note investment DNA was to FY

our the new stock-based in Emily million, for to for million. of and expected and highlighted. CapEx comp is the to guidance is year million $XXX Our facility, of that $XX guidance $XX of net $XXX year million, range as $X loss includes expansion the includes million depreciation and be into this

our to $XX well projecting quarter we're investing year, December outlook range million. back dynamic summary, with the I'll the long-term And to in that, growing plate fiscal our and to turn quarter, be 'XX we stepping 'XX. December and large, will to a view call Emily. for we’re our million the revenue in success. through in the we're $XX markets As of and prudent a be be pursuing Fiscal And for up

Emily Leproust

Thank year we pandemic. challenges to light an into achieved our plants our the delivering exceptional expectations, amazing XXXX the beat bringing summary, you, In more and XXXX. importantly, of We customers pre-COVID-XX our revenue tested I throughout say our Jim. products, am quarter like and global service we that we pleased our those an extremely to to we we do context, resilience. as organization, we In always, tough We always the tools [indiscernible]. and risen And not, use are challenge. we have have, create a the do this. people,

XXXX fiscal DNA we diversification a solutions into IgG, fragment, the Factory our growth institutions, XXXX prepare Future expect for clonal-ready stream, and investment our growth capture Looking in of products, to and of pharma-focused and to allow strong and specific us continued for beyond. index significant multisite in Synbio, we revenue ramping preps BXB to including launchedour gene

sequencing SNP we and microarrays revenue in Twist conversion technical NGS, the to of customer continuous AgBioand strategy. addition OEM full plus For UMIs, growth an expect of ramping launch methylation solution, continued extended production, particularly of

will to our base sign pipeline antibodies, next we Biopharma, generate and technology months. our revenue, opportunities advance to partnerships internal we over XX of also and For out-licensing continue begin pursuing will the to expand

engineering storage, to continue will drive further roadmap DNA towards miniaturization. we For our data

new with adoption to In for we way execute agreements pave and this of will IARPA our medium. addition, market on the storage beginning

through know COVID-XX we that it we do XXXX will not head rapidly are we As around know do will on, escalating what navigate but it. the face cases world, bring, fiscal

impact team that, the incredible turn platform. the make broader driven Twisters let's an a questions. through power to of With for call of Operator? have We our

Operator

[Operator Instructions].

with first comes Our from Peterson JPMorgan. question Tycho

Tycho Peterson

I'll start guidance. the with

You be understand to high I want are coming below street the a end. at in conservative. bit you here the

see into there? can XX%. imply, Emily, contributions a just about at there midpoint, know biopharma I in on talking that actually decent you the milestones. million about talk guidance? does where be baked deceleration, maybe $X And you're then you Ginkgo, about conservatism So Could down upside

you just maybe the there would that can double-digits? dynamics what to talk be and decline driving So to

Emily Leproust

Jim I give details question. more are you, that Indeed, we you let prudent. on Thank Tycho. Yes. will

Jim Thorburn

X. Hi, Tycho, came strong -- it’s off a I mean, Yes, quarter Jim. we're very we

And As usual, that thoughtful. we want really prudent. to and guidance meaningful be is give

our we've terms in the adoption are NGS. We customers So customer. where converting up, build through the pilot on up and built Understand up particularly in fares. revenue by scale of

opportunity challenges face X-year potential mindful contract. that there. a year. contract. the about we're the years all over see next the business want be have lumpy, we to And as We're we we into So going Ginkgo, is of Ginkgo X.X

our very So We we’ve in pitched believe business see we conservatively. upside Synbio.

We continue see on in terms to large progress We IgG. upside of make pharma.

to sure preps. also the We on are and U.S. as here stand raging we scaling back, doing in is we we pandemic our the well for our which DNA the this other to 'XX grow to But going want make that calibrate invest us position for 'XX has FY beyond, get we're FY to and continued and in when future, strongly the side of focus pandemic.

Tycho Peterson

-- is you're just we're quickly, the the obviously XX% very so part just that Jim, because clear lumpiness in that's relation go growing saying of didn't Company but Ginkgo But the decline, guidance? Okay. to

Jim Thorburn

Yes, of part that's that just guidance. in lumpiness

come a reflection a on want in in to scaling. on is, which just But based forecast. measured XX%. contract, our is to X-year we're just in above reflection business,it’s not It's actually a The the have XX% We our seeing what minimum be conservatism. Ginkgo's is

Tycho Peterson

forward the antibodies, some chose about move of you're the Amgen on how Okay. these that. release And thinking know to then We've seen your in partnering. Emily, on talked like about not or that developing with the your curious Adaptive either deal, that about I'm just Amgen own peers with COVID opportunity. I you press

find the you pharma So couldn't view your antibodies? a of partner? And do the up to X what's internally COVID partner on potential if would all you potentially

Emily Leproust

Thank Great you. question.

full. of from in sure Biopharma one is it. light funnel some the marketing data including of there's to we if idea So been was and that That to out, the that beginning, generate use the that we opportunities said, approach. from has will COVID the leverage being we the some had pursue the And we -- in we've have could data making COVID useful, deals to the license of these

at started We everybody antibodies started the did early of start end we for in January. looking the late. COVID March when However,

target. COVID addition, not a In is hard

to our not so SARS-CoV-X target And which able benefit is of is platform, the applicable. against fully being find antibodies

in said, So have now really that model. we animal a data preclinical positive being

So that will those is us. be antibodies, one good. license of upside that And we've if said always we for an it

So of those ourselves, with for I and big up clinical to this groups, a to think drive antibodies we section probably a with go set see us in do open. number don't it we work are are not do but right?

possible that someone still However, it's one licensed out. of them

and happen, benefit us impact the Biopharma that to endeavors give help our However, those market been not us credibility even of already very very, antibodies the for commercial if positive. does has in and

Tycho Peterson

Okay. two an we hop talk data maybe milestones quick you maybe announcement, had separately, stockpiling? to then paying guys? should attention for then on that storage you Alumina you Can in just I Microsoft was the the And before And ones, are be for to XXXX off, quarter. one-timer that NGS there

Jim Thorburn

actually all now. ship in They years. Tycho, about with originally in using is million Yes. and anticipated on three $X and working QX for came $X million do $X one had one NGS, large million we've right stockpiling. to in over basically in product 'XX. lot, the they're the is that We $X The customer would not million back want FY that been

conversion. about So seeing in optimistic future us. the NGS SNP some for optimistic this orders coming we're very to more large ray very micro we're And

Emily Leproust

prompted. when market Again, don't have alliance that announcements yet to storage the already product of is idea on the details the will of the prepare the the on future that work available, alliance, help the is And the together. such market a work Alliance public alliance there then that for is the is the we data

So, activities of full going view. technical that our work in steam definitely And will there parallel, preparation market point is then ahead. be in

is should we may control. that would So in anticipate XXXX, not milestones update quarter, but to update are I that substantial full the every a be We over on that more be side. technical give able there

Operator

Cowen. Schenkel comes with Our from next question Doug

Your line open. is

Doug Schenkel

couple just questions. I call I I with of what questions want a would market end to outlook on, start guess,

questions. couple data financial one pharma, on is storage, want with one a then to So I on follow-up of and

it -- missed I in actually, have So did starting it. no, on pharma, catch I may

for into prepared So that you fact talked about remarks, eight of to seven XXXX, Biopharma you looking partners. total heading in the a were your

what you just that guidance of of that much is in product as mind, new collaboration? Essentially, of down pharma million, about the milestones, recent How With what's especially of some driving we importance wondering I notes. And million? took sales to ones? think that? what's the the that got $X XXXX number, more of that correctly partners I then components are XX, in I'm if revenue to my the the $X think

Emily Leproust

Yes. Doug. Thank you,

the XX at to guided get and XX year, the ended -- accumulating addition paid addition upfront we up stack in royalty those of of we that and we at us milestones it's royalties. partnerships, we in start important to eight to partnerships. that beginning so, X them, then where payment So partnerships -- had milestones we paid, all can we so And and

the of the that the And get so business. would payment to upfront as answer start upfront before is sure. And payment we though we will we an that refilled work, that work number, that done. other the book is bond gets we question, order revenue part is for your the even know announced the we when

payments work, be and revenue can we the as order last then upfront the year it revenue. as next in whole so, we do booked will And we year that the conduct

I'll to It's do times One fast, of able some that that in discovery. not takes do two being our attribute are key one drug say it is XX-day thing. even is drug addition though target. we to And things. a So, to

And we're of is converted payment the have the from full the And there would process, revenue. we point, when that so to -- that booking that to at in-house. running upfront get end to a we process

where more report reflects. revenue we the the may upfront sign as million this on to And $X or that say be order 'XX, we revenue. do in increase completely either quarter, in revenue that be capture some that that And not, the of So as 'XX. is it's thing then work then or I'd every that's partners to payment if in second that we and year, may going that addition

In value. -- of that milestones royalties, control up are majority addition, happens. we when we the we not the are believe Unfortunately, of economic be in will stacking on the which

some down to programs some to partner be partners may as Company our where for nothing may and in completely with so And be the for abandon changes. inside motivated decides to flow fast, assets grow instance, business very antibodies. even may it the reasons There do

we Twist more so means that into business those stop the one therefore, we sign can antibodies sooner royalty, And -- partner the sooner margin and the get partnerships we on crediting more the collecting clinic, revenues. more of with the that the margin

on However, guide going we're it. not to

upside. happens, that be when So that will

Doug Schenkel

eloquent probably booked No. have but on much you same $X It's what in in That's just way. helpful way, less things different probably thing seeing The in is essentially and already. the contracted saying based all locked a but million because your there work would or partners any and going added when understanding assumption to correctly. upside were is the certain surprised on if additional to milestones of accelerated extent you to be I'm or predicated done, be that that your of target, a that's

Emily Leproust

Yes.

Doug Schenkel

clarify less. just platform then and And my topic. of indicated the DNA storage, of in prepared on the achieved this on to you bit XXX-nanometer on this a couple your miniaturize to road milestones map may ignorance that pitch storage things, data significant you But to little remarks, silicon or technology a I down Okay. reveal want

on recall as you sizes. feature pitch You I heard stage a on that before, that about really as devices about with types recently nor X chip. devices focused between do synthesized a chip I X-micron device pitch the consistently fabricated reducing you Analyst this, silicon when believe talked you micron R&D you also using recent you pitch indicated XX-micron I've delineating and the talked Day new different don't DNA XXX-nanometer

question the what revenue? guess means just in this what significance described is is, of wondering actual prepared what I and to product and of So remarks you the lines your I'm in time terms

Emily Leproust

you I'm Yes. clarify. to question. happy thank for No, the

been So you're have that correct size. about talking future we

use the we today XX has current future of so size microns. a And platform

chip DNA, the the dimension -- is we writing writing to DNA the that So smaller. have to means cost where in the future silicon cost make order call we of on lower that that at size of And XX micron.

to and we future size And so had then micron XX go X said we that micron.

to to away, next X the the future far feature is that, addition away. but still reduce XX-micron are feature next need we In because is, know you size micron, if the XX-micron to from

is micron, So if pitch still you're XX the actually not lowering cost.

you to have So both. do

pitch, size reduce to you the to get and you the feature more have page sequences. have the of silicon, on so that DNA You reduce

was that so always our And intent.

but that not to even we're information road accomplishment anything the getting. changing always more great credibility about providing that was are are we and get map, benefit So, the the we

cost packing and each -- weathering we're to things both to need them other those of both So shrinking both, down. we're the because the closer of the you go size bank, have

on change bit information no there's more creating basically, to are but So a street. we side, our the

Doug Schenkel

a Okay. questions. And then more maybe focused couple financially just

year, this to, for guiding in its I'm right, that on I should the down the a kind his broke in period? how of I what just increase a in investment I and question XX% know for talked similar Jim the priority including measure I'm essentially investment. the You're if XXXX. remarks, we million wondering investment doing you this R&D time the factory investment areas in success think $XX in future. investment prepared about CapEx math, And the for front, over believe CapEx

expected targeting investment? just that could returns of and about you what If time line talk on the magnitude you're that

Jim Thorburn

and hot, from one came off orders on it the customer. include does of four I mean, Doug. Thanks, really, although million we NGS Yes. $X bookings were of quarter

We on NGS customer particularly strength side. base continue our opportunities of We're our of product seeing to the because there. expand, lots see

year $XX investment. in stepping the did Obviously, increasing 'XX. also more making data increase to point As was investment. Emily highlighted, both about million R&D storage NGS We're $XX this the roughly from view. as we data we investment, step million but the core progress right, about -- storage $XX of ecosystem longer technical seeing is We're to million. we It million for the are data roughly from back, term We're increasing. $X storage up a and Synbio

so -- FY the to In give we middle giving times raging, guidance get on with We pandemic believe our turnaround is 'XX. were us a really We're time. market really for up the for sometime the rapid positioning the I factory 'XX, prudent of in The I 'XX. Synbio we're this guidance to will also larger in mean, a going We're that's scale. another Bay guidance open into the the a way challenge we which core opportunity goal need come factory new We including number of believe revenue we've the the online is in from tapped to prep Area. of terms the We're we have IGG. business, of we a asked DNA continuity streams outside do year. platform, looking future, in there. investing seeing but out mean quarter

we So, million, we're position to really how looking to get $XXX Doug. ourselves at

Operator

next Baird. our Schulte And question comes with from Catherine

line Your is open.

Catherine Schulte

for a and on fiscal to your year finish thanks the Congrats great question.

duration in last for sense of a your will pandemic, that continue? terms you're contributions middle of core you're the your curious then terms in assumptions of guiding get impact how I your around COVID assuming long guess, are on And thinking and comment to what to COVID-related Jim, the about the product customers? the severity? in maybe, First, I'm just how

Jim Thorburn

a we So, have mean, a comments, I of couple ball. crystal

be 'XX I going to think FY dynamic. is

that else everybody a and crystal months, think All last COVID. has happening ball is adapted I company. we as six the during is with we've know a

in the continue adapt We environment. to terms of

build mean, is go we I base. year, to continue As forward next goal our our customer to

also and who 'XX strong year us. is 'XX. think but going all very we for distributed, going the 'XX to have a We and new are products, to we really And knows be launched looking when be vaccines are through

with of sort those February we in It COVID saw. I continuing we this March for cut for conservative? in decision-making micro be COVID positioning questions did lots coming We advantage more time time of stepped we're We're terms, in to What is So that's Should testing. what was our June got as cause shelter-in-place actually back our worked Should think aggressive. you our frame back investment, really was during do? salaries? we March, had compensation of interesting we up We our terms but We year. April, on we years. hit. the give probably May, should employee frame. employees when And

growing to at to the continue be wood in the market. innovation. The more year, behind one And terms positioned a scaling number market a innovate XX%, really in put is there's and of market. we're that We and large arrow XX%

Catherine Schulte

Great. will mentioned just you right. of And top what new that Synbio then you All priorities of factory on elaborate that be today. areas Can those Emily, the to different you allow can't will for And you the address the future factory? opportunities?

Emily Leproust

Yes, for thank the you question.

market So fits is not all. Synbio size as you know, one the

different They were And is custom in very we normalize. get can and in DNA platform different their can People can we tried, that make can so they in tubes. have We buffer. get in can very vectors, flexible, already DNA. a built it it

many So options. there's many,

and ultra segment And so genes the that means where that that factors segment. customer our for that can't XXX throughput, do very any winning is in we scale and or high a synthesis well very, fast There DNA really is really participate is more, is much, we segment.

And And we that's a some that speed now, XX important can see in below XX especially is growth, time. partners is that we to time, XX on market days poised for so like as that, right days on Anything to Biopharma. sell is we DNA itself.

for -- So us that we investment Synbio. believe in an be transformative could significant speed investment in in

Catherine Schulte

you're what Okay. terms in a of would internal you in of view Got able to then the outcome it. in terms fiscal antibodies, of candidates number pipeline successful of as your out-license advancing 'XX? And

Emily Leproust

Yes.

that's possible, the XXXX the as that What want do optimize to need at well. the year the we is which that partners really we to development from look can we out, something to convince preclinical do taking to antibodies. as of targets is we taking and deeper -- out, So are development that quickly antibody, bit do what is pursuing CROs do little found a

hot bit risk. COVID get the chosen then models. economics this stage, with taking like of partners believe light when a an first the then we to and ability antibodies because, targets. what at -- would are do better in our partnership seven And in upfront that animal case us be payment so a case, have sense And And which targets, do in give successful more partners we sign we should to preclinical we we find are functional then data so to

so that investment should some get also get and ROI we on our credit significant it And some the expect to brings. we

terms it timing takes months In XX in of we just take -- some time. because mentioned the remarks,

there in fruit focused but So longer-term quarter-on-quarter on we do management of But subsequent we as and today sure you and year, -- enjoy are years. view know, also we a are we team, to that medium execute not short-term we -- the as well. take really of the can those this we trees make things plant, do we

the So ultimately, seven the targets of for licensing the measure around will economics we success be that when get licensed. get those

Operator

Kumar next Evercore ISI. question with comes from Our Vijay

open. is line Your

Vijay Kumar

down? put even looking was look is slow Jim, low top larger of in this Is revenue I would year, pandemic XXs why growth context revenue grew a at maybe of XX% And at QX, well these for north growth kind three questions. us, for a base revenue onetime line guidance at of perhaps level, a some 'XX. One, XX%. or just the in you or maybe growth had the you high the regarding excluding guidance, when numbers

Jim Thorburn

thanks Vijay, the for question.

'XX. FY anticipated So $X at in We if 'XX, just we million would FY million look million did came originally in in the one $X have back, 'XX from of have FY stepping at 'XX. you customer and that $X been that end had

that could and mid were $X we million out to you're on of the forecasting, originally in what XXXs. you put our So you of top $XX and FY million, down take 'XX,

the aggressively note that And to NGS business. lumpy. the is business in point are is So scaling we

the in one a it's opportunities win And Company. it the upside. it's opportunities thrilled emerging and difficult $X large see of think timing And very the quarter. ship us. million book so also I been to far, we able project always to those be to is the are other ahead significant of for it We

about are NGS. large We for XXX tracking opportunities

our thoughtful you're numbers and and based based of of to to provide we've based Our opportunities communications bottoms, terms strategy. prudent in customers with be pandemic, the to that latest what's on have trying to our nicely. view try When we product latest want continue to. on middle adopted. We as to our upside give XX forecast a our in we scale the do a on and got

to to So the $XX if back guidance pandemic. it middle year, We was we had the we in last $XX go the the guidance of million. million withdrew

the and for guidance. got a million, platform to normalize you hit We've And end top we building the is build we so base. customer 'XX. we're our And scaling, fabulous our $X continue of belief that's for FY the

So I'm very sure.

Vijay Kumar

revenue when that think gross up, you Understood. the into ramping And normal you of could when XX base the have? target do think margins guys sort about you

Jim Thorburn

XX%. hit we we've for just with costs margin When financial additional the hit we it the year, the said business guidance gross up had we proven margin mean, Well, compensation. -- year. were model. the our interesting, I that for associated for about talking year, We we was gross we albeit shelter-in-place hit XX% essentially

product ramping are capacity. new We

upside XX% mix, new with And the gross the we should margins forward, out, is be can million, scale close XX% As certainly get and XX% ourselves depend capacity deliver to revenue. to margin to very factory it utilization. margin. range. able And continue that seeing at we're we we proven a gross view my $XXX as still for we go on gross It gross positioning strong we're We've margin may depends range. on

Vijay Kumar

the And heard think or mention And disease months. is expectation your areas to out-license next seven or antibody over one, targets one XX plan Emily, last Understood. the I you on going I after. you're maybe them

revenue manage what you to here upfront If terms be in the of them, did out-license payments? could seven of to all contribution

Emily Leproust

of to need don't We be out them successful. license seven to

are -- we all was craze targets the stated -- process remember we around XX-month hot period. the studied we Some what today? So say, those within least PDL-X The of what at the to of the are inhibitors.

a to PDL-X but late were where too PDL-Xs hot. is inviter, have it's now So point there a

So are we the of saying today. inhibitors by started what PDL-X

are So the those that have. targets we

license some probably contribution the of buck we're deal consider type could therefore, a be upfront we And the payment guidance. what outside upside with are somewhat will target. those and be uncertain, out, some to probably if royalties it's the But therefore, the and bio timing of substantial. them so able it our we in of participate majority that are can But upside. size form the a the the since as of milestones And and

whatever upside. we be get would So

shows However, at be it analysis that this our point, could significant.

Operator

comes question Souda Our with from next Leerink. SVB Puneet

Your line open. is

Puneet Souda

Emily, Hi, Yes. Jim.

I So the reason on the to NGS any first Is I SNP there just this in I'm the year, correct to question, given and lumpiness should with a of this that order. appreciate wanted just or clarify seasonal you're to not NGS next come this a that? the year? not is significant nature not that to wrong expecting mean, a moved it, continue in liquid tissue understand, I but customer, if DTC quarter, and is trying next but assume customer me on they

Jim Thorburn

been Don't is NGS share we about we've is people can't because, customer our see that to question, competitive talked the We seeing Puneet. with we've opportunities want validates give opportunities. share want emerging in -- to away working the large really don't space, this can that we to this situation are happening, sniper We good migration obviously, years. more and watching migration from that are this new us. specifics here of for So as All engagement. the three

for extremely uncertain product, had We anticipated -- QX at delivered and Our the They do customer out in project. at of was One that originally come engagement. coming this further be uncertain of to things. the and came a too That's year between and view with happy next we're $X order. of the is a looking is couple that is million is Timing in large million $X once. to same all the far end thing. could year, back it

customer, like not, by on order. situations forecast, change end situation. based forecast in market $X customer built another We have their We including and our million our

prudent NGS So terms we've been guidance of 'XX. in for

Puneet Souda

Okay.

ahead. go Sorry

to something had You add?

Jim Thorburn

Yes.

year, this the other is that. for was we million. to would point make originally out came guidance guidance think I our When $XX with I

and projecting NGS a So the large clearly, coming And happening. predict. just $XX the timing year. our is numbers difficult why to accounts is scaling million $XX of this of That's in around million, $XX transition we're little bit to million roughly the

Puneet Souda

obviously, appreciate give That's Wondering here in seeing Okay. metric of up some helpful. Got any the my of biopsy. and there, are question second if on the And them wondering well if is segment? and built segments that ramping market. agreement have you you the of as what's can sense it. number FY but or what the expectations something And liquid Grail, that? provide I a us and of into MRD you of within overall, -- could trials NGS across traction in you for sort other screening are And with on provide 'XX that and

Emily Leproust

you, Puneet. So no, thank

platform we So we the not market, of benefit particularly biopsy deeply effective the in in terms are the liquid in liquid -- biopsy. engaged is bring with only of that

very have you the know, in As biopsy, deep. you sequencer,

terms deeper the it frequency And the cost, in the sequence, so that uniformity you the more of that we uniformity important the is. of benefit bring, lowering

or are XXx analysis than XXx coverage. cancer coverage, XX,XXXx coverage and so even we And even XXXx at rare at more for at for competitive more disease than analysis

itself from liquid point the product adapted performance biopsy. is to the So particularly of view

for. adding Second, that solution we'll differentiated to we performance some to launch really at extent are state. for customers, access and We've benefit more broadly, look people the launched the that and

molecular liquid but to adding UMIs. go happy useful are are We into details, I'm for the biopsy. barcodes, that are especially those

product a biopsy to ours, good really of big, the and particularly the that's So the markets news. is clearly are is because so liquid because it adapted focus potential

themselves. really what can't describe However, our do, customers we it disclose they unless

the fortunate the were we IPO, preparing released. do as that SX corporate an so in mechanics to Grail are they got of And

one our again, than but even our can I commercial, power customers completed, well. while And be platform be those on disclose in are only We the of think And are are. are gets and when is sales of substantial. trials, to could then to it shows guide of we the that they what anticipation we products those platform, really bigger some going they volume addition, validation the the could see. potential clinical the It use. dependent

why the we confident not necessarily of in But control So are ramp. the that's timing. in we're

that we liquid so we have guide. prudent And what are we applicable therefore, which differentiated platform, quite again, is especially in believe a we biopsies. But for

Puneet Souda

trial, And currently into longer to a revenue years upfront that you're XX And early given I my so given and candidate much on When getting That's trial this here for about is at bit trial, that lead biopharma. deals the out appears a after in Okay. appreciate is even getting fair. longer-term that are outcomes the it. it takes the look into the question it here long-term term. appears to it milestones, -- that clinical of you X actually me last question. a for to more read the

Or longer even time? the is we into XXXX? given Do So Twist can see candidate clinical think lead happen in some -- with take that you going earliest mind, you Biopharma do think a trial? to getting when that's that in can

Emily Leproust

the an first time of -- partners. the because that's is very a one the first ready gate. we from Thank you. something is interested milestone are will This get in kind is getting And next of when antibody our IND we

so into One will Biopharma a developed gets big -- reasons. injected Twist And two cash. and antibody because then clinic very optimized is tested to in antibody to we're the is when be for collect point and that another collect And second human. for inflection an enters

we that point are to those motivated get very so reasons. for very, to And

it of quite is outside However, hands. our

within you years. get once have two so the you clinic an in typically, antibody, And can it

very And that quickly full the But be not you if that. is We of are announcement, after within partner can they two control. lot. but of so in that, go years deliver our again, we is charge. could not to And the go feel antibody, it timing the we can if influence in back something a

at However, them let's have one the focusing which as focusing the on you is going because not is been of to why partner. that go we get that's on, maximize -- we one We've speed as then many been partners clinic. can, into

Operator

further the Emily turn to I remarks. back like Leproust over would at time. showing And call no for this currently questions I'm closing to

Emily Leproust

continuously Thank and amazing move for the for We that Twist, uses you, by all inspired we science us you an joining have at the grid [Denise], team to to and thank today. an world. customers remain and Company make impact our forward

stay good safe, take mask. distanced of wear please care So yourself, a social and Thank you.

Operator

this and concludes conference participating. today's Ladies gentlemen, for call. Thank you

now may disconnect. You

Twist Bioscience (TWST) 23 Nov 202020 Q4 Earnings call transcript