DNAY - Earnings call transcript Q1 2022

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Operator

Good afternoon, ladies and gentlemen and welcome to the Quarter One 2022 Codex DNA Incorporated Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to your host, Richard Lepke, Director of Investor Relations.

Richard Lepke

Thank you, Vape. Good afternoon and thanks for joining us for Codex DNA’s first quarter 2022 earnings call. With me on the call today are Todd Nelson, our Chief Executive Officer and Jennifer McNealey, our Chief Financial Officer.

release website. now press section the quarter our of first is on available Investors Our

would to ir@codexdna.com. you please If like send distribution the an list, company’s e-mail to be added to

you or Before earnings I’d and our and materially results Such conference the during Harbor call only XX, those uncertainties and statement May be we will to filings that factors implied. from known the in statements These involve risks like inform differ this as statements XXXX. begin, forward-looking. on referenced Safe with in include our unknown the call we that in included contains to may is make of release SEC. expressed certain This broadcast those time-sensitive live information and actual cause accurate

changes DNA’s be the to like year-over-year Finally, on that, noted. Codex discuss turn otherwise any will Todd, a CEO. With to percentage unless basis, I’d call over we

Todd Nelson

and good everyone. Rich for you Thank Thanks, us today. afternoon joining

to results. results to talk pleased our like first highlights quarter are financial our I’d first commercial and for quarter XXXX. start, about discuss We of To the

We product are a off to portfolio. across our strong the start year to entire very

for strengthen to continue robust our demand business and We products. see our

of related consumable number placements our instruments, to of highest with our quarterly by XXX% period. the first quarter, from period biofoundry increased driven in to agreement was Pfizer. and kits, BioXp the was we by grew services, excluding partnership XX%. the prior growth For growth year the our part in BioXp Bio, compared revenue XXXX And and Eton contributions inorganic strong Revenue during revenue

broken down can a As three into be strategy distinct go-to-market reminder, categories. our

all including which portfolio kits and platforms catalog a globally and channels. both assembly automation Gibson direct are through of sales and synthetic distributed BioXp of consumable growing our products, genomes, sold First,

channels partnerships, build And which services technology now on value Eton creating with property user provide direct intellectual those leverages quarter same and services, will each Bioscience support which one. technical on in and all third, Second, customer substantial enabled giving and and to economics. end of parts needs solutions. and executed market to includes areas capabilities distributed in while to customers first biofoundry our BioXp touch these portfolio, We the I us access of our

strategies these growth for shareholders. our maximum expect to drive We to create sustainable and and long-term customers value our

headwinds is or automation ability Our our quarter accuracy the we took anticipated the automated headlined with push by XXXX out can Omicron than completed be days to previously BioXp affected week in what customers’ rapid to and in leading platforms This meet platform drug shipments instruments. that done activities onsite as This of resulted earnings fewer BioXp the we with just quality a fourth and a scale, XXXX, XXXX. our in lead BioXp ship, vast Certain last discussed months for our button experienced and now which can our had productivity related DNA closed previously and the in system, took variant. install call, XXXX are speed, using we place, the to of in In now just synthesis so Industry enhanced be can improvements. mRNA. combined the biopsy to discovery system we fully emergence of certain hours.

commercial excellent we instruments instruments were period shipments had which commercial the number delayed record contributed from quarter COVID-related prior the we of we while normalize in able to to Therefore, quarter, first this largest Overall, of subsided placed, execution. the as some the had in our be delivered. to of second expect the However, a of disruption an quarter. quarter

BioXp the recognize Our benefits continue of to platforms. the customers

we as our kits a related an mRNA of outstanding demand BioXp are nearly This launched gene will Over XXXX anticipate which base oligosynthesis consumable consistent of still note, the that products our expand and we capabilities the time, intend We of internal base As prior will fragments, in products, the our sustainable instrument our us believe we remains margins profitability quarter we stages model. recently to and are in significantly and with kit driven our in offering. in to fuel instruments XXXX reminder, This provide Within instruments cloning, with up growth meet to XXX On solid early our consumable needs a business strong. and we year additional kits a off adoption of installed XXXX. future. a of ended compared for by gross period. portfolio razor-razorblade experienced was BioXp our the path to the and to improve launch XXXX. ramp profitable product customers, install to will start a

demand and libraries growth for and experienced Moving continue orders driven customer revenue genome rate. this Codex year-over-year robust on, growth variant our line grow demand we in biofoundry area in to This was DNA services to with strong organic by expect rapidly. our

best-in-class As excellent provide platforms quick a services quality. biofoundry custom leverages customers automation organization with reminder, solutions, BioXp our our to and turnaround

sequencing customer higher-than-expected of demand Bio contributed into broader customer the the of and our resulting and very our ultimately in of business. enabled catalyst to team the services funnel services our internal Codex more quarter base strong which sales. our performed team’s in provide biofoundry was BioXp million services to a We scientific addition build a us Within in performance. solutions reach, Eton $X.X solidly for product product ahead helps relationships Therefore, offers forecast. demonstrate approximately customer our customer drives revenue, expertise, and growth, the to strong DNA quarter, instrumentation services, In to a for which being key expand saw value and

of material our reminder, production which a As into and supply end quarter fourth capacity the our within to efforts the Pfizer internal R&D product legacy in operations Starting believe raw we of in should the of to a margins ramp have resources begin of raw we we believe a oligos, significant Eton’s combined service in XXXX, oligo Eton’s significant part amount Eton own of steadily invest can And grow up manufacturing the towards provide scaling allocated this business will the near-term collaboration. the of biofoundry several year, accretion the support complete Toward lines gross in material and to we XXXX. integration costs up intend as Eton’s into to as we reduce services. production production organization.

Moving a that on start to collaboration in are partnerships, off with to am report agreement very pleased now to we Pfizer. strong our I

SOLA at been has development technology technical from While progress this our we perspective outstanding. into can’t the a point, specifics to get our related EDS

successfully very we developing target have encouraged of will so of key we far. provide very new days, genes we are using interest rapid data further updates progress EDS as we the genes. And It’s we are workflow seeing example, synthesized objectives. for toward have our and by the target but early synthesis For protocols results high-fidelity SOLA made progress and joint

solutions of and As large-scale intellectual property our the call, customers of we leadership cultivate portfolio we we protein This and to time. partners and Vmax our and differentiated discussed development DNA. for automation our synthesis continue value-added prior our and as cloning specifically, aim partnerships partnerships scale-up More DNA, all to existing leverage efficient additional both and over potential visit BioXp can technology on includes our pursue mRNA, new technologies. intend platform categories, with teams agreements such that establish and and with proprietary for to

showcased the based in at We the to that approaches used that programs recently our webinar on from within with due turn buildability, and to advantages oligos made-to-stock scalability our Biology protein I EDS its to in blocks. amplification fragments in the updates. and cost. investor first R&D DNA We platform building of of mRNA, want ligation approach Built is library longer discuss SOLA to at this universal ideal call Before SynBioBeta’s the solution believe on synthesis organizational synthesis I systems enzymatic and SOLA fidelity, Global automated technology touch our DNA, build and for our BioXp benchtop over to and March. Jennifer Conference short financials, DNA the a is benchtop in R&D is progress innovative proprietary

We products more in quality expect approaches. the enzymatic DNA synthesis using our BioXp higher approach system effective other and and building with oligos SOLA to compared cost will result

During the SOLA programs. development our we advance first quarter,

continue oligos to reliably DNA XX XXX high benchtop. generate of We fidelity the base to pairs at

development capacity the ever an technology our fidelity belief customers. segments segments DNA the oligos efficiently SOLA-generated DNA of for full-length project, approximately for protein assembled BioXp conference, genes were global This a solution leading further approach bill is of company’s is XXXX KB higher longer making As spike high designed have an longest Xx achievement to approximately it the is in enzymatic length this internal and synthesis biology X.X system, validates assembled technology. we enzymatically. BioXp the current that SARS-CoV-X showcased building into also part which customer a and potential pharma. At with throughput XXXX The to using XXXX biotech ideal within as chain

to call across enable to And our services, positions for products, quarter with We hired And are finally, launch in XXXX. we financials. will on over hires full our future report I’ll Jennifer pass track the to quarter key a technology the to XXXX BioXp us first fourth is and to of the demand commercial new and the scale pleased year, the recruited that for of These that, meet partnerships. organization. review anticipated during this

Jennifer McNealey

the compared and same investments across review Gross noting of XXX% group which This was increases services, prior and to loss insurance capitalized for margin expansion biofoundry increased of remarks about the facility release. the XX.X% XXs, total Royalties by leadership first as and headcount million first the Thank to higher professional my sales same is for R&D material businesses, cost. our quarter, our year. Net per compared margins. It period. quarter you, March the $X.X by our for period to results. financial from compared $X.XX Pfizer quarter, was $X.XX relates for the was period $XX.X XXXX, by G&A back driven marketing Pfizer staff. And included worth quarter first same the our revenue, the to in and associated compared support the everyone. hiring first well services, In significantly of Operating $X.X million reagents over other was in million logistics the good Net I for in contribution was future shipping of primarily the afternoon, revenue, in improved improved corresponding was year. and Eton to support the was period to will year for quarter $XX.X with first from to the driven milestone also payment and current increased prior in compared today, XXXX. and Todd. call of organization. and departmental same growth fourth The and is our net turn short-term agreement. increase expense share million. financial in the million that new year. included growth. BioXp revenue biofoundry the I million product that, as of are for due raw and to the year. the will costs quarter Todd, revenue amortization Other sequentially and $X.X period personal $X.X today’s was a the costs, results efforts, were The DNA which and product gross million with we R&D reflecting Codex $XX.X increased material in for investing contributions now expenses, Revenue expenses loss professional Detailed strong cash prior press primarily with were XX% to quarter The was briefly services, for efforts, loss increase prior increased expense of personnel and in prior driven commercial to collaboration decrease a development related sales the and margin for $X.X kits, million

Todd Nelson

Thanks, Jennifer.

quarter our me within performance that call Before with continued the execution the are first our saying for the encouraged of strong questions, are through by XXXX. by we And we let in R&D opening conclude pipeline. commercial pleased progress

new future investing launching market We and are commercial partnerships, existing margins, success. improving furthering profit growing focused executing on and new goals, against our for near-term share, products,

you. in and invest technology that, the growth. the operator processes drive Thank open for sustainable with And to call continue ask to I’ll long-term questions. to We talent

Operator

Brandon sir. question from you, Thank from comes of [Operator Your first Couillard Jefferies. line Instructions] the

Your line is open.

Brandon Couillard

how channels? the any thanks. share Hi, are U.S. total placed be can gross of record Todd, or afternoon. XQ many quantify at terms versus customers? the of from the and existing willing Good color and mostly in you’re new BioXP installs Is number in o-U.S. came there first of you to placements orders in terms able just these being delayed quarter, to

Todd Nelson

question. all regions, America. additional saw Thanks really is the I add Yes. strong we and America color Hi, North Brandon. and for across in I growth the but that guess predominantly North Channel would

earlier party, from the quarter, the question say, over couple overall the kind the changed. color On the And the the of percentage few. and a I’d fourth demographics of a small a a to the so hasn’t mix about installs came just, of quarter, customers really on

seeing customers. new still adoption mostly We’re by

a in order a occasion customers, seeing are We few, but new to couple customers systems, primarily, just over. existing went of couple a

into augmented sliding quarter slightly the issues the that the and quarter a quarter. a had in strong we due fourth COVID It of the channels saw in really to in first couple first of itself instruments we by was the So, on quarter.

strong really into couple but and of growing makes And out mostly American customers as operations ago. channel quarter sense North commercial a strong America really that and quarters invested well. North So, sure, for new lot because as a stood we performance,

So some successful a to that’s been fruit has starting place for I and think, us. bear really,

Brandon Couillard

launch Got started for build that detailing order sort have like begun BioXp Have expected And ASP the commercial that. terms in for you you And XXXX it. of for the instrument? to line, that time looks of yet? system solidified funnel you’ve an

Todd Nelson

again, question. So good

fourth we’re the done team, check going to feel have to with we quarter. be going testing. We’re launch nearly to with beta think on track. track comfortable I seems the or so well, on Everything that for in we’re I’d remain

those capabilities. that. will soon, but after have online will We’re, studies with of now. kits and course, right cloning doing Other we and conclude pricing we pricing launching with And be should come fragment

have one KB to of with that will gene genes the subsequent It So XX X.X throughput the XXXX. launch with synthesis clone the on. the quarter is able which up fragment be on of will fourth any in on launch to and a consistent and later will we available kits we four-vectors, one capabilities then kits into Xx

but on track. So working on pricing, everything’s

Brandon Couillard

guidance you to for Okay. didn’t I Then, hear year. Jennifer, speak the

prior the guidance you we So installation call. on and XQ assume about that reaffirming you’re revenue talked the that

Jennifer McNealey

the for Thanks Yes. question.

call guidance. to on annual it we did So give QX than practice our guidance is and guidance rather annual the give quarterly our

Brandon Couillard

guidance, that you’re intact? full like, understand, I Sure. XQ you talked we outlook should assume not about of that given is kind year necessarily but before still

Jennifer McNealey

We have not provided a change to that.

yes. Although, it kept this time,

Richard Lepke

this to Clearly, to start Richard we’re in. Yes, here is year. outstanding the off

always So, our still, our meet to is, will our we practice but, annual or and typically guidance, guidance. goal aim is exceed provide our

quarter far but one we’re here, get that good year feeling the like only the too ourselves We’re of don’t year. through about ahead

Brandon Couillard

Got it.

Okay, thank you.

Todd Nelson

you. Thank

Operator

from the from comes of KeyBanc. question Paul next Knight Your line

Your line is open.

Paul Knight

you targeting, of producing, Hi. talk sequence that the X.X what’s ultimately how sequence the level you’re performance? that Todd, we you are on if data talk, the sequence kb size – much want about that could could is consistency you

Todd Nelson

the Yes. Thanks Hi for Paul. question.

now, let data We I which this audience – apologize, a at in only twice his me and is to not question standing conference answer solar Dan’s great. presented stead. the presented regarding SynBioBeta here, go room we the So ahead but

X.X kb longest we’ve synthesized using So DNA that’s it’s gene And synthesis. the ever the best synthesized. of enzymatic is our the to longest been knowledge ever gene

entire has so base entire or history a enzymatically company of genomes, the Now, we genomes as of can assemble building pairs. millions

DNA, we’re it process. that of we the longest piece did solar able those So one the to from using all we’ve to contiguous when able synthesize. been to that based comes of build that’s And

comfortable very So about we feel that.

to a about at. DNA and other technologies, experiencing enzymatic are using our we’re about where in fidelity process good synthesis feel XX-fold relative improvement We

those disease your And, view and longer sequences The second by personalized kb our of builds demand driven the sweet or of to are segments is the being or is, as part length. it’s longer genes migrating where’s for infectious multiple spot? the genes question really, like example, of result flu complex an that’s market in more in just a a the as spike Whether medicine, vaccine development. protein couple

using capabilities. require So build enzymatic benchtop going at the to the necessity to build long synthesis is genes

that squarely think I amount. we’re within targeted

and be viral certainly you comfortable that, get And for that’ll than so with smaller antigens. any we’re as human into protein that very

up in forward. multiple path We’re a so got there we’ve think kb the length, in we

Paul Knight

And had you mentioned QX, were to headcount, you increase even where going with I are in you think progress? that

Todd Nelson

number With we the of added? headcount

Jennifer McNealey

U.S. have hires we employees XXX about So, QX made in number a dozen key and a approximately currently of internationally. we’ve and

Paul Knight

Okay. And, Pfizer QX, you began is the right? in that milestone

Jennifer McNealey

that first recognizing the of was quarter That Yes. milestone. Yes. full

Todd Nelson

full It was a quarter.

Sorry, Jennifer.

Jennifer McNealey

full quarter the recognizing of first that that. was Yes,

Paul Knight

you. thank Okay,

Todd Nelson

Todd. Thanks,

Operator

comes question next from the from Mah Steven Your of Cowen. line

Your open. is line

Steven Mah

the for thanks taking Hi, And on quarter. the congrats questions.

Todd Nelson

Hi, Steven.

Steven Mah

just Pfizer the upfront timing payment, of on give Paul’s to of a rest of of can payments? maybe question, the the follow-up So sense cadence the upfront you on us the

Jennifer McNealey

Sure.

So milestones we is upfront recognized are being received to on a line basis totaling And for up near-term payment. and we in eligible million also future X-year to straight January million. period. $XX X an over, $X That payment

Steven Mah

on, and completed? Based recognized be Okay. as those will

Jennifer McNealey

Correct.

Steven Mah

it. Got Okay.

Okay. the, Looks issues good the supply lingering about launch feeling wanted scheduled just to or I XXXX any but could launch? QX, talk guys pretty Thanks are that you potentially that? for are .And timing, about impact then, like chain there that for that’s

Todd Nelson

chain requirements. about good now, very and we secured the feel We timing launch have supply

we’ve of pilot our of runs. in procured So, MRX all parts the in the for bill materials

materials best on goods. we our the forecast, finished our based to and knowledge, So have sufficient of will

Steven Mah

about the of raw for given gross can internal But potential give a Okay, Eton us supply oligo costs impacting, impact? the perfect. materials. you the sense And guys gross XXXX, then, lower you talked in margin of margins

Todd Nelson

it part and first the we Jennifer can of that over take I’ll and Todd, to is hand this follow-up. So question

not DMT chemistry synthesis then. level, high will year, we XXXX, so our launching on to And ramp first gross internal launch the be margin DMT course very will intend plan that the So creating capabilities. This we synthesis, late in at that enzymatic, started the a is of throughout up.

and part I’ll So to the to it over Jen the kind Rich of second question. of hand answer

Richard Lepke

Rich. good this a question. It’s Yes, is

here, this go If provided haven’t kit, consumables We play about the commercial every At haven’t guidance think you point we into where there. oligos all if built they the margin year. our products. next really but, up into budget,

recurring makes sense, revenue raw a a costs, strategy. our consumable our So, material helps lower with important those You more the got key strategy create to stream of that part and to and kits, profitable it’s right? much

no, thought of throughout that, the it’ll much and we in do I more So impact ramp expect up an XXXX, year.

Steven Mah

Great, Okay. strength of becoming given do to business, the from an thanks. last services And over question, customer ever a the get services customers instrument buyer? you switching

Todd Nelson

Yes, time. all the that happens

As to benchtop worldwide a we’re control new ability market IP and gives matter of approach, new first a with workflow, at to the have first we’re and a and and researchers to fact, a with which and the that. so technology, scientists to whatnot, new market their instrument, better

Sometimes a with customers to the want principle top. do on proof of

to So that they works instrument for the make will in their and workflow. sure want come

oftentimes happens that the to as all the customers instrument, convert and So, a we way to that use time.

have quite So whether transition it’s a them or a because proposition product in There our SQLs your us of to that great MQLs to of ended are in, and again, instrument tool bring format. are customers, leads to question time with a for an been some over they program. services up and purchasing or us in the eventually value happy are that with change the services period then for

do services, you certainly do through the on healthy products, our we a to offer also that services transition see we we and can’t transition, from which things BioXp. So, see

segment do address certainly So the to over and converting market, answer products. we see trying customers we are largest but to of

Steven Mah

Thanks a great. lot. Okay,

Todd Nelson

Thank you.

Operator

to Lepke the showing this like turn further I’m Richard remarks. to closing at time. I’d for conference the questions back no

Richard Lepke

With Vape. conclude all now we’d you Operator, to the that, you, call. for thank Thank attending. like will we

Todd Nelson

you. Thank

Operator

Ladies Have and your today’s conference. this participation. gentlemen, day. you concludes Thank wonderful for a

all disconnect. may You

Telesis Bio (TBIO) 15 May 222022 Q1 Earnings call transcript