13 Jun 7 things You Should Know about Twist Bioscience Corporation!
Twist Biosciences, Inc. (NASDAQ: TWST) manufactures and sells synthetic DNA-based products by leveraging the Company’s DNA synthesis platform that helps write DNA on a silicon chip. The Company offers products such as synthetic genes, sample preparation tools, antibody libraries for drug discovery and development, and digital storage mediums that use DNA. Twist serves clients in medicine, agriculture, industrial chemicals, and data storage to provide sustainability, food security, health, precision medicine, and data storage solutions.
Twist Biosciences, Inc. (NASDAQ: TWST)
Market Cap: $1.62B; Current Share Price: 26.78 USD
Data by YCharts
Company
The Company’s DNA-based tools are paving the way for groundbreaking discoveries in various scientific disciplines, including cancer research, infectious diseases, drug discovery, human genetics, Agbio, and animal health. The Company’s product portfolio consists of genes, libraries, NGS, Oligo pools, Synthetic RNA and DNA standards, and antibody services. Twist primarily focuses on four main businesses: SynBio, NGS, BioPharma, and DNA Data Storage.
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Twist has developed a proprietary semiconductor-based synthetic DNA manufacturing process that enables the miniaturization of chemistry required for DNA synthesis using a silicon platform. The process has several advantages, such as considerable time and cost savings, access to quality tools, customizable gene synthesis, and improved accuracy.
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The Company has successfully industrialized the production of high-fidelity, high through-put cost-effective DNA that can be ordered online. The platform can achieve miniaturization of chemistry, reducing reaction volume by a factor of 1,000,000 and an increase in throughput factor by 1,000, resulting in the synthesis of 9,600 genes on a single silicon chip. This dramatically improves conventional synthesis methods that use a 96-well plate to produce a single gene. Moreover, each cluster is addressable and discrete, thereby avoiding any complications.
The platform also offers an intelligent algorithm that tests if a sequence can be synthesized or not in mere seconds, a real-time pricing option, stage-wise progress updates, and data protection.
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Launch of Revelar Biotherapeutics
In November 2021, Twist launched Revelar Biotherapeutics to develop and commercialize an antibody discovered by Twist Biopharma that can neutralize all known variants of concern of the SARS-CoV-2 virus in preclinical studies. The lead candidate RBT-0813 has demonstrated the potential to neutralize Omicron and Delta in live virus studies.
Furthermore, Revelar will be able to license additional antibodies for up to five targets over the next four years.
Twist is eligible to receive success-based milestone payments totaling over $100 million to achieve key development, regulatory and commercial milestones, besides royalties on any future net sales. The Company has committed to invest up to $10 million in seed funding based on the development of the antibody and additional licensing opportunities.
Revelar’s therapeutic areas of interest include oncology, autoimmune disorders, and infectious diseases. The Company’s first Twist-discovered antibody is expected to enter clinical trials in 2022.
Factory of the Future
The Company’s business was impacted by the intrusion of unwanted DNA sequences in their genes detected during quality control, necessitating it to shut down production for some time. This led to a delay in orders and nearly $1 million in financial loss.
Twist has expansion plans underway, with the Company building a 110,000 square-foot ‘Factory of the Future’ in Portland, Oregon, to increase its production from 65,000 genes per month to 90,000 genes per month. The facility will also help achieve a faster turnaround time for all products.
The Company has earmarked $75 million of capital expenditure for the fiscal year 2022 for the facility.
Diverse Customer Base
The Company served a diverse client base such as providing Synthetic DNA and genes for cell engineering to Ginkgo bioworks; Oligo pods for storage to Netflix and Unicef; RNS controls for COVID testing to the CDC; Liquid biopsy to GRAIL; NGS panels for population health to Regeneron and biopharma material for cancer research to Takeda and Boehringer Ingelheim.
The Company has 42 partners, 52 active programs, and 39 completed programs and has achieved 50 milestones/royalties. The disease indications and modalities are widespread and encompass Cancer, Neurology, Immuno-oncology, Infectious Disease, Canine / Feline and mAbs, Bispecific Antibodies, VHH, ADC, and Protein Engineering, respectively.
The Company has recently entered into an exclusive research agreement and license agreement with Astellas Pharma Inc to conduct research to identify and optimize Twist antagonist antibodies, which target an undisclosed checkpoint inhibitor pathway in the tumor microenvironment (TME). Under the agreement, Astella has the exclusive option to license any development candidates generated as part of the collaboration. At the same time, Twist will receive an upfront payment, plus an additional payment upon the exercise of the licensing option, milestone payments, and royalties.
Twist has also entered into a four-year supply agreement with Ginkgo Bioworks, which includes a minimum of $58 million in diverse product purchases.
Strategic Acquisition
In November 2021, the Company entered a definitive agreement to acquire Abveris, an in vivo antibody discovery services Company. Abeveris provides comprehensive antibody discovery and characterization services by leveraging its DiversimAb™ family of a hyperimmune mouse model, which can be combined with the Twist antibody optimization solution to create superior biologics for rapid clinical advancement. Twist paid $190 million, including $150 million to be paid at the closing of the transaction in the form of $40 million shares of Twist common stock and up to $10 million in cash.
The acquisition of Abveris gives Twist access to its DiversimAb™ hyperimmune mouse model family, seven antibodies in the clinic, and more than 90 customers.
Opportunity
Synthetic DNA is a combination of biology and engineering used for research in areas where using active DNA may not be possible or recommended. The advancements in DNA sequencing, genome editing, and the introduction of silicon chip technology have led to the development of a new generation of DNA synthesizers that can incorporate up to 10,000 independently controlled thermal pixels, which can be a potential reaction site for chemical or enzymatic DNA synthesis. In addition, the technology can improve reliability and is an improvement over conventional technologies by extending the sequence to thousands of nucleotides.
The prohibitive costs and specialized equipment required for this task have outsourced the work to third-party organizations. The new generation of DNA synthesizers has the potential to transform drug discovery and development across diverse therapeutic modalities. The application of DNA synthesis has improved the quality and scope of DNA synthesis in areas such as recombinant monoclonal antibodies, biomolecular therapeutics, and vaccines, among others.
According to a report by Insight Partners, the global synthetic biology market is expected to reach $37.85 Billion by 2028, growing at a CAGR of 20.0%, from $10.54 Billion in 2021.
Financials
As per the Company’s Q2,2022 financial results, the Company has reported $18.4 million in revenue and has orders worth $23.6 million from its Synthetic biology division; $23.1 million in revenue, and $23.6 million in orders from NGS, and $6.6 million in revenue and $7.8 million in orders from its Biopharma division. Twist signed nine new partnerships accounting for 56 discovery projects.
The Company is witnessing strong order growth as evidenced by the following figure:
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The revenue for Q2,2022 was $48.1 million with orders worth $55.0 million, gross margins were 38.3%, and cash and cash equivalents stood at $604 million. The Company’s revenue guidance for the entire year estimates the revenues to be $191 million to $199 million, an expected gross margin of 37%, and an expected CAPEX of $90 million to $100 million. The Company’s long-term goal is to achieve adjusted EBITDA breakeven at $300M annual revenue for the core business of synthetic biology and NGS.
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Key Takeaways
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References
https://www.genengnews.com/commentary/point-of-view/synthetic-dna-in-drug-discovery-and-development/
https://investors.twistbioscience.com/static-files/461b9168-c3ae-4b93-8354-75bf3f4f6b49
https://finance.yahoo.com/news/twist-bioscience-enters-research-exclusive-120000124.html
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