Twist Bioscience: Fiscal 2Q20 Financial Results

Twist Bioscience Corporation reported financial results and business highlights for the second quarter of fiscal 2020, ended March 31, 2020.

“In the midst of the global pandemic, we introduced our methylation product for next-generation sequencing (NGS) and expanded our product line for synbio as planned and on schedule while we concurrently leveraged our capabilities to write DNA at scale to introduce two products to help fight COVID-19,” said Emily M. Leproust, Ph.D., CEO and co-founder. “We exceeded our revenue target for the quarter and orders continue to remain strong, even in these highly uncertain times.”

He continued: “In the face of a vastly changed business environment, our nimble business model and dedicated employees enable us to develop novel and valuable products for the greater good. We remain dedicated to our partnership with our customers to facilitate important research worldwide, not only against COVID-19 but for all global challenges including cancer, food insecurity and the needs of an aging population.”

2FQ20 financial results

• Total orders received were $24.6 million, compared to $16.7 million for 2FQ19.
• Total revenue was $19.3 million compared to $13.6 million for 2FQ19.
• Cost of revenue was $13.6 million compared to $11.8 million for 2FQ19.
• R&D expenses were $10.6 million compared to $8.9 million for 2FQ19.
• Selling, general and administrative expenses were $27.2 million compared to $19.1 million for 2FQ19.
• Net loss was $31.8 million, or $0.85 per share, compared to $25.9 million, or $0.93 per share, for 2FQ19.
• As of March 31, 2020, the company had $230.1 million in cash, cash equivalents and short term investments.

“In a challenging environment we posted a strong quarter with revenues of $19.3 million and a 29.7% positive gross margin,” commented Jim Thorburn, CFO. “With $230.1 million cash on our balance sheet and strong orders going into the current quarter, we are demonstrating the strength of our platform, proving our business model and we are responding to the disruption posed by COVID-19.”

Revenue

2FQ20 Highlights

• Shipped products to 1,163 customers, vs. about 650 in 1FQ19.
• Leveraged the Twist DNA synthesis platform to launch new products for SARS-CoV-2 testing. SARS-CoV-2 is the virus that causes COVID-19:
• Twist Synthetic SARS-CoV-2 RNA Control 1 and Control 2: Two fully synthetic SARS-CoV-2 RNA distinct reference sequences as positive controls for the development of both next-generation sequencing (NGS) and reverse transcription-polymerase chain reaction assays. These controls can be used to provide quality control for the development, verification and ongoing validation of diagnostic tests and are now included on the U.S. Food and Drug Administration website as reference materials for SARS-CoV-2.
• Twist SARS-CoV-2 Research Panel: A target enrichment panel for viral detection and characterization of SARS-CoV-2, to be used for environmental monitoring and surveillance testing while also providing insight into full sequence information to track viral evolution and strain origin.
• Launched enhanced Clonal Genes product line expanding preparation quantities, delivery formats, buffer options as well as tube and plate options so that customers can now access larger amounts of DNA in the format suitable for their specific research needs. This offering targets the pharmaceutical, biotechnology and industrial chemistry industries.
• Introduced the Twist Targeted Methylation Sequencing Solution to study methylation pattern changes in a wide range of research fields including cancer, epigenetics and non-invasive prenatal testing for early access customers.
• Discovered antibody candidates bind with high affinity to the receptor binding domain (RBD) on the S1 spike protein on the surface of SARS-CoV-2 viral molecules as well as separate antibody candidates that bind with high affinity to the human ACE2 cellular receptor, the binding site of SARS-CoV-2 in the human body.
• Announced a collaboration with Vanderbilt University Medical Center to supply synthetic genes and antibodies for the development of therapies for COVID-19. In addition, Twist Biopharma, a division of Twist Bioscience, is providing custom antibody drug discovery libraries and screening the libraries for potential antibody therapeutics that would treat patients with COVID-19.
• Completed an offering of approximately 5.34 million shares of its common stock at a price of $28.00 per share, as well as an at-the-market offering, in the aggregate raising approximately $190 million in net proceeds.

Based on the unprecedented and uncertain environment, the firm believes it is prudent to withdraw financial guidance for FY20.