Twist Bioscience Corporation

Welcome to TWIS Biosciences Fiscal 2021 Third Quarter Financial Results Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question at that time, please press star then 1 on your touchtone telephone. As a reminder, today's conference call is being recorded. I will now turn the conference over to Angela Bidding, SVP of Corporate Affairs.

Thank you, Valerie. Good morning, everyone. I would like to thank all of you for joining us today for Twist Bioscience's conference call to review our fiscal 2021 third quarter financial results and business progress. We did issue our financial results release this morning, which is available at our website at www.twistbioscience.com. With me on today's call are Dr. Emily LaPruce, CEO and co-founder of Twist, and Jim Thorburn, CFO of Twist. Emily will begin with a review of our recent progress on TWIS businesses, Jim will report on our financial and operational performance, and Emily will come back to discuss our upcoming milestones and direction. We'll then open a call for questions. As a reminder, this call is being recorded. The audio portion will be archived in the investor section of our website and will be available for two weeks. During today's presentation, we will be making forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements generally relate to future events or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize, and actual results in financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include those set forth in our press release we issued earlier today, as well as those more fully described in our financials and our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on information available to us as of the date hereof, and we cannot at this time predict the full extent of the impact of the COVID-19 pandemic and any resulting business or economic impact. We disclaim any obligation to update any forward-looking statements except as required by law. With that, I'll now turn the call over to Chief Executive Officer and Co-Founder, Emily Leproust.

Thank you, Angela, and good morning, everyone. We continued our positive momentum into the third quarter of fiscal 2021, reporting increased revenue across our businesses and solid orders moving into our final quarter of the year. We remain focused on expanding our customer base and driving increased revenue day by day across these businesses while advancing our DNA data storage commercialization plans. We reported record revenue of $35 million for the quarter, an increase of 65% year-over-year. For the second quarter in a row, we have no single customer accounting for a significant percentage of our revenue. This again indicates broad and diversified strength across our businesses. And we reported $39.1 million in orders. This is an increase of 58% over the third quarter of fiscal 2020, a strong signal for the remainder of fiscal 2021, particularly as of sorry, fiscal fourth quarter covers the seven months which are slower for European customers. Zooming out a bit to put into context both our current results and our future opportunities, we continue to believe in the promise of synthetic biology. The ecosystem of companies working on diverse applications of SynBio provides not only validation of the industry today, but also offers incredible opportunity for the future. There will be setbacks within the industry, and not every application of Symbio will work or resonate with customers. However, wherever the science and the commercial applications go, Twist provides a sensitive DNA for the research, discovery, and development, as well as even production. Essentially, we provide the picks and shovels for our customers who are bidding for gold. Whether or not they find gold, we sell the tools that enable their success. There will always be a market for the picks and shovels. Specifically for healthcare, we feel rich opportunities. At every stage of the healthcare system, from diagnosis to treatment to surveillance and prevention, SynBio has a role to play. New tests are available for a wide range of inherited diseases. We can use gene drives to eliminate mosquito-borne illnesses like malaria and dengue, and gene editing can be used to treat specific diseases. Comprehensively, We can use sensitive DNA to read a particular cancer mutation and then write DNA to deliver a personalized treatment. And this is just the tip of the iceberg of what is possible by combining sensitive biology with technology to improve healthcare. In addition to healthcare, we see our growing customer base pursuing unique applications in a wide variety of industries, including materials, chemicals, food, farming, and more. With a vision eight years ago when we funded the company that Synthetic DNA will change the world, drive new industries, and disrupt the existing market. We are delivering on the promise by building a robust and dynamic business with solid revenue growth quarter over quarter. Now, to drive into our results for the third quarter, starting within Bayou, we reported record revenue of $14.3 million with orders coming in at $15.7 million. We shipped 107,000 genes in a quarter as we continue to expand our customer base. We are actively preparing for the opening of our Factory of the Future with early production expected in mid-Canada 2022. As the Factory of the Future comes online next year, we believe it will allow us to tap into new customers who need their synthetic DNA products very quickly. An important next avenue to convert DNA makers into DNA buyers. Turning to genomics and targeted NGS, we reported $18.7 million in revenue. Orders were $18.6 million for the quarter. We closed our acquisition of iGenomics, bringing multiplex library preparation tools for NGX workflow into our folder. We believe this acquisition will accelerate conversion from SNP Macquarie to Twist plus sequencing. We're working to Twistify the product and expect to relaunch it before the end of the calendar year. In addition, we launched the SNP Diversity Panel, the Regeneron-designed product that leverages TWIS-based in-class DNA synthesis platform to cover over a million SNPs. It can be used alone or to augment our larger exam panel. This is an important panel for TWIS as it provides researchers an ethnicity-neutral goal standard rather than a typical bias of 80% Western European coverage. We have taken multiple steps to mitigate the supply chain risk we discussed last quarter, including the introduction of our enzymatic fermentation 2.0 kit. This is an all-in-one solution designed to maximize accuracy and efficiency in laboratory construction and amplification, and a nice addition to our portfolio. We launched four new positive synthetic RNA controls for new variants of COVID, including Delta and Kappa. It is important to continuously evolve this product line in tandem with new strains. We see that our sales for controls are relatively constant over time, though sales of the controls introduced early in the pandemic have been replaced by the new controls for the latest variants. Importantly, the emerging variants and escalating cases worldwide remind us that COVID remains a public health crisis. This is likely to be the case for quite some time. we will need to learn to live with COVID, which requires both diagnostic tools and effective therapeutics that addresses a wide range of variants. The surge of variants, the lack of worldwide vaccination, and a school-age population that is not eligible for vaccines makes surveillance a very important tool to monitor spread and evolution of the virus. So by a farmer, we reported $4.8 million in orders and $2 million in revenue. This was a great quarter for BioPharma. We saw a continuing increase in repeat business with many of our long-standing partners. As a reminder, our BioPharma revenue only includes a portion of the upfront or licenses associated with our partnerships, as we recognize revenue over the course of each project. In addition, orders directly convert one-to-one into revenue, most often in the following few quarters, depending on the timeline of the project. Milestones and royalties represent additional potential financial upside and are not calculated in orders or revenue. During the quarter, we find several new partners for our TWiST antibody optimization solution that utilizes fully human antibody sequences. These collaborations showcase our capabilities to improve the quality of a particular molecule. As we expand our data package with additional examples of our success interest in this particular platform for both humanization and affinity maturation. We do not typically get milestones or royalties for these collaborations, and yet we believe they are critically important as an entry to larger partnerships with key pharma and biotech companies. I am very glad to report that we now have 31 partners and 43 active programs, 26 of which have milestones and royalties associated with them. In addition, 19 programs are complete and now in the hands of our partners. In addition to the partner programs, we continue to advance our internal compounds, generating additional preclinical data. Concurrently, we continue to pursue many avenues to expedite the path for twist antibodies to reach the clinic. Moving to data storage, we continue to make solid progress as we drive towards commercialization working with a proof-of-principle chip at one-micron pitch. We are building an integrated chip that includes both the CMOS and MEMS components needed to commercialize the product for data storage. Once the integrated chip is working, our next step is to create an integrated alpha 3D chem chip, miniaturizing the feature size even further. We expect that once the alpha chip rides TINA consistently, this chip will support our first early access commercial offering. The target customers will be those who preserve cultural heritage as well as media and entertainment organization. The DNA Data Storage Alliance is now 34 months strong. There is an active website and the group released its first white paper on the state of DNA data storage in June. They meet monthly. and are making great progress in educating the larger storage community on the benefits of DNA as a storage medium. At this time, I'd like to turn the call over to Jim to review our financial results for the quarter.