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Operator
Good day. Welcome to TWIS Biosciences' fiscal 2021 fourth quarter and full year financial results conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star then one on your touchstone telephone. If anyone should require assistance during the conference, please press star then zero to reach an operator. As a reminder, this call is being recorded. I would now like to turn the call over to Angela Binning, SVP of Corporate Affairs and Chief ESG Officer. You may begin.
Angela Binning
Thank you, Michelle. Good morning, everyone. I would like to thank all of you for joining us today for TWIS Biosciences conference call to review our fiscal 2021 fourth quarter and full year financial results and business progress. We issued our financial results release as well as the press release announcing we entered into an agreement to acquire at Barris this morning. both of which are available at our website at www.twistbioscience.com. With me on today's call are Dr. Emily Leproust, CEO and co-founder of Twist, and Jim Thorburn, CFO of Twist. Emily will begin with a review of our recent progress on Twist businesses. Jim will report on our financial and operational performance. Emily will come back to discuss our upcoming milestones and direction, and then we'll open the call for questions. As a reminder, this call is being recorded. The audio portion will be archived in the Investors section of our website and will be available for two weeks. During today's presentation, we will make 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 the press release we issued earlier today, as well as those more fully described in 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 ongoing impact of the COVID-19 pandemic and any resulting business or economic impacts. 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 our chief executive officer and co-founder, Dr. Emily Leproust.
Michelle
Thank you, Angela, and good morning, everyone. Fiscal 2021 was a defining year for Twist. We diversified our synthetic energy business and expanded our customer base while accelerating our NGS revenue. In parallel, We leaned into Biopharma, evolving the company from solely a service provider in this business segment to a partner of choice. In data storage, we continued our engineering progress and are working within the DNA Data Storage Alliance to build market awareness of this novel storage solution. Overall, we've moved from a product-specific focus towards enabling applications across large and growing end markets. We have made some important announcements over the last two weeks And we'll take some time today to talk through the strategic directions of the company, as well as how the individual pieces fit within our overarching plan. Against the backdrop of a global pandemic, we reported record revenue of $132.3 million for the year, an increase of 47% over fiscal 2020. And we reported $159.5 million in orders, an increase of 37% over fiscal 2020. For the first quarter, with a tough count against last year where we had a single large order of $9 million, we reported revenue of $38 million and orders of $45.2 million, an increase of 17.6% respectively. Diving into the specific businesses, Alsace is by a farmer, as we announced a definitive agreement to acquire at Veris this morning. Adveris is a privately held antibody design and discovery company focused on in vivo discovery using a novel mouse platform. They have conducted many discovery campaigns for partners with about a 70% rate of return. They currently have 90 customers operating today on a fee-for-service model. We see Adveris complementing our synthetic antibody discovery capabilities very nicely. Following the acquisition, Their animal-based antibody discovery method and antibody screening technologies will augment our own antibody discovery and optimization capabilities. Importantly, they have an established customer base with six of their discovered antibodies in clinical trials. The company has 35 employees and will continue to operate in their headquarters in Boston following the acquisition. And we believe that in fiscal 2023, the average business will be cash flow positive. Taking a step back to look at our overarching biopharma capabilities, following the integration of Adveris, we will have three complementary discovery approaches under one umbrella. In the first approach, we have synthetic discovery libraries where Twist has a competitive advantage throughout DNA synthesis platform technology. We synthesize every sequence desired, including only those found in the human repertoire. And screening targets against these libraries can generate robust antibody leads. Second, another approach is to generate antibodies from an animal immunized with a target and then harvesting and sequencing the resulting antibodies. That is the specialty of adverse platforms. Third, we have entered into technology collaborations with several companies to leverage artificial intelligence and machine learning technologies to screen through antibody leads and to refine antibody libraries. With the acquisition, Twist will have all three approaches, offering a unique and comprehensive antibody discovery and optimization capability to our partners, as well as for our internal antibody generation. In addition, we have products that support the total discovery process. Our oligo pools can be used to identify targets, and our NGS tools can be used to monitor our laboratory diversity during panning. Once a customer has an antibody lead, TWIST provides tools to develop the lead further through our FinBio offerings, starting with genes and gene fragments and moving all the way through the resulting IgG proteins. Also in biopharma, as you know, we've been working to advance our COVID-19 sensitive assets discovered through our proprietary biopharma process. We've been working hard to put together a team with clinical development and commercialization expertise. And last week, we launched Revela Biotherapeutics, an independent biopharmaceutical company. We license our lead by specific antibody to treat COVID-19 to Revela, and have committed to provide up to $10 million in initial funding. In addition, Revela can license up to five additional targets over the course of the next four years, each program subject to additional milestones, payments, and royalties for TRIS. While the COVID antibody will not be first in class, do see the opportunity for decision template that one, neutralizes all variants of concern, and two, could be delivered subcutaneously, which may offer an overall best-in-class molecule. We know there remains a need for therapeutics that effectively treat long COVID, as well as antibiotics that have broad neutralizing capabilities among the emerging variants. As global vaccination is far from complete and vaccine effectiveness, unfortunately, appears to be declining over time. The recent data on oral therapeutics over promise, though they typically need to be taken within five days of onset and could have safety concerns that may not be seen until more widely taken. And a peer-reviewed publication recently noted that antibody therapeutics also promise to provide long-term protection for immunocompromised patients who don't generate a robust immune response to the vaccine. We believe this leaves space for antibody therapeutics in the treatment regimen. We expect COVID will become an endemic disease and, sadly, that it is here to stay. We believe the best path forward for our COVID antibodies is to put it in the hands of a team experienced in clinical development and commercialization, and to participate in the upside through equity appreciation, potential milestone payments of over $100 million, and mid-single-digit royalties on any commercial sales. Reveal our aspects to begin clinical trials for this antibody in 2022. subject to receiving regulatory approvals and clearing other development hurdles. These pins-offs fit our internal biopharma philosophy of minimizing biology risk and quickly developing an antibody with an improved pharmacological profile that hits a validated target. We expect that Prevela would be a vehicle for development of up to five additional non-COVID targets emerging from our biopharma platform, each of which come with additional upfront milestones and royalty payments. This allows TWIS to participate in the upside of any of the five additional licensed antibodies, whilst mitigating the risk of development through external funding and an experienced management team. Strategically, for Biopharma, we have a vision of what our DNA synthesis platform can add to this industry. We have now built a base of 34 partners with 41 active and 32 completed programs. Of the 73 total programs, 35 have milestones and priorities associated with them. By completing the acquisition of Averis, we will have more customers and programs coming on board. And through Revela, we expect to have a twist on the clinic in 2022, pending the required approvals. Turning to synthetic biology, we reported $14 million in revenues and $20.1 million in orders for the first quarter. Over the course of fiscal 21 and looking into fiscal 22, we have evolved our program to enable us to capture more pharmaceutical and biotech customer needs and address the requirements for the large number of customers who make their own DNA. We believe the largest and most impactful application of synthetic biology from both a financial and environmental perspective will be in healthcare, and we are seeing that play out in our customer base. We have a growing number of customers using our genes, oligopools, and laboratories, Our customers used these products to link phenotype and genotype, and ultimately to gain a deeper understanding of biology for the development of new diagnostics and therapeutics. During the quarter, we saw some impact from an extraordinary event where we needed to shut down production for a short period of time. During QC, we determined that unwanted DNA sequences were included in our genes. None of these genes were shipped to customers, but we did experience a delay in some gene orders. We were able to successfully troubleshoot this issue, clear the resulting backlog within three weeks, and still reported robust order for Symbio in the quarter. We did experience a brief recurrence in October that we were able to resolve much more quickly, and we believe we have now identified the root cause and do not expect further interruptions in production. This event highlighted our need for additional capacity and dedicated machines. which we are building currently in the factor of the future outside of Portland. At the same time, we have a path to significantly increase capacity at our headquarters in the Bay Area to ensure we can make the increasing demand from our customers for the next 12 to 18 months. We recognize that we not only need to meet the ongoing increasing demand, but to slow any surges in demand when large in orders arrive. Today, We have capacity to make approximately 45,000 jeans per month plus fragments and NGS products. And we are building capacity in South San Francisco of 80,000 clonal jeans per month by December and 90,000 jeans per month by April of 2022 to ensure that we continue to meet the needs of our customers while we bring the factory of the future online in 2022. Turning to NGS. We reported revenues of $21.4 million, a record quarter even against a comp in 2020, where we shipped a single $9 million order. We launched several products to bolster our offering, including the Exome 2.0, the most comprehensive Exome offering with best in-class performance. In addition, we introduced our Alliance Panel products, which are kits with curated content from key opinion leaders in their respective fields, sold through Twist. This quarter, We also launched a robust clinical exome from the broad and a pan-cancer panel from Accord EX, building on our first alliance panel, the SNP diversity panel with content from the Regeneron Genetics Center. We also announced plans to launch panels with center genes focused on rare diseases. For data storage, we achieved a significant milestone under IARPA's molecular information storage, or MIST, program. IARPA's evaluation team came to TWIST in October and provided us with a set of DNA sequences to be synthesized on the one-micron proof-of-concept chip in a single day. The sequences were not shared in advance, and we passed the test with flying colors. In addition, we confirmed that we can synthesize DNA at individual sites on the one-micron proof-of-concept chip with no crosstalk or spillover into adjacent sites. This was a critical technology demonstration that validates our ability to achieve smaller dimensions. We are currently in the design phase for the Alpha chip, which will be our first full commercial release chip. In the meantime, we will lay the groundwork to sign early access customers. To that end, in October, we hired Stefan Helmold, previously at Western Digital. With the significant technology advances that we have made in data storage, we are now focused on preparing for early access product launch, laying the foundation for commercialization of this disruptive and important storage solution. Stefan will help define our commercial strategy and leverage relationship build over a carrier in storage to ensure we offer the right products for customers in this space. At this time, I'd like to turn the call over to Jim to review our financial results for the quarter.
Angela
All right. Thank you, Emily. As Emily noted, we had another exciting and dynamic year as we continued to scale our platform, and we closed out the year on a strong note. Revenue for the quarter was $38 million, a new record for TWIST, which is a sequential growth of 9%, and year-on-year growth of 17%. And this brings our FY21 revenue to $132.3 million, a 47% increase from FY20, and slightly above the top end of our guidance of $129 to $132 million for the year. Orders were $45.2 million for the quarter, a sequential increase of 16%, and 6% year-over-year. This takes our total orders for the year to approximately $159 million. Gross margin for the fourth quarter was 40.7%, and our total year gross margin was 39% as compared to 32% in FY20. We shipped to approximately 2,900 customers for the year, and that's up from 2,200 in FY20. And we ended the year with cash and short-term investments of approximately $478 million. Healthcare is now our largest segment and accounts for 54% of our business, with a revenue of $71.2 million in FY21 versus $40 million in FY20. And that's a 78% growth year-in-year, reflecting growth in NGS, biopharma, and growing demand for our SYN bioproducts. Industrial chemicals revenue was $34.5 million in FY21 versus $29.1 million in FY20. Even though we're operating in a pandemic where many academic labs were impacted globally, our academic revenue is $25.3 million versus $19.6 million in FY20, reflecting our continued focus on growing the long tail. Agricultural revenue was $1.3 million essentially flat with FY20. Now I'll provide more color on orders. We ended on a very strong note with NGS orders for the fourth quarter of 21.8 million, which brings our total NGS orders for the year to approximately 76 million compared to 53 million in fiscal 20, which is approximately 43% growth year-on-year from a high comp base we referenced earlier. This growth reinforces the robust and growing market opportunity, our expanding product portfolio, investment in our commercial organization, expanding our customer base with increased adoption and increasing NGS applications, including liquid biopsy, MRD, RNA controls, and clinical applications. During the quarter, we received orders from approximately 670 NGS customers And the top 10 accounts placed orders of approximately 10 million, as compared to approximately 7 million for the top 10 in the previous quarter, confirming we're seeing continued diversification of our customer footprint. Our pipeline for larger opportunities continues to scale, and we're now tracking 199 accounts, and that's up from 182 we noted in our last earnings call. 88 have adopted Twist, and that's an increase from 79 we noted in our last quarter. Now turning to SynBio, we saw robust growth in our SynBio orders, which includes genes, DNA preps, IgG, libraries, and oligo pools, which rose to 20.1 million in the fourth quarter, up from 15.7 million in the third quarter of FY21, which is a sequential growth of 28%, and up from 16.1 million in the last quarter of fiscal 20, with healthcare segment being the major driver to growth. Now to biopharma. We continue to scale our biopharma antibody discovery business as orders rose to 11.6 million for the year, which is a growth of 123% compared to 5.2 million in fiscal 20. Orders in the fourth quarter were 3.4 million as we continue to build our pipeline of new and repeat customers. As noted earlier, We have 34 partners with 41 active programs, of which 35 are milestones and royalties. Please note, orders may not translate into revenue, but do provide a trend line for each product group. Now, moving from orders to revenue. As noted earlier, revenue for the quarter is 38 million and brings a cumulative revenue for fiscal 21 to 132.3 million. versus $90.1 million in fiscal 20, representing approximately 47% year-over-year growth. NGS product revenues scaled to $21.4 million in Q4, a sequential growth of 14%, and it's notable that we exceeded the $20.2 million for the same quarter of FY20, which included the $9 million we mentioned earlier. In Q4, the top four customers accounted for approximately 50% of our revenue. For the year, NGS revenue grew from $44 million in FY20 to $72.7 million, which is 65% growth year-on-year. Our sin bioproduct revenue for the quarter was approximately $14 million, and that's down sequentially from $14.3 in the previous quarter due to the aforementioned production issue and seasonality in Europe. Total annual SynBio revenue is $53 million compared to approximately $44 million, or 20% growth year-on-year. Some of the highlights include shipping to 1,900 SynBio customers in FY21, up from 1,590 in FY20. Our genes revenue is $39 million, and that's an increase from $35.2 million in FY20. We also shipped a record number of genes, approximately 372,000, and that's an increase from $338,000 we shipped in FY20. Now, to buy a farmer, our revenue for the quarter was approximately $2.6 million, and full-year revenue was $7 million as compared to $2.4 million in FY20. And during the year, we serviced approximately 43 customers, demonstrating the progress we're making expanding our platform. I will now briefly cover our regional progress for FY21. Our investment in building out our global commercial organization is reflected in our strong international growth. EMEA had another terrific year with FY21 revenue of $44.1 million versus $25.8 million, and that's 71% growth year-on-year, and EMEA now accounts for 33% of our worldwide business. APAC had a great year, and FY21 revenue grew about 100% to $10.3 million from $5.1 million in FY20. The U.S., which includes America's revenue of $77.9 million for FY21, is compared to $59.2 million for FY20. And moving down the P&L, our gross margin for the quarter was approximately $15.5 million of 40.7% of revenue, up from 40% in the prior quarter. Total year margin was approximately 51.7 million, or 39% of revenues, up from 32% in FY20. Now to operating expenses. Our quarter four operating expenses, which includes R&D and SG&A, was 57.7 million. R&D for the quarter was 19.4 million, which brings our total investments in R&D to 69.1 million for FY21, and that's up from 43 million in FY20. The major contributors to our investment in R&D were compensation due to higher headcount and external services primarily associated with our investment in DNA storage and also increased investment in biopharma. Our SG&A in Q4 was 38.2 million, which brings our SG&A for the year to 135.9 million as compared to 103.3 million in FY20. The increases are primarily higher compensation as we continue to build out a commercial organization, increased stock-based compensation, higher fees associated with the audit, and investments in dressing our material weaknesses, and increased lease expenses as we expanded our footprint in San Francisco and the factory of the future importance in the Portland area. Our net loss before tax was $41 million per quarter floor, and our total loss for the year was $152 million, which includes stock-based compensation of $37 million and depreciation and amortization of $10 million. CapEx for the year is $27 million, including $13 million for Wilsonville, mostly for equipment deposits and facility improvements. Given the global supply chain challenges, we have strategically increased our inventory to $32 million compared to $12 million at the end of fiscal 2020. We ended the year with cash and short-term investments of approximately $478 million. Now, I'll give some updates on our FY22 guidance. As we noted, we saw strong bookings in quarter four and are optimistic on our opportunities. At the same time, there remains uncertainty associated with the pandemic. For FY22, our revenue guidance is in the range of $173 to $181 million. And including the expected completion of the AVERIS acquisition in Quarter 1, Fiscal 22, our revenue guidance increases to $183 to $193 million. SINBIO revenue is estimated to be in the range of $67 to $70 million as compared to approximately $53 million in Fiscal 21. Our NGS guidance is estimated to be in the range of $94 to $96 million, as compared to approximately $73 million in fiscal 21. BioPharma revenue, including our anticipated adverse acquisition, is estimated to be approximately $22 to $27 million, as compared to approximately $7 million for fiscal 21. For the first quarter, we're projecting revenue in the range of $37 to $39 million, which we believe is prudent guidance reflecting the upcoming holiday shutdowns in Europe, COVID pressures, and the impact of the production issue we discussed earlier on the call. Our fiscal 2022 gross margin projection range is 35% to 37%, which reflects the costs associated with our Wilsonville wrap-up. Excluding these costs, gross margin would be 42% to 44%. Operating expenses, which includes R&D and SG&A, are expected to be approximately $315 million for fiscal 22, as compared to $205 million in fiscal 21, reflecting increased investments in biopharma, approximately $40 million, data storage, $20 million, our commercial organization, $20 million, and Portland's OPEX startup costs of $10 million, plus there's higher stock-based comp and higher depreciation. Our R&D expenses for the year are projected to be approximately at $130 million, up from $69 million, primarily due to investments in data storage and biopharma. Our net loss guidance for the year is expected to be approximately $250 million. Stock-based comp is projected to be approximately $47 million, and depreciation is expected to be $13 million. Our CapEx for FY22 is projected to be approximately 80 to 90 million, with approximately 75 million investment in Wilsonville. In summary, we'd like to thank all the Twisters for delivering another terrific quarter to the record booth. We had another exceptional year continuing to execute on our strategy, enjoying broad demand from our customer base, and we're significantly stepping up our investment as we continue to tap into new revenue streams. And with that, I'll now turn the call back to Emily.
Michelle
Thank you, Jim. We accomplished a tremendous amount in fiscal 2021 with execution across all areas of the business. The execution resulted in significant revenue growth and customer acquisition for Scientific Biology and NGS. And we continue to see huge opportunities ahead for both markets. With the recent strategic transactions of Revela and Alvarez, we are well positioned to accelerate our biothermal vertical. And in data storage, The engineering accomplishments we have achieved to date set the stage for commercial planning and market introduction. While these four business areas address very different market opportunities, each relies on our silicon-based DNA synthesis platform, which remains at the core of our competitive differentiation and success. Looking ahead, fiscal 2022 will be a year focused on growing market share as well as investing for future success. In synthetic biology, We plan to continue to build our business and expand our customer base. We expect to launch IGG commercially for pharmaceutical and biotech customer base, building on positive feedback from our early access customers. We remain focused on bringing up the factor of the future to reduce turnaround time, especially for genes. We believe we will begin to see the benefits of reduced turnaround time and adoption for Symbio customers who currently make their own DNA in fiscal year 2023. For NGS, We expect to continue to grow revenues from our existing products while expanding our capabilities around RNA and laboratory preparation. We expect to launch a 255 laboratory preparation product we acquire through the iGENIC transaction this calendar year. And we intend to expand our customer base for both SNP microarray conversions and alliance panels. For BioPharma, we look forward to seeing our first company in a clinic in 2022, subject to receiving the appropriate clearances. In addition, We intend to sign additional partnerships and add programs, as well as possible opportunities to participate in a greater share of wallet and rapid clinical advancement. We also expect to out-license at least once we discover antibody by mid-Canada 2022. For DNA data storage, we intend to continue to drive to early access customers and pilot production. Thus, we will continue to execute on IRPAS NIST program milestones and an actively advanced market resolution for this new storage medium in concert with the DNA data storage alliance. With that, let's open the call for questions. Operator?
Operator
As a reminder, to ask a question, please press star then 1. If your question has been answered and you'd like to remove yourself from the queue, press the pound key. Our first question comes from Dan Brennan with Cohen. Your line is open.
Dan Brennan
Thanks for the questions, guys. Maybe just first one just to start on the impact from the problem cited for SynBio in the quarter. Did you quantify how much that contributed, and is there anything baked in within your fiscal 22 guidance from that?
Michelle
I'll jump in. No, we didn't quantify the impact in 2021. We did notice that We did note that we actually finished very strong both in revenue and order for the first quarter. And the headwinds from this issue were included in the Q1 guidance and the fiscal 22 guidance.
Dan Brennan
Got it. Okay. And then maybe on the acquisition, It looks like there's around $10 to $12 million of revenue kind of baked in. I guess maybe first question is, how do we think about kind of the – can you give us a sense of the growth rate of that business in particular? How do we think about the go forward? I know you've kind of given these cents for fiscal 22, but any sense on – could you give a little more color on the customers that they have and the outlook beyond fiscal 22? And then related to that – Is there any conflict as you internalize their technology, you know, given that TWIST is looking to develop its own antibodies? Is there any, you know, risk from their own customers that, you know, they view as they're now competing with them?
Michelle
So I'll start with the first part of the question, and I'll start with the second part, and I'll let Jim answer the first part. As far as the competition, no, actually, it's very synergistic. They use an in vivo approach which generates antibodies that need to be humanized and so that goes directly to the Twist platform. There are some targets that don't generate immune response even in the hyperimmune amounts that they have so that's perfect for the Twist approach. We have customers that want to maximize their And so, actually, they do both approaches in parallel. And so, it really adds, it's very complementary, and it will enable both platforms to build on each other and be synergistic. Jim, do you want to comment on the financial question?
Angela
Yeah. So, Dan, yeah, the 12 million reflects roughly about 10 months revenue this year. Um, we obviously working through the integration, obviously optimistic. Uh, we anticipate seeing significant revenue growth in that business. So, uh, right now we're, we're estimating roughly 30% annual rise growth from that base. Uh, but obviously update that as we continue to, uh, develop the business with the terrific team from Averis. You know, one advantage is we're adding customers, I mean, roughly 90 customers. which is an expanded footprint for us in bio-organizations as well. And in this world where it's tough to get talent, we're bringing in some terrific Averis team, highly talented, and really complements what we're doing with our biopharmacists and biobusiness.
Dan Brennan
Great. And then maybe a final one. Just on MGS, could you speak through, you know, the fiscal 2022 guidance, maybe some puts and takes? Like, what... You know, if we were to look back in 12 months and that number were to be higher, what are the key levers? And included in that, I'd be interested to find out kind of how liquid biopsy is kind of impacting the MGS outlook for 2022.
Angela
Yeah, I mean, the end is a strong note. Bookings were nearly 22 million. The number of customers we're tracking, the large number of customers in our pipeline continues to grow. It's almost under 200 now. definitely seeing opportunity in liquid biopsy, definitely seeing opportunity in MRD. We've launched our Exxon, as Emily mentioned, so we're expanding our product portfolio. And right now we feel we're making prudent guidance for the fiscal 22. Our goal is to continue to invest in commercial organization, to continue to give weight club service, to expand the product portfolio and increase in R&D. So we're optimistic in terms of the long-term opportunity here and feel well-positioned working with a large number of customers. Great. Great. Thank you. Okay.
Operator
Our next question comes from Tycho Peterson with J.P. Morgan. Your line is open.
Tycho Peterson
Hey, good morning. I'm going to start with Wilsonville. I just want to confirm you're reaffirming the kind of mid-year 22 target to open that up. The slide said 2022. And then, you know, as we think about, you know, capacity there, I guess, I mean, you're generally short cycle, so you're not necessarily pre-booking capacity at this point. But how do we think about your ability to kind of, you know, scale that capacity? And Jim, On margins, I know you're talking about 35% to 37% corporate overall. How do we think about the margin impact as the year progresses around Wilsonville as that capacity gets up and running?
Angela
Yeah, so good question. On bringing up Wilsonville, we're starting the initial ramp around our fourth quarter. Maybe step back, the overall impact for Wilsonville, I'm estimating dollar impact for the year is $25 million. Roughly about $10 million is in our OPEX with G&A. Estimating towards the back end of the year, we're going to have about approximately $13 million to $15 million as we ramp up the facility. So that's been the impact, you know, Q4. But if you step back and you just normalize the margin, we're in the 42% to 44% range. I mean, our goal is to grow Wilsonville. We see the opportunity to be able to leverage pricing as well as we address the faster genes. So our goal is to scale that business as quickly as possible. That's why we're investing in the commercial organization. We've made a lot of early investments in terms of the capital tools we're starting to hire. And as you can tell from the conference call, we are putting also additional capacity in San Francisco. We're very bullish in terms of numbers and bio customers. And although there's uncertainty around the pandemic, we're sure we're being prudent with our outlook.
Tycho Peterson
Okay. That's helpful. Emily, on data storage, you know, nice to hear the milestone, proof of concept, you know, as you get ready for early access launch. Can you just talk about what's left from a technical perspective, you know, before commercial launch, and then, you know, are there milestones we should be tracking for that business for 2022?
Michelle
Yeah, from a technical perspective, the next step is to keep going down in dimension. So... Last year, we guided that this year we will have the one-micron machine working, and we do. So the next step is to keep going down. Cross-talk, as we mentioned, is the key technology issue, and now we've been able to make it work for five-micron and one-micron, and so we're very confident that We understand the physics and the chemistry and how they relate to each other. And so that's why we have the confidence to mention that the next chip, our alpha chip, will be our first commercial chip. So we're in the design phase for the alpha chip. Next phase will be the production. Next phase after that will be the debugging development of the chip. And when that is done, we'll be able to use it with real customer in a way that's very similar to what happened this quarter with the MIS program coming to us saying, you know, those are the sequence I'd like to make. The same thing will happen with our first customer. In terms of milestones, It's all about getting the chip to work, signing early access customers, and as we mentioned in the past, the customers that we'll focus on for the alpha release will be customers that are very desperate, frankly, to get onto a new storage medium, and customers that have a forgiving environment We know that now it's going to be the fourth platform we launch at NGS and Bioforma. We know that it's important for the first few customer interactions to work in environments where there is room for back and forth and optimization of the process. And to that extent, Stéphane Elmold is a great executive addition to the team to make that happen.
Tycho Peterson
Great. Last one, just on some of the business development updates. I guess first on Averis, do they get downstream economics? You mentioned six antibodies in the clinic. Should we think about that as being additive to the milestones and royalties?
Michelle
Not at this point. At this point, their platform is entirely fee-for-service. As we combine integrated businesses, I think we'll have opportunities potentially to the economic share that we're able to gain.
Tycho Peterson
And then how do you think about the opportunity for Revlar, you know, with this spin? I mean, obviously the antiviral data from Pfizer and Merck was pretty good around COVID. So how do you think about that in context of, you know, your monoclonal antibody opportunity? And then you mentioned, I think, five, you know, non-COVID programs. Is there risk longer term that Revlar could ultimately compete with some of your own development efforts on the therapeutic side?
Michelle
No, not the way we structure the business. It's unlikely that Regula would be working on the same targets as we are. And if they were, we'll definitely have the advantage of having starting first. So it's very synergistic. The COVID assets are enabling us to be in the clinic in 2022, which is great for a first recent antibody. We have a great, experienced team. And the idea is to syndicate the risk by having the work done at Revela supported by external funding at the same time as we keep an upside through equity appreciation and nice upfront milestones and royalties. So it's very much additive and there is very little risk of working on each other's feet the way the deal is structured.
Tycho Peterson
Okay. One last one for Jim before I hop off. You know, you've got $465 million or so in cash in the balance sheet. You know, the burn this year is going to be about $300 million, I think, with net loss and CapEx. Can you just talk on how you're thinking about the balance sheet and potential needs to raise more capital?
Angela
Yeah. I want to keep a strong balance sheet. We see lots of opportunity for the company going forward. And as always, I'm a conservative Scots guy. And, yeah, You know, we're bringing up Wilsonville this year. We're investing in data storage. We do see upside in terms of the growth in the business. And as we evaluate our opportunities, I'll be making sure we have a strong balance sheet to finance the growth in 23 and 24. Sounds good. Thank you. Yep.
Operator
Our next question comes from Catherine Schult with Baird. Your line is open.
Catherine Schult
Hey, thanks for the questions. I guess first, maybe just going back to the production issue that you mentioned, what was the root cause there? Did it impact all of your production? And then you mentioned clearing the backlog in three weeks, but also called out that there would be an impact to send bio-revenue both in the fourth and first quarter. So when did the disruption occur, and do you think you lost any customers due to the delays there?
Michelle
Yeah, thank you for the question. So the issue happened in August. As you know, synthesizing gene is actually very difficult. It's many steps with chemistry steps, enzymatic steps, cell steps. And there was an issue in the combination of reagents and hardware. And frankly, the issue was compounded by the fact that the FAB was absolutely full. And so part of the issue is when you're at capacity, there's no extra hours in the day running 24-7 that you can use. And when you're at capacity, it actually takes longer than it should to clear the backlog. So that's one of the reasons why we are adding capacity. in San Francisco in the meantime to make sure that when problems do happen, we're able to catch up very quickly and make it basically transparent on the customer side. In terms of losing customers, long-term, I don't think there's necessarily a long-term impact, but it does put us a little bit on the back foot as we start the new year and end the year, the conservative guide for Q1. Now that we actually saw it a second time, very briefly in October, and that really helped us solidify our understanding of the root cause, and we believe now that it's totally eliminated. It's hard to prove a negative, and so Only time will tell, but we're very confident in understanding scientifically what happened and making sure it won't happen again.
Catherine Schult
Okay, got it. Thank you for that, Collar. And then you talked about expecting to have the first twist-discovered antibody in the clinic in 2022 with the COVID treatment from Revolar. What about on the partner side? Do you have any indication of how many of those 32 completed programs are advancing and when any of those could advance to the clinic?
Michelle
We don't have a lot of visibility on where they are. we have no indication that any of them is not moving forward. As far as we know, they all are. And so we are due in the not so distant future for a twist antibody to be in the clinic. And so I don't know if the COVID antibodies would be the first ones, but definitely the COVID antibodies are the ones that we have, you know, excellent visibility in them. But at the same time, you can see that we report every quarter how many antibodies, how many programs are completed. The number is increasing quite nicely, and so we're just increasing the number of shots and goals for more and more trace antibodies in the clinic.
Catherine Schult
Okay, and then last one for me, if we could just maybe go back to Dan's question on NGS revenue guidance for 22 came in a little bit higher than where we were, so that was great. Can you just parse out what you expect from existing customers ramping their business with you versus new customer wins just as we try to think about the visibility into that number?
Angela
So, good question. Most of the revenue ramp is going to come from new customers ramping as their assets increase in volume with the tests. We do track the pilot and validation revenues, but the bulk of our revenue comes from those in production, and we'll expect that to be the same for fiscal 22, and that's what's baked into our forecast. We don't break out how much is pilot, how much is validation, as yet, but with the growth of the number of customers, Q4 bookings, Q4 orders, and the types of assets we're designed into, we're feeling good about our revenue forecast for the year.
Catherine Schult
Great, great. Thank you.
Operator
Our next question comes from Vijay Kumar with Evercore ISI. Your line is open.
Vijay Kumar
Hey guys, congrats on the print and thanks for taking my question. Let me see if I can ask 800 questions on the call. So Jim, maybe starting with your revenue guidance here. X, the acquisition that you guys did, I think the base revenues were 173 to 181. That's about 30 to 38%. Considering you guys just did, you know, well north of 45% organic against a tough comp in fiscal 21. Is that mid-30s or low to mid-30s perhaps conservative? It seems like NGS growth of 30% against a 65% growth in fiscal 21 seems to be slowing down. How much of this is conservatism versus any factors that perhaps you might be seeing in the business?
Angela
Yeah, so in terms of the business, business is going well. We are obviously still in pandemic. You're seeing lockdowns begin to reappear in Europe. We're always, and Vijay, we're all putting in our guidance. I want to be thoughtful. The NGS business is going extremely well. The number of large customers continues to scale, order scale. We're investing in our commercial organization. We're launching new products. And at the same time, we want to be thoughtful in terms of the guidance. Yes, there's some major wins in our sales in terms of the market opportunities with LiquidBio, say MRD as an example. We're an extremely talented team at Twist in terms of innovating new products. So I think we'll obviously update the guidance as we go through the year, but right now we feel good about the 94 to 96. And In addition to that, I mean, the NGS market does continue to accrue as you see sequencing costs coming down. So I think there's good opportunity for us in FY22 and FY23.
Vijay Kumar
Speaking on to guidance, the Q1 of 308, that's sequentially flattish. Historically, you guys have grown sequentially last year. In fiscal 21, if you adjust for the comps, timing of orders, again, you were up sequentially. Why is Q1 sequentially flattish, and what kind of impact are you baking in from the manufacturing issue? Is that a factor in Q1, and should those revenues be recognized in the back half?
Angela
Well, there's three issues. First of all, Europe is... higher proportion of business. Revenue for Europe was about 44 million. So this scales significantly from 25 million previous year. So the European Christmas vacations and shutdowns has got higher impact. And also, we've got to be realistic, we are seeing spots of COVID pressures around the globe. We're seeing some of that in Asia. We're reading what's going on in Europe right now. And we're trying to calibrate the impacts of production issue. And the relief is the guidance is prudent in the 37 to 39 million range.
Vijay Kumar
Interesting. The one on free cash flows, your guidance for net loss of 250 million, that's a massive step up from 150 in 2020. fiscal 21. What is driving this, Jim? I mean, that's a really big step up. It looks like you guys have about $470,000-ish of cash on hand. Is that enough for you guys to break even on the cash flow side?
Angela
We're a couple things. We're stepping up our investment in biopharma. You know, the overall OPEX is increasing from $205 million this year to $315 million. And We're stepping up investment by a farmer at roughly $40 million. We're stepping up investment in data storage by $20 million. And we're continuing to invest in a commercial organization ahead of bringing on Wilsonville. And the Wilsonville investment in terms of CapEx is coming here is about $75 million. Yes, we're deploying capital. We're still applying capital because we really see the customer demand coming in the future. We've got a great team from innovating. Customer base continues to scale. So we're looking at this as a long-term opportunity to invest and scale up in the marketplace.
Vijay Kumar
Gotcha. And then one last one. Your biopharma guidance of 22 to 27. X the acquisition rate. We're looking at somewhere between 12 to 15-ish. for the year. That's a pretty healthy doubling up of biopharma revenues, Jim. Is Revolar Biotherapeutics a customer of yours? You know, I know you have the equity stake. And if it is, how much of a contributor is that? What is driving biopharma strength?
Angela
Yeah, there's nothing in that step up, assuming for Revolar. I mean, the We have built up the investment in biopharma over the last year. We're seeing a lot of customers come back. We're getting about 70-odd percent return rate, and this is just based on our continuing to invest in the commercial organization, invest in biopharma. You're seeing that step up in growth. There's enormous demand for antibodies, and we've got a platform. They're leveraging our DNA platform, our synthesis platform, So we're seeing significant opportunity, and that's why we're going to step up there.
Vijay Kumar
Understood. Thanks, guys.
Angela
Okay.
Operator
Our next question comes from Puneet Sudha with SVB Lyric. Your line is open.
Adveris
Yeah, hi, Emily. Thanks for taking the question. So I have a bigger question here on biopharma. First, we saw Revlar. Obviously, prior to that, you have invested into Twist Biopharma and now at Barrett's. So just wondering, you know, given that you have oligos in, you know, in library of libraries, you have now Diversimab model with mouse model. you have seems like Avaris is using Berkeley lights for clone selection and maybe getting some throughput there. But if you could maybe just elaborate at this point in time, what else do you need for your biopharma capabilities and essentially antibody discovery capabilities, immunization, high throughput screening, repertoire validation, maybe in expression and scale-up. Maybe just walk us through what you need at this point, or do you have all the components that you are seeking here to build a stronger biopharma antibody discovery business?
Michelle
That's a great question. I think we pretty much have what we need. As I mentioned, the three big avenues to discover and optimize antibodies are the TWIST approach using synthetic libraries, The animal approach, which now we have with Adveris. And then the machine learning AI approach, which we have a number of collaborations ongoing. So we have access to all three tools. And internally, we've already optimized the panning, the sequencing of the head, the reformatting of the antibodies, the high-throughput affinities thing, function listing. So we are pretty much set, and I think the combination that we have is going to be very powerful, and we can offer a very comprehensive set of suites to our customers.
Adveris
Okay, that's helpful. And then I'll keep it to two. On supply chain, Jim mentioned a couple of things. Things seem to be you know, holding well so far, but just wanted to understand in terms of we were hearing quite a bit about plastic plates and pipette tips and other products that might be used in, you know, twist products and, you know, delivery of products with multi-channel pipette, I mean, multi-well plates and multi-channel pipettes and things like that. So maybe just help us understand, is there anything that we need to keep in mind there and broadly across supply chains? What are some of the things that you're looking out for? Thank you.
Angela
Um, well, we, uh, we entered into the pandemic last year. We, we, uh, strategy of building out your supply chain and, um, we get, uh, we get ahead of the curve. Uh, obviously, uh, we're vigilant in terms of, uh, any potential bottlenecks. Uh, we did increase our image to 32 million and, uh, It was interesting. We did a tour of the facility recently, and the feedback was, wow, you guys have got lots of tips sitting around. So we've done it. So far, we've done a good job on keeping ahead of the issues. Obviously, we're seeing demand increase. We've got a terrific team in the supply chain that have been delivered in terms of the materials. So It's just a matter of keep grinding through this and executing.
Adveris
Got it. Thanks, guys. Thanks.
Operator
Our next question comes from Matt LaRue with William Blair. Your line is open.
Matt LaRue
Yeah, hi. Good morning. I just want to ask again on gross margins in terms of pacing throughout the year. So I guess just contemplating coming back from the backlog here. in the fiscal first quarter and then factor the future ramping later in the year. Can you just maybe help us with, with pacing for gross margins throughout the year?
Angela
Yeah. I mean, the, um, I mean, as, as you bring on the fact of the future, um, I mean, we are going to see increased fixed costs. So we're looking at a total spend for the future. It's roughly around $25 million. Of that, about $10 million is sitting in OPEX, G&A. About $14 to $15 million is roughly about $14 million, actually. It's going to impact us in the second half of the year. With the... I think in terms of break it out between Q3 and Q4, it's about 30% impact in Q3 of that 14 million and the rest hitting in Q4. So you can build those numbers into your model. But if you just step back, I mean, excluding the factory of the future, we're targeting roughly, or we're seeing margins arranged 42 to 44%. And as we get into the first half of the calendar year, we'll give you more updates on what that cost looks like so you can normalize the margins.
Matt LaRue
Okay, and then you mentioned some growing interest within the healthcare segment for synthetic biology, so just curious if you could discuss that a bit more, and then maybe somewhat relatedly, just give us a sense for what you're seeing in terms of longer and more complex genes in terms of demand there.
Angela
Yeah, so in terms of the healthcare segment, yeah, so we've grown significantly in healthcare. I mean, it's been the area that we've seen most growth. So what's driving that? So there's three factors on the healthcare side. You've got the growth in terms of NGS. You've got growth in terms of biopharma. And then on the SynBio side, we had lots of questions on the last earnings call with sequential bookings declining from Q2 to Q3. You notice that bookings did increase from Q3 to Q4. That's driven by predominantly the healthcare segment within SynBio. What does that mean in terms of genes and the gene length? those tend to be shorter genes. So we've seen a switch of our gene activity from last year. We had a higher percentage that was longer genes, i.e. more than 1.8 kB. This year, if you're looking at 1.8 kB in non-clonal genes, they're accounting for, in the last two quarters, roughly 70% of our gene volume. What's driving that? pharma business is driving that.
Operator
Okay, I'll leave it there. Thanks. Our next question comes from Luke surrogate with Barclays. Your line is open.
Luke
Yeah, everybody, thank you for taking my questions here. Just real quick. Did you guys call out the actual dollar value impact from the shutdown and symbiote in four Q and what's expected in one Q?
Angela
Look, no, we didn't. I can tell you just from a sort of cost point of view, it was roughly just under a million dollars that impacted us. That's due to mostly having to do reruns and waste. In Q1, I mean, obviously, we're still working through Q1. The biggest issue in Q1 is just, you know, Europe's higher share of business We had shutdowns, European vacations coming around Christmas. And we're seeing some hot spots in Asia in terms of COVID. And at the same time, we're seeing significant demand coming in in terms of we had really strong caution in orders. And, you know, we'd rather be prudent at this time of year. We feel good about the growth rates and the annual guidance. and want to make sure that we calibrate well for quarter one.
Luke
Okay, that's helpful. And I guess as I'm thinking about 22 and we're thinking about the NGS tools business, major upside driver, I think, to a lot of the way that investors are thinking is going to come from the liquid biopsy. Can you give us a sense of how big that business is for you? How we should think about... either Garden's new test coming in the early 22 or the Anchor DX in China, how those kind of fade through?
Angela
We don't break out liquid biopsy. Liquid biopsy is a contributor. I mean, we've got close to 200 large customers who are tracking We continue to do well in terms of the number that have adopted. Those that have adopted do include liquid biopsy. I mean, our goal here is to build a broad platform because we're seeing more than just liquid biopsy. There's MRD. You're seeing other NGS-type applications. We have the iGenomics acquisition. We've got a microarray to NGS conversion. We've got a potential Regeneron coming back. So our goal here is to keep building the business in terms of number of customers and number of applications. And obviously, the liquid biopsy will contribute, but we're not breaking out the liquid biopsy impact.
Luke
Yeah, okay. Sorry, I just... try to get it out of you.
Tycho Peterson
That's okay.
Luke
Lastly, on the R&D step up, this is more of just kind of a longer term idea here. So you guys have the biopharma business, the DNA storage, and then the rest of your core business that's looked at as kind of the cash driver here. So give us a sense of how you bucket out that R&D step up. Is that mostly going to the clinical trial work from biopharma or Um, how is that also keeping abreast of, of the R and D spend for NGS tools so that you guys can continue to accelerate that growth given it's a smaller business, but it can be a lot bigger.
Angela
Yeah. I mean, um, so, so you're just stepping back, looking, looking at the business. Um, I mean, we are, we are stepping up overall R and D, um, and, uh, You know, the biopharma roughly will be, you know, we're increasing additional 40 million biopharma and 20 million in data storage. So that's what 60 million of the total 130. So in terms of core business, you know, we're investing substantially more than 20% of revenue in that core business. and we'll continue to keep investing in our core business because we are seeing terrific opportunities in terms of NGS, as you've outlined. Also, we're seeing good opportunities in terms of investing in expanding the SynBio platform as we start to launch our IGTs. So I think I think we're being balanced in terms of our overall investment in 130 million R&D with biopharma opportunities. Emily has highlighted data storage, yes, longer term, but it's becoming more real. All right. Thank you.
Operator
There are no further questions. I can turn the call back over to Emily LaPrause for any closing remarks.
Michelle
Thank you very much for joining us today. To close the call, I want to personally wish you a wonderful Thanksgiving. We are especially grateful for all the Twisters who have delivered an excellent fiscal 21 and are already enthusiastic about the opportunities that lie ahead for Twists in fiscal 2022. Thank you very much.
Operator
This concludes the program. You may now disconnect. Everyone, have a great day.
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