Q4 2020 Twist Bioscience Corp Earnings Call
[music] welcome to twist final.
And just fiscal 2024th quarter and full year financial results Conference call.
This time, all participant lines on listen only mode.
And that's because presentation there will be a question answer session.
Two questions on such need to press star one on the telephone. Please be advised on today's conference is being recorded if you party from assistance. Please press Star zero.
And now I turn the conference call over to Jim for Burns Chief Financial Officer.
Thank you operator, good morning, everyone I'd like to thank you all for.
Joining us today from twist Bio Sciences conference call to review, our fiscal Twentytwenty fourth quarter and full year financial results and business progress. We did this year and financial results This morning, which.
Which is available on our website www dot twist Bioscience Dot com with me on today's call is Dr. and really look Prost CEO and co founder twist and we'll begin with a review of our recent progress on twist business I reported on financial and operational performance and namely will discuss or.
I'm coming milestones and direction.
Well then open the call for questions. As a reminder, this call is being recorded the audio portion will be archived on the investor section of our website and will be available for one week. During today's presentation. We will make forward looking statements within the meaning of the U.S. Federal Securities laws forward looking statements relate to future events or future from that.
<unk> operating performance.
Expectations and beliefs regarding these matters may not materialize and actual results and 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 errors day as well as those more fully described and our filings with Securities and Exchange Commission.
Forward looking statements and this presentation and based on information available to us as on the day to your off.
And we kind of had this time predict the full extent of impacts on 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 will now turn the call. It worked from Chief Executive Officer, and co founder Dr. and really look crossed.
Thank you Jim and good morning, everyone she's could be EPS way. It's one he has been a transformative year for <unk>.
He said all of last year, we reported RBC on full fiscal 2019 and related revenue guidance and 80 to 80 for me and then I'll Cook She's going 2020, why we grew about guidance given d. and took and you know the price indeed and crucial to many customer flight.
Extremely pleased to report record revenues of 90.1, and hopefully school 2020 and.
32 point for me that on <unk>.
Oh strength can revenue went through been baby innovation and commitment to a conviction from all and how you see a twist.
There were three exceptional and chocolate chip cookie from two to deliver great products to walk us and those.
I can see incredibly disruptive I grew up on the could be a day.
We did EBIT growth you know, what the Cline and adding new products and specifically address even moving south Korea to balance.
I'd like to note that and lighting and like some of our peer companies on a regular revenue you noted from sort of could be nice weighted products and im fine wine Oh from the peak on any control and fulfill could be too and now and yet others and sequence of virus. This can't be contributed to net revenue.
Steadily since day, one and she is products with growing and initial revenue from all buying from a division that this kind of Oh soups and she's Claudia.
It is free thing and two we reported record older. Almost 117 years, though you were 42.2 and me and it on to the fourth quarter setting the stage for growth into 2021.
Moving into the business and I could begin with bio where we reported 30 or 43.8 million that on can revenue from school.
And.
Over the course of the year before it's on building a product line specific to buy it from a sequel and basic customers, we introduced new preparations and specific to a kiss and don't need on time and on digits.
You shouldn't be building because every day.
I think the antibodies and skin.
Print ads, we called and launch in the second quarter, and we're seeing customers engage and agents and initial deals getting traction.
And the fourth quarter revenue.
He received initial orders from out there on the Axis Kinston up and we expect group and you too.
Good day.
Moving into and through Canada on 2021, none of the capabilities available in commodity and.
And what were building you kudos and put structural.
In addition to quote a couple from my customers, we expect to launch.
Did you and front with the next one.
These products would be useful and for their own kind of the market force schools 'cause to those would be the huge and sort of thing.
Oh from these these are good and it gets to make them on jeans and sort of thing.
As we look ahead into fiscal 2021, we have two areas of focus.
So it and what we call the factory of the future.
The next evolution of uplift from <unk>.
We expect to launch and 2022, and we to allow us to bring additional differentiation, including effect still going on on time from wonderful.
And based on like trends and future.
Dublin, Okay on capacity.
And we see on is executing and fixturing side outside of the day.
He did he said she needs and we probably has the capacity to scale revenue to 500, and your though and.
And you pull on three looping on business to a new differentiate those two and look segment.
Okay and markets, we cannot address today.
[laughter] pick on cookies would be or on a business to business capabilities.
Currently we have an exception on frictionless ecosystem that tracks and photos from initial countries to shipments.
Well no if we keep on building capabilities and see BT business to business and direction that will expedite the volume policemen.
Enabling us to be an approved and though we didn't show up and system.
For instance, currency constant on the University of California is required to generate yield and then I can think she's done before placing on all day.
It would be to be integration, we didn't go discussed and most replacing older on our website <unk> unique and specific appeal from.
Their institutions.
Moving see if again volume.
We could you know mix and targeting and yes.
We loved channel and she is broken down into 2018, and I am pleased to be pulled that from the first time revenue for the fiscal year approximately equal cool they revenue.
He sees an exceptional customer and to the powerful let from <unk>.
From that each market and also you know with these products should go though 'cause it on strive to improve health and system to be.
We expect continued growth for these quick line I'll be purely and.
He's a long sales cycle and many are focused and those are using your products will peak on trial.
The timing of that's good and the associated revenue from <unk>.
Dependent on debt success, and exceeding and we're confident in doing moving is free but we do expect it to remain lumpy and didn't yet though.
[laughter] and 2020 with you and they'll just have could be like and we don't didn't you proclaim those should it be comfortable initially from Fox could be too and subsequently fulfils the on risk with <unk>.
These controls can be used and we can show that they get sick pets accurately detect passage and.
And for claims as many though could be nights and.
On the open you competing to push and you get to though and we have no sheep controls and moving they keep on those 200 foot custom, though as a single dose one.
So he sits on doing 30.
[laughter] these customers I know from your always twist and.
And we are working to sell additional products and can you pick up.
In addition to the controls we know Evan and fiction used Brooklyn, which we believe would be critically important moving full and as we continue to fight could be 19, why and maybe get the on going up to.
Good day and last week, we launched you complain feedback on panel, we screens and $3100.
[noise] continuing to all per plant expansion, we introduced on mitigation solution.
12 early access customers will probably great feedback thing we.
We expect to make these products made with more broadly.
Between 21 and it is.
And we intend to add multiplex and exceed 12 product mix highly technical work flow extension to our current unit dose will be on index. It.
We believe these we said on she both cost and those developing liquid biopsies and and so they miss it.
That's a different cheating on sort of tougher.
We continue to focus on convincing and kissed the mills, who are currently using sleep and I, probably synergy and.
We've had some incredible success and be suitable we do every last Christmas and nobody can be switched into fourth quarter.
We expect to continue on success in winning new accounts.
And moving into fiscal and 2021, we see a significant opportunity to pursue conversion.
And with Nick Microarrays that come and <unk>.
Millions cooks and outlooks from system.
Well and the coastal something mono I mean, that's good.
Oh, the volume is much larger.
In addition to since day, one and yes.
We see growth coming from you expansion on the phone Williams from <unk>.
We strive to own the work flow upstream from sequencing and live rich the channel reach what their companies.
We know and silicon different companies and filling Oh, and yes, and can do products and have their brendan.
And this unique so did you have allowed us to book approximately five to six and is it off and moving people 2020, and it is poised to grow.
Turning to and that's a good luck a couple from me too but.
And five business continues to exit.
Oh, the close of fiscal 2020, we anticipated that non fine five to pick up and should and I'm pleased to report that fine sales team revenue <unk> GAAP on ships, we've eaten including milestones and all and.
Well all of them with fine during the fourth quarter was between 20 and on pipeline.
I plan on football treat you remain robust.
We are now beginning to and you go and that all fall partner.
Oh, Yeah, no platform continues to improve.
We look for ways to share these data on that so she did the clinics, but given the confidential nature from partnerships and it may not be placebo lead in all cases and.
In addition, we believe this information is dependent on all possible approval.
In addition, we reported preclinical data from three probably three and because of that we just could not using albeit from and never weed control.
And that should the two of us and getting that made it it nanobodies well take that gets weight loss and all those levels.
Good evening and Louis do the one milligram per kilogram in quickly cool and still models of sales could be too.
In addition, the field Ige antibody discovery twist.
Corp, we and they'll be equal.
He called from too.
Phone to protect against weakness at five and and you're going to skew towards your growth.
Why do we may outlets and these antibodies for a wide range of opportunities.
Roof of conservation fall ability to go from target, So basic Tees and said with the data in preclinical model.
Oh PSP the robust back line on potential partners.
On on skeptical.
We have demonstrated and we can't and money ties up I from platforms revenue true ownership.
And don't next evolution used to generate antibodies against our own collagen and then license them out and <unk>.
We have identified seven keep these targets what we'd be reasonably okay, but from a platform can generate differentiated and that would.
We intend to advance development and you start to get through all discovery and books musician platform and.
Moving to be pushing out licensing opportunities for these antibodies.
And that's it.
Moving to that and storage last quarter, we reported an impulse on technical breakthroughs that we believe we've fixed and you could foods on your acquisition of all speaking on the country.
We continue to make very good programs are we on.
No producing some good beginning for the customer it on five micron devices.
Dave.
And my crop and pumps from which was though it that much and called the pitch you.
She is an incredible accomplishment and importance it on all technology roadmap for the full debt that you noted.
And that that's too much.
Right and I don't know using these chipping on R&D camp and he sweat.
[noise] demonstrate that it works.
Oh, and then why and ensuring that it works.
We already design and have received and next city can chip, we even moved from you know tradition.
Sick on chip.
As they and 392 devices.
On the one Mike from pitch.
We each maturing and <unk>.
I think on accomplishments, we work with and the cheap I went to kit sales.
Good day.
The ones, we have and working prototype, we then moving into the delinquency and why do you hold on and designing the next day acquisition of the chip taking into account how expense we each division.
Okay, and actually we plan to scale and 215 and and meet the pitch on it.
Once we achieve our targets you design, we recruit and pets, we have you digging a bit lumpy until the final determination, we read from piece and getting it to transition.
Transition [laughter] simple.
Process, we used to flow through on commercial scale Silicon platform, who had experience and soups and beat the book.
In addition to I think it will probably earlier this month, we announced a significant value on for you and it that the storage, which brings together and you do you see and Twitter and that's what it means that we work on that and drive awareness and widespread adoption.
And you don't come on storage option, we don't always microscope, which and did you do and Illumina a funding model and.
Several additional organizations working interest and Ive joined the growth.
It is important to note that these high and does not change and timing of all Inc. and hope they put you on what he's done he's been a consensus or on deal cost free people used to reach me yes.
I mean, the market when did the synergies would be from entry and.
Piece to be the jobs.
At this time I like to the on the Court will go to Jim to review, our financial results for the quarter.
Okay. Thank you Emily and.
Family noted we have delivered another very strong quarter and what continues to be on uncertain environment due to the cobot and pandemic disruption.
And we'd like to thank all our twisters for another terrific quarter and I'm standing here with progress our orders for the fiscal year achieved a record 116.7 million and.
And revenue was 19.1 million and our gross margins scale to 51.8% for the year.
We believe it is important and a strong balance sheet and these on certain times and we concluded the year with approximately 290 million in cash and short term investments and.
And we exited the year with strong operational results our revenue for the quarter research 2.4 million.
But the force 2.7 million orders.
Yeah on pharma business is doing really well with an initial for revenue generating agreements and fourth quarter and we also had record and yes revenue and orders on a gross margin is notable in the fourth quarter was paused and 4% to 6% and we grew our customer base to possibly terms and 200 from 1300 and the previous fiscal year.
And let me share with you more details on our orders from the fourth quarter.
Our ngs orders.
Were 23.6 million and received orders from approximately 600 mgs customers. The top 10 accounts, placing orders of approximately 15 million in the fourth quarter and.
And for the full year, our and U.S. orders were approximately 54 million and that's comparable to 28 million and physicians from T. My team.
So, we're making a lot and progress and Ngs and our larger opportunity customers contributed about 34 million of and towable Fytwenty Ngs orders.
And pipeline for larger opportunities continues to scale and we're now tracking on 150 accounts up from 132 accounts, we moved to fund our August earnings call.
And just 55 from doctors and that's an increase from 47 and the previous quarter.
Now turning to us and bio.
Yes, and bio art nurse and this includes artists from jeans libraries, and always locals and get income for $16.2 million in quarter, four and brings our total spend by orders for the year to approximately 58 million.
And that's a 40% year over year growth.
For the year total genes orders grew from approximately 33 million in fiscal 19 to 47 million and physical 20, and getting partners increased from 8 million to approximately 12 million and.
And please know it cant go accounted for about 10% of and total orders for the year net.
And I have to buy a pharma biopharma orders on corn and for 2.9 million and.
We signed four additional revenue generating partnerships, bringing the total to 13 with eight of those including milestones on a relative bias.
Biopharma orders for the year from 5.2 million and we're looking very strong heading into fiscal 21.
With future upside from milestones and royalties.
In terms of our segment orders, we saw the academic segment pickup and Q4 orders of 8.5 million as compared to 5.4 million corpses free cash.
On a large order of approximately 2 million from one institution, which will build over the next couple of years contributing to our girls.
Our healthcare segment reported strong bookings and the quarter was 23.6 million due to strong orders and Ngs biopharma partnerships and continued progress and expanding into large pharma.
Industrial biotech bookings for the quarter were 8.8 million, which included gingko bookings and 3.5 million.
Please note, we provide orders and not to directly translates into right now, but more to provide and trend line from each group.
We also anticipate both and G.S. and gingko orders to be lumpy quarter to quarter.
Now moving from orders to revenue.
We reported revenue of 32.4 million in quarter, four and that's another record quarter and twist.
Our ngs product revenue for the quarter and claims and 22.2 million.
And for the year grew from 21 million in fiscal 19 to 44 million and physical 20.
As expected the second half of the year was very strong from Ngs products, and 9 million was booked and billed to one customer and corp for this.
This is a customer we have worked closely with for a number of years and and another confirmation of the transition from SMIC microwave and yes.
And also notes and originally Fytwenty revenue projections and.
Just finish at approximately 3 million this order to kill and during Q4, so well lumpy less so than and missing on the surface.
And I touching and bio per cent bio product revenue for the quarter was 11 million. It was down sequentially from 11.8 million previous quarter ever Gingko declined from 2.8 million to 1.8 million sequentially and that's mainly due to the timing of those projects.
Our Q4 genes revenue was 8.6 million versus 9.6 million courses free that's mainly due to kick and kill as noted earlier and.
Net revenue decline juices summer impact from yeah.
Brett White 20, or so and bio business was approximately 44 million versus 63 million net net fynineteen gingko revenue for the year, and 10.7 million versus 9.2 million and previous fiscal year.
And again cool now accounts for approximately 12% of our revenue in fiscal 2020.
Our jeans business, which is doing extremely well.
We shipped approximately 300 and debt to nine I wasn't genes and the year and that's compared to 280000 last year and our genes revenue grew from 26.7 million and therefore, and 19 to 35.2 million and like 20, and that's an increase of approximately 52% and is worth highlighting.
Revenue in our longer jeans versus 3.2, and five Kb jeans, and net fytwenty claim to 14 million and that's up from 9 million and that fynineteen or per.
Perhaps which we launched and April rights and the middle and pandemic contains skill nicely and we build up close and 1 million for the year.
And I Biopharma revenue for the quarter was 1.3 million how does it build a rapid antibody discovery and project differences, which includes tightening screening and high throughput IGPM vacation.
We're very excited about the progress, we're making and highlights our biopharma revenue goes to 2.4 million for fiscal 20.
I will briefly cover the regional progress.
Do you I guess grew to 59.2 million that fytwenty from debt to six point Ninemillion and fiscal 19.
EMEA revenue grew to 25.8 million and fiscal 20 versus 14.7 million and fiscal 19, another year of traffic growth and EMEA and EMEA and now accounts for 29% of our worldwide business.
<unk> Pac revenue from for the year was 5.1 million versus 2.8 million and fiscal 19.
In terms of how we're doing by industry.
The industrial biotech revenue was 29 million per fiscal 20, which added approximately 52% of our business health care is now our largest segment and accounts for 44% of our business with revenue of 14 million and fiscal 20 as compared to 17.4 million in fiscal 2019.
This growth is primarily due to their success and yes.
Biopharma and continued success and penetrating large pharma.
Academic revenue and fiscal 20 was 19.6 million.
And that's compared to 13.8 million and fiscal 19.
Hi, good cultural revenue is 1.4 million versus 1.2 million and previous fiscal year.
Moving down to the P. and out on gross margin for the quarter was 14.9 million.
46% of revenue.
And for the year gross margin was 31.8 percentage of revenue and that's up from 12.8% and fiscal 19.
As we noted before the increase and our margin reflects the impact of scaling on revenue is leveraging our fixed costs and the benefits of a higher mix of Ngs province, and terrific execution by our organization.
Our operating expenses, excluding and caught sleek and cost and revenue for the Corp fourth quarter increased approximately 39 million.
And that brings our total operating expenses, excluding agile and lived litigation settlement <unk> hundred and 46 million as compared to approximately 116 million and fiscal 19.
In terms of year on year comparison, R&D for the year increased to 43 million from debt to 5.7 million net finance team and I asked you to increase investments and our resources, we increased our headcount from 102 times and therapy and also note that fytwenty.
Includes 2.5 million offset expense.
Expense offset flow.
Yeah on the ground.
In terms of S. G fast G and H. This increased 203.3 million from 18.1 million and they're finding team and that's primarily social investment and our commercial organization. We've scaled our organization from 122 heads and sales and marketing to 166 also we had.
And increased commissions associated with a higher revenue and stock based comp increased by 5 million from an fynineteen Fytwenty and next year and they are.
Our net loss for the quarter was 24.3 million.
And that's that's down from 20.2 million loss and the previous quarter and.
And that's mainly due to a higher gross margins associated with scaling our revenue.
Stock based comp from Q4 was 5.1 million as compared to 4.1 million and corpses free depreciation Corp. Before it was 1.9 million and that's up from 1.7 million and Q3 and brought on you and your writers.
For the year on net loss was approximately 140 million and that's including 22.5 million for the litigation settlement agile and pushes booked in quarter. One also includes approximately 17 million for stock based compensation and approximately 7 million for depreciation.
Capex was approximately 10 million for the year and major investments from capacity expansion, primarily for and your writers and lot of equipment.
I will now cover outlook for fiscal 21.
We are positioning the company for strong growth and they're quite 22 and be on and although there's a great deal of short term and certainty and challenges on the Prime day keep evolving our view is that quite 21 will be a dynamic here.
Our revenue guidance for 21 is in the range of 100 and time 218 million. This.
This includes gingko revenue and the range of 11 to 12 million for the year.
Non-GAAP Cinephile is estimated to be in the range from 41 to 44 million from here.
And yes revenue is estimated to be and range from 54 to 58 and Biopharma revenue is expected to be approximately 4 million for the year.
Our gross margin guidance for the year is approximately 32% and we will scale from 27% from quarter, 1% to 37% and quarter on.
Sure.
Our margin and as always is influenced by mix and also impacted by new capacity utilization as we launch new products, such as I G and scale or DNA, perhaps.
We're targeting very large growing markets.
I think it's finding significant classes and those markets.
We have demonstrated our platform and skills.
And demonstrates our ability to tap into additional revenue streams.
We're optimistic about the opportunities ahead, and continuing to invest for growth and build their remote and as such we're stepping up our investment and innovation and fiscal two into one.
Operating expenses, which includes R&D and S.G. and they were approximately a 174 million from the.
We're setting up some place and increasing our investment in R&D to approximately 60 million from fiscal 21, and that's up from 43 and fiscal 20.
In addition to increasing our course and violent and G.S. resources, we're increasing R&D and a storage investment to approximately 15 million R&D.
And Biopharma investments 12 million and fiscal 21.
No, it's the DNA storage investment and and white Twentys by 3 million our.
Our net loss guidance for the year is expected to be in the range of 100 and start to 6 million to 141 million and this includes stock based comp trends and marine and depreciation of 7 million.
Capex guidance for the year, starting Marianne and that that includes expansion.
Into our new facilities and really highlighted.
As it were well through on December quarter were projecting a revenue and December quarter to be in the range and 25 to 26 million.
And in summary, we view, our I've looked to be prudent for fiscal 21 fiscal 21 will be a dynamic here.
And we're stepping up to the plate on pursuing large growing markets and investing for long term success and with that I will turn the call back to Emily.
Thank you Jim.
I'm, sorry, we achieved an amazing quarter and you wouldn't see the light into the challenge is the 20 Twond and.
We'd be got a pre could be 90 and revenue expectation they didn't room and exceptional products and importantly service to our customers throughout the group and then.
2020, and 50 at this you know people on plan, a resilient and I.
Ex cream and PTC that as an organization, we have risen to the challenge and it could come there yeah like my Guy, though we use the tools. We have created those we do not and we will do is filled with you.
Looking into peaceful and went 21 force can buy you. We expect continued growth and diversification of club and stream renting from us the accused products, including preps and agents and low.
Launch of crews and clearly between prime and <unk>.
To be solutions to allow us to capture those PCC and site solution.
And then see if he can from big investment you know fixture of the future to creep that flow strong growth in 2022 and beyond.
And yes, which they can use revenue growth and gets to know when people reduction who launched optimization solution.
Picnic reduced on to you and my continued conversion and macro raised and twist. The sequencing on your on the and I think by you and and then expense billions with it and.
Probably a pharma who continued to sign partnerships, we expend on two days and and recruiting.
And we'll begin to advance our intent on my sense of that that would be consuming oh, thanks opportunities because it and its seats.
And for the storage, who can't you brought on ensuring wouldn't net to us, though and then tradition.
In addition.
You don't know agreement, whose eye on them and begin to put it that way from market the option of and new storage.
That's going to be 19 kids who'd like periods and wrapping there on the world. We do not know what piece could quickly and when we bring but we do know.
That would 58 on maybe gets through.
Women and really been single twist of Stephen to making well, though in fact through the per well up and that's one.
That's it.
And the call for questions.
Well clearly though.
As a reminder to ask a question on the depressed and wanting a telephone to withdraw your question press the pound key please.
Please standby will deposits you any roster.
Our first question comes from Tyco Peterson with JP Morgan Your line is now open.
Hey, good morning, I'll start with that guidance you know you are coming in a bit below the street here at high and I understand you want to be conservative. So maybe can you just talk about.
You know where do you see the conservatism baked into guidance I know, you're talking about 4 million and Biopharma contributions milestone channel could there be upside there and then on gingko that doesn't imply you know on mid 0.8, a decent deceleration actually down about 11% should can you maybe just talk through the dynamics, there and what would be driving net to decline double digits. Thanks.
Yeah, Thank you pick up and running.
And did we were prudent I would let Jim.
If you run on the question.
[noise], Yeah, Hi type as Jim Yeah, I mean, we're we come off and very strong quarter for as usual, we want to be prudent and.
Really give guidance or the meaningful and thoughtful and so we've built up bus and particularly on Ngs. We've built up a revenue by customer understanding where the customers are and in terms of converting from through the pilot and scale up and adoption phase and so we see.
Potential opportunity there I gingko or we have a four year contracts were about two and a half years into the contract.
And as you can call business is lumpy and I want to be mindful of Ah challenges that were old and I see it. So on the next year and so we believe the fixture business very conservatively, and we see upside and and bio and continue to make progress on large pharma or we see upside in terms of fiveg.
We also are doing well and scaling our our DNA preps, but as we stand back you know the pandemic is raging here and the U.S. and we wanted to to make sure that we calibrate are focused for the future, which is continuing to grow from quite 22 and beyond.
And best strongly and that's why 21 and position us moving and get to the other side and as Pandemics.
Okay, but does seem to see more clear 'cause gingko and the company is obviously going very quickly, but the 11% decline you're just saying that that's on lumpiness in relation to that that part of the guidance.
Yeah, Yeah, that's just lumpiness and that part and guidance, maybe we would have a four year contract, which is scale and the the minimums actually come in above the 11 to 12, but based on where we were what were saying is I just want to be a measured and and forecast is not a reflection and didn't lose business, which is a is a reflection.
On on our conservatism.
Okay, and then I'm on the on the Cody any bodies you know I know you talk on the press release about you know.
And they're developing these on your own or partnering I'm, just curious about how you're thinking about that opportunity you know we've seen some of your peers like adaptive you know out with the Amgen deal and and the Amgen chose not to go forward with that too what's your view on the potential to partner up on the outcome and anybody's and you know what would you potentially do all three internally if he couldn't find a part of a partner.
Well I think it's a great question. So from the beginning the idea wants to you see the delight of could be.
And to generate some better that that'd be cool on live rich marketing approach and and the data that we've had from could be the news from including some of the units we have in both hung up and and in making sure that thats going on its food and.
That being said we.
There's opportunities to license to lakes and one of these out <unk> Oh shoot a way, though we did stop Nate and we started at the end of March when everybody's studies and the people who we didn't I believe in a in early January.
In addition, and could be and that the hubs growth target and so the benefit difficult platform and we should be able to find antibodies against homes and really kind of good day.
He's not free.
<unk>.
And so that being said, we know and really.
Are you moving in the <unk> Creek, and you cool and the more model that that is good and we've always said that if we likes and one of those antibodies and it would be.
And I'd call. It so with the institution with a number of groups.
And but it's probably not the <unk> <unk>.
Drive for us to do it though like I don't think we.
On the two to go and do clinical work, we do and that often.
Yeah.
And with people that that someone license it and they.
One of them out and Oh, he though you need that doesn't happen.
On the monkey non bank them and did the.
And if he the bills and liberties and he was credibility and and.
And you know you know.
Coming soon and do both for both from a has been already they day.
Okay, and then before I hop on two quick ones and you had an ngs and onetime or in the quarter on can you. Maybe just talk to that was and that was maybe stockpiling and then separately on the Microsoft and alumina data storage announcement are there milestones, we should be paying attention to infer from 2021 for you guys. Thanks.
Yeah and then.
[music].
<unk>.
Sorry, I'm on <unk>.
Yes, [laughter], alright, yeah, and I take on and yes on the and 9 million is no not stockpiling and 9 million as as one large customer who had been working with for over three years. A we had originally anticipated the would ship about 3 million and Q4 and 6 million and.
21, they come back in and basically wanted though only product and one launch they are actually using that right now. So I'm, we're very optimistic as net microarray to ngs cumbersome and we're very optimistic about seeing some some more large orders coming and future boroughs.
Thanks, and then on the debt the tourism and the the I lie and.
And we don't yet and the debt.
Sales of.
She took the beacon and and this month and eye Institute the work that the the alliance when we were together again, they do and <unk> to help.
Prepare and the markets is that the one day is a productivity, but the market nobody prime so they would definitely be moving in that market preparation and point of view and any PON and Oh and the people who are you doing Uh huh.
So and that is.
Months and Thats well in from control.
We may not be able to get the substantial would be it'd be quarter, but oh and they oh, the 2021 day, they should be a more upbeat on the on the stick and cool thing.
Okay. Thank you very much.
Thank you Nick.
Our next question comes from Doug Schenkel, Whats Kelly and on something.
Hi, Good morning, everybody. Thank you for taking my questions I, just want to start with a couple of questions on.
I guess, what I would call and market outlook question. So the ones on far about ones on data storage and I want to follow up on a couple of financial questions.
Starting on pharma I may have missed it and actually no I did I did catch it. So you you you talked about in your prepared remarks on yeah. The fact that heading into 2020 and you were looking for a total and seven to eight Biopharma partners I think you've got 13, if I if I took that down.
Directly in my notes you know with that in mind as we think about 2021 pharma revenue guidance of $4 billion I'm, just wondering what's driving that how much of that as milestones product sales collaboration and you know thats really what are the components of the 4 billion and and then what what's on the importance of the de partners for that.
Number, especially on the more recent ones.
Thank you, Doug and and so we at the beginning of the year, we guided five to 10, a partnership and we ended up at 13 paid partnership.
And then in addition.
And and listen to upfront and then when we get paid and it's important to lives that we stopped I can read and Munchkins on one piece that we can like them and to eight.
And partnerships and milestones and all with.
And so to answer your question, when we and and.
And and all the although a number that is <unk> and from him and pocket to do.
And they need that that is the bond that we.
We know we would get the full show and.
And even though the demand is received upfront before we start the work we actually book the revenue as the work gets done and and so.
The revenue mix, you will be the oh from them and that we booked and hold although last year and and as we do the work, we and condos and revenue.
So on and the two thing.
One is that it because sometimes to do drug discovery.
And even though one on well I can't attribute that fast in addition to being and able to.
Hi, good kind of good it's a it's not it's a three day thing and so there's a pull system. That's we were in in house and and when it gets to the on and the Christmas and the ones who have those either <unk> up.
Upfront payment from booking revenue and.
So that that's where the 4 million reflects and then as the as we signed multiple nodes.
And and some of that's where maybe completing 21 and that's me.
And you know, it's not and the revenue that that's we are capturing 22 and.
And the second thing is is that in addition to that Oh from Penn and that you reported on every day every quarter and the.
Oh, the already and in addition, we on that.
My sense on when things we'd we'd.
We'd be we'd be the Madrid and.
Economic value.
Unfortunate neat and the women and courtroom and when that happened.
And supplements and some.
And there was maybe and what you need to be to base and me neither loosen zone Kroger.
Programs inside the company changes there may even be some assets, where the button that relates to complete their vendor neutral.
And its reasons and nothing to do with and antibodies and.
And so therefore remain.
On the mall business the demo Pompano balance sheets, we can sign with the momentum to <unk> and <unk>.
And that means that the sooner we get one of the twist and probably into the city and those who know me stop and critic thing.
Cody and those those my from <unk> revenues, and we know when they're going to guide on it so when that happens that's would be upside.
No that debt that's helpful because.
Probably saying things on a much less eloquent way, but probably there and the same thing and and in a different way that the 4 billion and actually you know.
All but locked in based on what you have contracted and booked already.
Average is predicated on your assumption of when I'm certain work is going to be taught it to the extent that any of that accelerated or there was a price milestones or you out and additional partners that would be upside to your target and if I'm understanding correctly.
Yeah.
Okay.
And then on data storage.
I just want to clarify a couple of things and this may reveal a little bit of my ignorance on this topic, but in your prepared remarks, you indicated that you achieved significant milestones on the DNA storage road maps and miniaturized look on platform technology down to 150 nanometer pitch on glass. You also indicated that you can consistently.
Besides DNA using five micron devices at 10, Micron patch and that you fabricate the new R&D stage Silicon chip, what 300 nanometer device on a one micron pitch trip I don't believe I've heard you talk about tickets before nor do I recall, you delineating between different device types and as recently as the recent.
Analyst day, when you talked about but you really focus on reducing feature sizes. So I guess the question is I I'm just wondering what the significance of what you described in your prepared remarks is and what this means in terms of timelines to actual product and revenue.
Yeah. Thank you I get from the whole the.
Krish and a happy to try and like so so you'll credits we have been talking about future upside.
And so on the current that's when we use today as a feature size of 50 microns. So that means that the dimension on to seek and cheap and preclude any as it is is sit.
Students, if it's a feature and micron and.
And you know, though too little will do could writing.
Because you know ranking DNA, we have to make that feature size smaller and.
So with that as we go to when my current feature size and then the micron.
In addition to that and you need to know Oh.
From a way the net feature you Nick.
Because if we need to use the feature size from 50 microns to one micron and.
But the next he truly steel seven.
17 macro and the way the PTC and 70, Mcrone Jakafi net no I'm not too much winco. So you have to do both you have to reduce the the feature size and.
And yet to be used to pitch. So that's on the simple phase of civic and you get you get more and you know sequences.
And so that was always going to and who well were on the changing his and units with on with the.
The roadmap, but where price being a need to be more information to get even more <unk>, but <unk> and the benefit and.
And the great accomplishment that and that's going to get.
So.
Weathering, Oh well pools.
Shrinking the size of a day.
And with picking them closer to each other because and both of those things.
Are you there.
Cost of goods on well did you mean.
There's no <unk> and.
No change and on outside both wheel coding and be more information to the street.
Okay. Thanks for that Emily and then and then maybe just a couple of.
More financially focused questions, you're essentially guiding to if I'm doing the quick math right, a 40% increase and R&D investment and 2021 and.
No Jim and his prepared remarks broke down the priority areas for investment.
Just wondering how we should and measure success per disinvestment and and over what time period, and and kind of a similar question on the Capex front.
You know I I believe that you talked about.
I think it's $30 million and Capex investment this year I'm, including the investment and the factory for the future on it.
If you could just talk about what the expected timeline and magnitude of returns that you're targeting on on non investment.
Yeah claims on I mean, we came off of a quarter four and.
Yeah really the the bookings were hot although it doesn't include 9 million and orders on Ngls from one customer.
We continue to see our customer base expand a particularly on the NGL side, we're seeing on a lots of opportunities because of our product strength there.
As we step back a we did increase the R&D investment I write from 43 to sort of Trump was 16.
Our stepping up and the a force the engine and G.S. and send bio core investment.
We're also and increasingly data storage investments and roughly about 3 million. This year to about 15 million and 21 and obviously, there's a story is for a longer term as and when we highlighted but we are seeing the ecosystem for data storage, increasing we're making progress.
From a technical point of view in terms of the core business. We've we were asked a number of times to give guidance on this this quarter for the year. The challenge we have is giving guidance on the middle of the pandemic, reaching Ah. So we believe that crude and prudent guidance. So there really.
Looking to and flight twist to.
We're investing in and actually the future, which will come on line sometime and 22 and but that's also positioning us for a 23, a we believe we're really going to open up the larger market opportunity and some bio a with a rapid turnaround time.
And our goal is I mean, we've tapped into new revenue streams from the platform, including I.G. I, we're seeing a DNA crap and scale, we do need continuity and her and all our factory outside the <unk> The Bay area and.
So we're really looking at how we position ourselves to get to $500 million.
Okay understood alright, Thank you very much appreciate it.
Okay. Thanks, Doug.
Our next question comes from cash consulting with Baird. Your line is open.
Hey, Congrats on a great finished on your fiscal year and and thanks for the question.
Yes, first maybe Jim kit to your last comment around guiding and and then [laughter] pandemic and guess what are your assumptions in terms of coal that duration and severity and I'm just curious to get a sense for how you're thinking about that in terms on the impact on your core customers and then how long, you're assuming and the cold and related products.
Contributions on continue.
[noise] and so couple of a couple of comments to me and I am I have we have a crystal ball I think are quite 21 is going to be a dynamic that I think everybody else has a crystal ball and and we've covered.
All we know is that during the last six months, we've adopted and as a company or we can tend to adopt and in terms of the environment.
And as we go forward next year I mean, our goal is to candy and continue to build and customer base and goes to launch new products and we are really looking through 21 and.
Who knows when that all the vaccines are going to be distributed and but we think 22 23 is going to be very strong year for us. So we're positioning and for those years. It was interesting sort of Mike would cause our decision, making was back and but stay pretty March timeframe not qubits. It.
Good day, we had lots of questions and Travis what should we do should we cut back in terms of employee salaries should we should we really be conservative.
What we did is we actually get more aggressive.
We stepped up our investment as you probably saw we give our employees shelter and placed compensation.
During the March April May June timeframe, and I think thats worked on to tear vantage from this coming coming year with cutting and co testing.
We continue to innovate and and really put more wood behind the arrow in terms of the the innovation and there's a large growing markets the markets scaling scaling and 20, 25% a year and we're positioned to be number one and that market.
All right, Great and and then Emily you mentioned, the new factory and the future will allow you to the GAAP different areas and bio that you can't today can you just elaborate on those opportunities and what the top priority to be for that factory.
And thank you for the question so.
And you know the single market is not one that fits on a and so we'd be it will really be on.
Ill touch on that.
[laughter], fixable, and and and we can make make gets them and they people can get.
Do you need from because different tubes, and can it get it dry and he can maybe in buffers, we can't know going on and so there's many many options and support any customers and they have high throughput that need and hundreds in selmo on schedule is really we mean cycles.
And.
We do really well in that segment.
And the.
The thing and that's where we are.
On pumps that much and that is the.
Interest that.
And since it is a segment and so.
Right and though we send you name it.
And then to 15 days and time and anything that you do and they sometimes we.
We can't itself and we see that day.
Okay and is poised for growth in the city as as Oh.
On speed and pulled on to some on those like on them.
And we we and we believe that Oh.
And this month and.
And it seems you can do and business.
Could be true so many people and.
Okay got it and then in terms of advancing your internal pipeline of antibodies and well give you a successful outcome in terms of the number of candidates you're able to out license and in fiscal 21.
Yes, so vicki.
Speaking to the year out to Q2 and 21.
He was going to do is from to conquer the tweet Alco swing a school kids with people developing and nice and the.
And antibodies with phone is that.
We do need to do a little bit of a preclinical development and to.
Colby and Oh no too.
The blue and the antibody, which isn't the per him. We that's something that that that's yet look and do we win and so.
And find partners like the case of queued up every day and beyond those two.
Good day function on data and in a preclinical animal models.
Oh, and then two if successful this would be to likes and and could be at that stage, and we which should give us bit who I couldn't make and then when you kind of partnership with an upfront and because these kids with with it a bit more risk.
And then and we have chosen and Uh huh.
And then on <unk>, which we believe and Oh hook targets and so we should get from.
We expect to get from and see if he can't ROI on on on our investment and and those two.
And the accretion that the debt.
In terms of timing and the remark you mentioned 18 month.
Just just because you pick either that comes from thing.
And so as you know, we and the management team will focus on the short term and we see quarter to quarter really win between those two.
And do take you and and and we'll go to them and.
You have no things, we can do today to make sure that the and we we enjoyed hoots of those seem to be plant.
On the DC, but.
The in subsequent years.
And it's either the New York, six and scalable and then.
Targets would be.
On they're like you couldn't and that's we get well good luck.
Alright, great. Thank you.
Thank you on next question comes from TJ Kumar with Evercore ISI. Your line is open.
Hey, guys and thanks for taking my question I had three questions one Jim and.
When you look at the guidance up maybe and a high level.
And he he grew by 65% in a pandemic, you're even excluding the one time or you've gotten too high for a.
Revenue growth was well north of 50% and the guidance is out looking at that you know low thirtys kind of topline growth and which one.
Anyone.
Is this just on a larger revenue base or perhaps and maybe put some of these numbers and context for us what why would revenue growth slowed down.
BJ and thanks for the question. So just stepping back if you look at and quite 20, we did have a 9 million from from one customer that came on at the end of White 20, we had originally anticipated that would have been 3 million and ER and.
Fytwenty and 6 million and a 21.
So you can take 6 million hours over and.
Why twin taking advantage and core and you put that on top of what we originally were forecasting and you're on the mid 100 Twentys. So the ngs business is lumpy and the point to note is we are scaling aggressively on that business I think the 9 million is significant.
And a win for the company.
And we were thrilled to be able to book and on ship and one quarter, we see other and large from merging opportunities ahead of us and that also is very difficult to projected timing Oh those opportunities. So far so it's always being on the upside.
ER, we are tracking about a 150, a large opportunities for and yes. Our view is the continuing to to scale nicely and 57 and have adopted.
And when you're trying to do for cash from the middle of the pandemic, we try to be thoughtful and prudent and in terms of what based on our bottoms off and and based on our latest communications on customers and less and based on our latest product strategy and.
And we want to give numbers that.
On the we've got opportunities to provide upside too.
So if you go back to the guidance and had last year a guidance was 80 to 84.
And we withdrew from the middle of pandemic.
And so if you normalize for the 6 million we hit the top end of the guidance.
And our belief is we are building for at White from two to we've got a fabulous platform the scaling and we can.
And for new build our customer base, and so I I I am very bullish on the future.
Understood and and now when you think about the revenue base ramping up.
And when do you think gross margins up.
Normally and take the 60 sort of target that you guys have.
Well, we hit and I was interested and we had 46% to me we've proven out a business model and when we witnessed.
When you said the financial guidance up for the year, we were talking about a 32% gross margin for the year.
We essentially and that gross margin for the year and albeit we had additional cost associated with shelter and placed compensation. We are ramping up you product capacity and as we go forward and.
And where we're still seeing and 60% gross margin range, Oh, I mean, it depends and makes the bands and capacity utilization or something and proven everything and I get close to 50% gross margin and <unk>.
And he is as we continue to scale with a new factory at 500 going and we're positioning ourselves from a very strong gross margins and upside revenue and we should be able to deliver the 6% gross margin range.
And Sir and one last one and only maybe out on on the on the seven antibody targets or disease areas you're going after.
And I think I heard you mentioned.
And your plan or expectation is to out license and what the next 18 months. If you didn't manage to out license on all seven of them are what what could the revenue contribution and beat here in terms of upfront payments. Thank you.
And I was thinking and <unk>.
We don't we don't need to to lakes and <unk> no seven of them to be.
Good.
Some of those Uquifa and within the 18 month period.
The.
With what we thought it.
Deposits, Oh, and study with two to see well be and it kind of gets us today, and so we own and build the crazy or on P. and when need be told us and it was too late to other people and when he be they'll but there's a point where PDL one quick so.
We we study they see and without the need to one and a two day and so those are all on the target and yes.
And and and and so their full those on.
Once we come to the autologous and and and Oh.
[noise] web and to like and some of them out and need the contribution could be and sets and substantial but it will probably be a value book I deal with some upfront and payment and and and probably the Detroit.
And.
Oh the upside.
From a milestones and royalties and that's we can beat you upside.
But seeing things and the timing and the size and a somewhat and something.
It's outside of the guidance, whether it will be good b and would be upside.
And at this point, though and then just.
It shows that you could be a day.
Good day.
And so thanks guys.
Thank you. Our next question comes from Puneet Souda with SCB moving your line is open.
Yeah, Hi, Emily and Jim. Thanks. So first question just wanted to clarify on the Ngs and order is there any reason you're not expecting the snip customer that moved to ngs to not continue with twist next year I mean.
I appreciate but it was significant lumpiness and the quarter, but just trying to understand you know.
Given given the seasonal nature of it and I assume this is a DTC and not a tissue or liquid customer that they should come in next year, but correct me if I'm wrong on that.
[noise] so.
Good question and Penny or we can't really share the specifics of the engagement. All we all we can share is that we've been working with this customer for three years.
We see a large new emerging opportunities in this space as we've talked about the migration from separate too and yes.
And that this validates that migration is happening and we are seeing more on the Genesis don't want to.
And don't want to give away our competitive situation here, because obviously people are watching us.
But I would argue is that a customer is extremely happy.
With that brought it down and we're looking at further engagement timing of that is is on Sachin.
On searching for a couple of things one as a large on large order. We had originally anticipated. It was between 3 million to be delivered in Q4, and 6 million this coming year old okay on ones.
They could come back and the end of next year and and did the same thing that's that's too far out to project or we have not in our forecast and with things like another 9 million dollar order.
We've built on forecast up by on by customer and.
Customer situations change based on their end markets situation, so been crude and terms arrange ask items for a 21.
Okay.
Sorry go ahead, you had something bad debt.
I I think I think the the other point I'd make is that.
So when we came out with guidance for this year guidance was originally that simple horkey. So clearly the transition and the scaling of our large accounts is happening and timing and just just a little bit difficult to predict but that's why we're projecting a the EPS.
So a number so.
Roughly around 50 460, <unk> this coming year.
Okay got it that's helpful and my second question is on liquid biopsy and wondering if you could provide any metric or give us a sense of the traction you're seeing there overall, obviously number of trials share are are ramping up and and some of them and screening as well and across.
Hi, Marty and other segments and the market and.
And I appreciate the agreement that you have it rail, but wondering if you can provide something on that and and what sort of what's what's built into the expectations for 20, and and with an ngs and that segment.
[noise] [noise] so no. Thank you printed.
So, we we Oh and the P. engaged in a weekly but she buckets not only in terms of the benefit of the plan from that we bring is pumped ticket on the effective in liquid biopsy.
As you know indisputable <unk> Sequins day day deep and so the uniformity that we bring.
And then if you do that you need from me in terms of lowering the sequencing cooks. The depot you sequence the moving from anything and so that's 50000 ex coverage.
Even more competitive and for cancer and that is that and then if you said five on a day coverage and even more.
And then finally and rare disease and that he said and 30 or 50 ex coverage. So the protein sales Hum.
Yeah on the adapted from the debt funds point of view to liquid biopsy.
And second.
We or adding to.
To that they've been if it to the extent that some people Luke and maybe mid teens and deep and we will launch.
And for the Axis kits, and those and we launched more broadly and it really.
The from and.
And differentiated solution flow tradition, we are adding a you and minds and I'd be digging into the details, but the bulk of that though.
Especially used from fall for liquid biopsy, so liquid moves he's clearly it would be some trial.
And because we because or the product and the cuts period that you do it and and because the potential buckets, Oh, a really big.
And so that's the good news and Ah.
Oh, it though and we can treat described with what our customers do and then babies could it come from.
And so we all felt you need that or in the corporate and mechanics of Grail a day, we're preparing to to do and I view and he is one good good treaties.
I think it's again shows to the potential problem, that's going on but we we are dependent on the on okay and moves to schools and the uplift from the U.S.
And then in addition.
What is the going really well.
No we can when we guide two which we which we see and and.
Oh and speech and is that when some of those clinical.
Equaled trials one of those.
In addition gets completed and the products on a commercial the volume could be could be even.
Bigger than bill and it could be substantially so that's why we are confident in the and the ramp but well.
And that is really in control of the timing and so the flow, we all prudent and in which we guide, but again, we'd be between quite and friendship differentiated platform, which is p. should be.
To give unfold for liquid biopsy.
Okay. That's fair I appreciate it.
And and my last question is on bio pharma and and this and better for longer term question. When you look at and long term here for the revenue that you're getting currently when and upfront and deals and and early milestones and it appears to me that you know give.
And the trial <unk>.
Given that it takes about five to 10 years for a a clinical trial to actually read out even after getting into the lead candidate and into the trial.
So it appears that debt. The you know outcomes here are much more longer term so.
Given <unk> with that and mind when is the earliest do we can see twist biopharm a lead candidate getting into a clinical trial do you think that can happen and 2021 or do you think that's going to take some from <unk> you know even longer time. Thank you.
No [laughter]. Thank you that's it.
And she will vary and tasted it in and getting because the so the net the first then we would get to month too is when a win and antibodies I and be ready from went on hope on those.
And that's that's going on to the full scale.
And so were very interested in that channel to reason one is you know to collect to collect cash and and second is because ER and.
The Big Inflexion point fall fall by from Oh, we'd.
We'd be a win and antibody into the clinic and and the twist, they've looked and optimized antibody get get injected into into the human and so and we're very very and with TV and you get to that on who those reasons.
However, it is quite a bit of a fall and and so.
Typically once you have an antibody and you can get it into clinic, we didn't we didn't to you.
And so if you go back to and other.
Timing of fall fall.
On a month to month it could be within two years to you on that.
But again well.
Well no income controlled we we very quickly canned and even though the antibody, but after that the the partner.
Yeah, and challenge and and see the twist to go is not something and weekend. We can influence a lot. Though however that is that's why we have not been free getting on one partner we've been free be seen on let's let's get as many buttons as weekend because then.
You maximize.
The the the speed at which one of them is going to go into into the clinic.
Okay, great. Thank you.
Thank you and I'll come and showing no further questions at this time on the turn the call back over to it and we have a problem for closing remarks.
Thank you the image and thank you all for joining yesterday, we remain and remain inspired by science and tweaks. We have an amazing team. There continues to be used is great and the company fourth and making bank corp to sort of and the world.
So please take good care of itself they save so trade expense and well ask thank you.
Ladies and gentlemen. This includes today's conference call. Thank you from participating you may now disconnect.
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