Q3 2021 Twist Bioscience Corp Earnings Call

[music].

Yes.

Yeah.

Welcome to twist Bioscience fiscal 2020, 1 third quarter Financial result conference call at this time, all participants on a listen only mode.

After the Speakers' presentation, there'll be a question and answer person.

To ask a question and at that time. Please press Star then 1 when you touched on and telephone.

As a reminder, today's conference call is being recorded.

I would now like turn the conference over to Angela and bidding.

VP of corporate affairs.

Thank you Valerie good morning, everyone I would like to thank all of you for joining us today for twist Biosciences Conference call to review, our fiscal 2020, 1 third quarter financial results and business progress. We did issue our financial results released this morning, which is available at our website at <unk> Dot twist Bioscience dotcom.

With me on today's call are Dr. Emily and the cruise 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 and Emily will come back to discuss our upcoming milestones and direction. We will then open the call for questions. As a reminder, this call is.

Being recorded the audio portion will be archived and the investors section of our website and will be available for 2 weeks. During today's presentation, we will be making forward looking statements within the meaning of the U S. Federal Securities laws forward looking statements generally relate to future events or future financial or operating performance.

Our expectations and beliefs regarding these matters may not materialize and actual results 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 our press release, we issued earlier today.

And as long as those more fully described in our financials and our filings with the Securities and Exchange Commission before looking statements and presentation are based on information available to us as of the date hereof and we cannot at this time predict the full extent for the impact of the COVID-19, pandemic and any resulting business or economic impact we just.

Claim any obligation to update any forward looking statements, except as required by law with that I'll now turn the call over to Chief Executive Officer, and cofounder and newly recruited.

Thank you Angela and good morning, everyone. We continued on previous people on to me to the third quarter of fiscal 2021, we bought and increase revenue across all businesses and will lead all day.

Moving into our final quarter of the year.

We remain focused on extending of gifts and obese and driving increased revenue day by day across these businesses, while I havent seen on D&A that the stores come out from.

Commercialization plans.

We reported record revenue of 7 and finally ended up for the quarter and an increase of 65 for yoga Ya.

For second quarter, and the rule with no single customer accounting for it seems if he can do some digital revenue and so again.

Indicate broad and diversified strength across all businesses and we will.

Reported $39.1 million and older.

This is an increase of 58 or something for the third quarter fiscal 2020 with strong signals for the remainder of fiscal 2020.1 posture on me.

Oh for sure.

Preschool and fourth quarter accruals, and still amongst which all flow for European interest.

Zooming out for bid to put into context, both our countries and.

And I'll show up on changes, we continue to believe in the promise of synthetic biology ecosystem of companies working on diverse applications have seen value provides not only validation of the industry today.

And for incredible opportunity for the future debt, we'd be setbacks within the industry and not.

And every application so it seems that it will work or we go and it was just growth.

However, we're railroad the science and the commercial application cool twist provides a synthetic DNA for the research and discovery and development as well as even production.

Essentially we provide the picks and shovels for August and knows what meaningful weighted on the final rule, we sell the tools that enable their success.

And always be and market for the picks and shovels.

Specifically for M SKU and we feel about it.

Every stage of the electrical system from diagnosis to treatment to civilians and prevention soon by you as a worldly new tests are available for a wide range.

And then we can use gene drives to eliminate most keto bowl and even though she's like malaria and dengue and gene editing can be used to treat specific diseases.

Impressively we.

And new says.

To me the box Judah cancer mutation and then write DNA to do either a tough on ice treatment and this is just the tip of the ice breaker for these possible by combining Sandeep and you would seek new energy between group and healthcare.

In addition to health care, and we'd see on growing customer base, especially and unique applications and a wide verity on industry and cleaning materials chemicals crude for me and more.

With a vision Acos and Guzman and we funded the company debt since it will.

And we'll change the world drive new industries and disrupt the existing market.

We are delivering on the promise of building, a robust and dynamic business with solid revenue growth quarter for the quarter.

No 2 driving to our results for the third quarter stuff and we've seen volume we reported record revenue of $14, 3 and along with orders coming in at $15.7 million.

And we shipped 107000 genes from the quarter as we continue to weeks on our customer base.

We're actively preparing for the opening of a factor of the future.

Early production expected in mid calendar 2022.

And as effective as a future comes online next year, we believe it will allow us to tap into new customers new desk, because it would be you need products day bankruptcy.

And important next revenue to come to get and make heroes into gear and they buy it.

Yeah.

Turning to genomics and targeted and G. S. We reported 18 concern me and developing and moving them.

For those were $18.6 million for the quarter.

We closed the acquisition of ice and the mix screening and multiplex library preparation tools for Ngls will flow into our fold.

We believe this acquisition will accelerate correlates on from student and Macquarie to twist course sequencing.

We are working to twist defied the product and expect tour and relaunch it before the end of the current value.

In addition, we don't just slipped out of the panel.

General and designed product that Leverages twist best in class DNA synthesis platform took a little over a million.

It can be used alone all 2 of them on our launch of eggs and panel.

This is an important time for twist with it provides and we feel true and.

This is Pete and neutral growth rather than a typical bias of day T bills on western European coverage.

We have taken multiple steps to mitigate the soup kitchen, and which we discussed last quarter, including the introduction of flow and sympathy from addiction, and 2 points or kit.

And all in 1 solution designed to maximize accuracy and efficiency and library construction and amplification and a nice addition to our portfolio.

We launched 4 new policies and they take and make them.

And for new volume of Covid, including Delta and kept on it's.

As you put it on to a continuous to evil and used for decline in Canada, and with new strength, we see that ourselves for controls on relatively constant over time. The sales of the controls introduced early independent and it has been replaced by new new controls.

For the need for volume.

Importantly, the energy and violence and execute it and kisses worldwide remind us that COVID-19 related public health crisis.

Likely to be the case for quite some time.

And we need to learn to live with Covid, which requires both diagnostic tools and I think these therapeutics that address a wide trends of volume.

And by and the lack of for White explanation and it's cool age population that is not eligible for vaccines next sugar and it's very important to meet those present and evolution of the virus.

For Biopharma, we reported $4.8 and ended up in orders and to me on the lots of moving.

It was a great quarter for Biopharma we.

We saw a continued increase and repeat business with many of our long standing partners.

As a reminder, all Biopharma revenue only includes a portion of the upfront license fees associated with our partnerships as we pointed out as revenue over the course of each project.

And you shouldn't orders there.

Directly comes at 1 to 1 and 2 revenue more.

Most often in the following 2 quarters, depending on the time line of the project.

Modern students on royalties represent additional potential financial upside and not get you to.

All revenue.

During the quarter, we signed several new partners for our twist antibody optimization solution that utilizes.

Utilizing fully human antibody sequences.

This collaboration and showcase our capabilities to improve the credit these are for box for that molecule.

As we expand our debt.

And with additional and examples of all successful partners, we see and increased interest in these particular outlet for them for both Humanization and affinity maturation.

We do not typically get milestones and royalties for these collaborations and yet we believe that could be very important as an entry to larger partnerships with pharma and biotech companies.

And regulatory reported net loss city, 1 partners and 43 active programs.

26 of which have milestones and royalties.

And in addition, 19 programs are complete and now in the hands of up on them.

In addition to the partner program, we continue to admin and selling telecom pumps generating additional preclinical data.

Concurrently we continue to pursue and many other news to expedite the path for twist antibodies to the clinic.

Moving to the courage and we continue to make solid progress as we drive towards commercialization working for proof of principle cheap at 1 micron pits.

We are building and integrated chip that includes both the Cmos and Mems components.

Moving to commercialize a product for the debt storage.

1 day integrated chip is working on the next step is to create and integrated out of necessity kinship neutralizing the feature size even for a though.

We expect that 1 deal for cheap right and a consistently these cheap who support our first early excess commercial offering.

And the target customers those with creative control and control every page and its media and then put them on organization.

The DNA data storage alliance is necessary for months strong.

Ladies and active web site and the group released its first white paper on the state of the storage injured.

And then monthly and are made.

And great progress and indicating the onshore storage community on the benefits of DNA and the storage market.

And this time I would like to turn the call over to Jim towards your finished what we thought for the quarter.

Alright, Thank you Emily.

And if I might and noted our results continued to demonstrate the advances we are making executing our business strategy and investing and our platform.

Revenue for the third quarter was 35 million and new retro for twist and up sequentially, 12% and year over year 65 per cent.

Orders were $39.1 million for the water and <unk>.

For the client, 6% and year over year increase of 58 per cent for.

Gross margin for the third quarter was 40%.

We shipped approximately 800 customers on the quarter and approximately 2600 customers and year to date and.

And we ended the quarter with cash and short term investments of approximately $519 million.

Now I will provide more details on the Argos as far as per quarter.

And yes orders for the third quarter were $18.6 million and that's comparable to the second fiscal quarter and a 113% higher year on year. This for quite some larger customer base, increasing adoption and increasing NGF applications, putting liquid biopsy diagnostics RNA controls and all.

And our applications clinical applications included.

During the quarter, we received orders from approximately 700 mgs customers and the top 10 accounts placed orders for approximately $7 million as compared to approximately <unk> 8 million for the top 10, and the previous quarter and.

Highlighting the continued diversification of our customer footprint and corpus 3.

Our pipeline for larger opportunities continues to scale and we're now tracking 182 accounts up from 170, we noted on our last earnings call and so.

Moving to 9 have adopted twist.

And an increase from 65 last quarter.

Turning to sym bio.

And by orders, which includes ginkgo genes G&A, perhaps ITG libraries, and all the good pools for $15.7 million and that's.

Third quarter up from $14.9 million and June 2020, and.

And sequentially, primarily due to declining industrial biotech partners.

And I have to Biopharma.

Biopharma orders on Corpus free for a record $4.8 million as we continued to build our pipeline of customers projects and opportunities and.

And as noted earlier, we now have 31 partners with for instance, reactive programs and 26 of which.

Have milestones and royalties.

Please note, we provide orders not to directly translate into revenue, but to provide a trend line for each product growth.

Now moving from orders to revenue as noted earlier revenue for the quarter was $35 million and brings our cumulative revenue for fourth Street Corp, 94, 4 million, which compares to $57.7 million for the same period in FY 'twenty, and that's approximately 6% to 4% year over year growth and.

<unk> products continue to scale and climbed to $18.7 million for the quarter as compared to $9.1 million and for the same corp from the prior year.

Year over year growth is more than doubled and was a sequential growth of 10%. This reflects expansion of our pipeline and increasing number of applications such as liquid biopsy.

Going up.

Our sym bio product revenue for the quarter was $14.3 million and that's up sequentially from $12.9 million last quarter and an increase from your live and point 8 million and quarter 3 FY 'twenty. Some of the highlights include shipping to approximately 17, <unk> hundred 7 and bio customers and quarter, 3 and Thats up from <unk> hundred and the <unk>.

This quarter.

For Q3 genes revenue was $11.2 million sequentially up from $9.2 million.

And up from $9.6 million and corporates free FY 'twenty.

We shipped a record number of genes and the quarter of approximately 107.

<unk> thousand and an increase from 19000 genes shipped from quarter 2.

Please note on the skin, who is net of less than 10% of our revenue we're no longer breaking out and can't go activity and this also highlights our growth and continued success and expanding our customer base.

Yeah.

Biopharma.

Our revenue for the quarter was approximately $2 million and upfront services on our antibody project activities.

Now I'll briefly cover our regional progress.

Our investments and building out our international commercial organization and capabilities as reflected in strong international growth this quarter.

Yeah, and another terrific quarter with Q3 revenue of $12.7 million versus $6.4 million in the same period last year and now accounts for 6% of our worldwide business.

APAC had a strong quarter as well Q3 revenue stream 1 million versus $1.2 million for the same period last year and.

And U S revenue was $19.2 million versus $13.6 million for the same period last year.

I'll now quickly give an update on our segment revenue all segments showed strong growth.

Health care, and our largest segment and accounts for approximately 50% of our business with revenue of $17.4 million and Q3 versus $8.5 million and Q3 fiscal 'twenty.

And that's reflecting strength and our Ngls industrial chemicals was $9.4 million and Cortez free.

Per to 7.5 million and Q3 FY 'twenty.

Academic revenue and Q3.

'twenty was $7.7 million versus $4.6 million and Q3, FY 'twenty and we.

He noted on the call last quarter academic that was continuing to recover.

And Chris I can touch on revenue was 0.5 million.

Now moving down the P&L, our gross margin for the quarter was approximately $14 million on 40% of revenue up from 39% from the prior quarter and up from 22% from fourth street of fiscal 'twenty.

Our operating expenses for the quarter, which includes R&D and SG&A was $54.2 million on.

Randy for the quarter was $19.8 million as compared to $10.4 million and the third quarter backed by 20, and $15.8 million and of course Corp..2 of FY 'twenty 1.

Over the last year, we have invested and our R&D resources and capabilities and our head count has increased to 189 from 125 and <unk>.

3 of our fiscal 'twenty, we're seeing the benefit of this investments and our product launches and our innovation and consequently, the major increase in spend was compensation and also I would say sovereigns is primarily our data storage technology and development activities.

It's worth highlighting that in Q3 FY 'twenty.

And this included $1.4 million of Frank reimbursement as compared to <unk> 3 million and Q3 FY 'twenty 1 both on netted against our R&D spend.

Just quickly on the sequential growth the increase in spend was primarily compensation and increase and I would say services of $2.3 million and that's for a data storage technology and development activities.

Our SG&A and Cogs stream of statute for $5 million as compared to debt to $4.3 million in quarter, 2 and towards $2.5 million and quite 3 FY 'twenty.

Year over year, SG&A expenses and increased by approximately $12 million due to higher compensation of approximately $7 million, which includes stock based comp.

<unk> $2.7 million and that's primarily associated with interest from basketball team to build out the commercial organization.

And the head times as interest and on commercial organization to 195, and that's up from 161 and Corp. G. FY 'twenty and this includes our expansion in both Asia and EMEA.

In addition, and the quarter, we incurred higher outside professional services approximately $3 million.

Due to audit and Sox fees as we've been continuing to invest and enhancing our control environment.

Also during the third quarter, we hired Kevin Yankton as our Chief Accounting Officer.

Evan and brings significant industry experience and depth of knowledge and technical accounting matters, and I'm thrilled to Kevin and his parts of our finance team.

Our loss from operations before interest and taxes for the quarter was $40.2 million, which includes stock based comp of $9.2 million and.

And $2.7 million depreciation.

Capex on the quarter is approximately $7 million, which brings total year to date capex to approximately $19 million.

And we concluded the quarter with cash and short term investments of approximately $519 million.

As Emily highlighted we closed our acquisition of genomics and June.

And this reflected on our balance sheet with additional intangible assets of approximately $17 million and the balance is goodwill offset by a deferred tax liability.

And April this year, we extended the lease of our Portland facility and started to retard the amortization lease payments total amount and the quarter was zero point $7 million and future quarterly expenses will be approximately $1 million for for lease payments.

I'll provide an update to our financial guidance for fiscal 'twenty 'twenty 1.

As Emily noted, we're seeing strong growth and our customer base.

From market growth and at the same time that remains and Samsung and associated on demand.

And we also are pushing at time of year, who has some seasonality in Europe.

As noted earlier Europe is now a larger part of our revenue.

However, we are increasing our revenue.

Guidance for the year and now expect revenue and the range of 129 to 132.

This is up from our prior guidance of $1.21 to 1 time line and we're estimating quarter for revenue and a range of 35 to $37.5 million.

And vital is estimated to be on the range of $54 million to $56 million and this comprehensive ginkgo revenue and.

And yes revenue is estimated to be in the range of 6% to 9% to 70 per million and Biopharma revenue is estimated to be approximately 6 months.

Our gross margin range for the year is expected to be between 38, and 40% as compared to a debt to 6% to 38% and net loss guidance.

Operating expenses, which includes R&D and SG&A and expect to be approximately $200 million, a year as compared to $192 million and our prior guidance and this reflects higher stock based comp charges rental expenses for the factory and future investments in R&D and sales and marketing organizations to support.

Growth in FY, 'twenty, 2 and beyond.

Our R&D investment for the year is approximately $17 million up from $66 million due to outside services, primarily associated with data storage.

Technology investments.

Our net loss guidance for the year and expect to be approximately $150 million as compared to 140 fortune $150 million and our previous guidance.

Stock based comp to be approximately 37 million and depreciation and expected to be $10 million.

And we anticipate capex to be approximately 40 million and from here.

In summary.

Like to thank all twisters for delivering another quarter of <unk>.

Record growth.

We're executing on our strategy and drawing broad demand from our customer base on.

New products and being well received and we're investing on our platform as we continue to tap into new bedroom streams for.

With that I will now turn the call back over to Emily.

Thank you, Jim and conclusion, we're continuing to build our business and our customer base and revenue stream. This quarter wherever we have accomplished a lot even more than envisioned at the beginning of the year in the midst of COVID-19.

As we are moving to the final quarter of our fiscal year, we expect to continue to take market share and volume growing more opinion and the market. While we prepare our factory of the future of approaching 2020 to position us to accelerate uncle.

And just stool frequency and to grow revenue and increase production as well as and number of larger accounts, we funneled into the pipeline and in addition, we plan to relaunch the IGN and make library prep kit to drive impact credit conversions moving into 2020.2.

For Biopharma, we intend to sign additional partnerships and that programs as well as pursue opportunities to participate and a greater share of wallet and rapid critical investment.

For the end of the storage.

We will drive 12 them out for a commercial product for me execute on our eye up by contract and HPV adverse market adoption of this new Jewish medium income.

Yeah.

With that let's open up the call for questions operator.

Thank you <unk>.

Wander to ask a question you would need to press Star then 1 of your telephone to withdraw your question. Please press the pound key please standby, while we compile the Q&A roster.

Our first question comes from the line of Doug Schenkel with Cowen. Your line is now open.

Good morning, everybody and thank you for taking my question.

And so on alumina is call last night and and.

And talking to them I think a little bit after the call they talked about a lot of progress they're seeing.

And with assay development and the industry combined with <unk>.

The fact that guidelines and the reimbursement environment coming out of the pandemic at least we hope coming out of the pandemic.

And is driving increased demand for sequencing consumables within the clinical and market, especially in oncology.

Based on your results and the quarter and what you talk about in terms of box backlog. It sure sounds like you're seeing the same thing and your business.

And I just wanted to make sure Thats, the case and and if so.

And we think about the implied fiscal Q4 guide.

Would you say the bias, especially when it comes to this part of the clinical business is for the upside and then by extension how should we be thinking about momentum as we start to look ahead to fiscal 'twenty 2.

Thanks, Doug and then maybe I'll start and and Jim can chemical and can continue.

As a reminder.

First of all I agree with what you say, we see something similar.

But that does do remind all day is kind of 2 stages.

When we work with gift and though in the clinical space. The first stage is and the development of the assay and so and that stage.

Cosmos, what many different panels should try to different content, and that's where frankly, we shine because we can make a panel very quickly and very cost effectively.

And then once the cause to mill as.

Finalized the content that we need and then we go into <unk>.

And more for scale up.

And where were the the revenues can rep and so.

And depending on where they all in there on assay development and validation and some cost and those are still early in the try and different content on and some customers are more are we in debt more skill diversion and.

And we are seeing strength in both areas.

Is there any chance you'd like to add.

Yeah.

So Doug Yeah.

Definitely a new area, where we're seeing strength for them.

And you look at the backlog of the large NCS customers, where we're tracking and how the pipeline.

We're now tracking and 182.

So yeah I would just look back and perspective, that's twice the number we're tracking approximately this time last year number of adopted adopting means twist is in.

Assignments and their assay.

M. That's net of increased to 7 to 9 a M.

And there's a cost of about 50. This time last year. So we're seeing momentum in the back and the pipeline.

Overall, we had another strong bookings quarter.

And number of larger accounts.

And increasing.

So all the signs are with and to a very strong momentum building up from this area.

And if you look at our guidance for the year for for MTS.

We've upped our guidance for GAAP.

And we.

We continue to have a very strong showing and we expect to see.

To continue to deliver.

From growth in India space.

Hello.

Yep. Thank you no that's really helpful.

Thanks for both of you for all that I mean, I think and importantly, right. There when you when you run through all of those metrics.

Jim I mean, there is not a single thing trending and the wrong directions, and I say that not to be a cheerleader I say that because if I'm thinking about the outlook for fiscal 'twenty..2 there's nothing you're seeing that would suggest the building momentum is going to flow.

And I don't know, what's what's interesting is you EBIT it looked at the breadth of coverage and the breadth of adoption tends to increase I mean, it has been lumpy and as we've scaled for the last 2 quarters and the top 10.

Accounted for roughly about 40% of our orders and that's a really good sign.

And that shows that the number of customers increasing the volumes. They are placing is also increasing.

Okay. That's great and then if I could ask I guess, if I could ask or actually just really talk a little bit more on about something else on the biopharma side, and specifically on cell lines and antibodies.

Libraries of libraries is a great capability.

But there does seem to be a movement towards increasingly sophisticated cell engineering efforts for antibody development and targeting.

Is there any change and how you feel about your positioning in this context.

And if so how does that impact existing and future partnership development efforts and of course embedded and this question.

Is is really just a question about how youre thinking about your efforts to increasingly advance internal sophistication and this context it would be great to hear about your thoughts on the competitive environment and your efforts.

Thank you Doug.

Again, I definitely agree with you or was it like 6 months at the market.

The great thing around 7 engineering.

As debt.

And you need.

A lot of DNA and news flow.

Good day.

Just on DNA in production and it should go to.

And mode where M.

Free patients get different engineered Phil.

Then day payload that needs to be made for each patient and so would that mean to us debt typically income by you.

Only proxy baked and the research and development and.

Typically we don't see baked into production because its once you have the 1.

And genetic material will be propagated by by amplification.

Instead engineering again every patient gets their own payload than weekend upstate and the production mode and so at that point.

And with the chance to meet new the R&D, but just would be crooks and so differently.

Debt debt that is on the opportunity for us, especially since we have we are of great interest.

GNC material payload production system.

The fifth thing with <unk>.

And I'm, saying and I'll say is around the fact that a buyer.

Biopharma team and he's kind of like the bleeding edge of science.

And we sell to our customers on the scientific.

Prowess our debt.

And that we have and.

And what that means is that Oh, maybe from a team gets.

And that's it dragged into cell engineering and theirs.

Very glad to be up to a sickle because.

The first 1 on a team creates a tool that debt debt.

So that gives from a problem.

And then that tuned to get M C.

M product ties and scaled up.

And then becomes it tuned the sym bio team sales and so for.

For instance, we've seen that with <unk> high throughput that new production. This was initially a capability that's all biopharma and pharma team develops on their own because they needed it.

And then when we feel that it could be applicable to many other cost and move we we prototype it's can be moved it into regular and bio production and now twist Biopharma is a customer of the tune and even thought they would.

The original developer all of it but then he can 1 gets to the mills and we can sell debt product too many casinos and I think something similar now.

Cool happened.

And as a sell engineering, where as how about from a team gets and.

Involved in that business tools are going and get deep look and and 1 of the great thing we do a twist.

Many scaleup.

And the industry alive and those 2 so I think we have those 2 good things go and clause 1 is moving with platform.

And 2 is we have a very from that.

They.

Applied science team that that debt is a great day will appeal to a future tools that drive future growth.

Okay. Thanks, again have a great weekend.

Thank you.

Thank you.

Next question comes from the line of Mac Sykes with Goldman Sachs. Your line is now open.

Hi, Good morning, Emily and Jim Angela and thanks for taking my questions kind of similar along the lines of Doug's question just on the on the on just business, Jimmy mentioned and 182 customers Youre tracking and 79 adapt to customers, but I was wondering if you could and more color on the on the mix between existing versus new customers, and what you're seeing and Ngls and maybe the.

Frequency and quantity, which they're ordering.

Yeah, and also the mix in terms of new customers don't break that out but the mix in terms of new customers over the last few years certainly expanded.

In terms of volume.

I think the.

That's very encouraging for us is the pipeline keeps increasing but also the bread and causes for Adrienne keeps increasing and you go back and maybe a year ago, it tended to be rather lumpy or the top 10 list, but 60% of the orders.

And a top 10 is a party.

Party for Central Lab.

So that's an encouraging sign.

The number that keep adopting increases is increasing as well.

No debt.

And line of adopted that's up from 65 last quarter.

And those are those assays are obviously.

Going into production.

So as we talked about earlier all the signs are positive we continue to see the overall pipeline increase and new applications such as liquid biopsy are starting to take off.

Well, we don't break that out.

B, we see a number of large liquid biopsy customers working with us.

And and certainly an exciting.

Product for us.

Great. Thanks for that color, Jim and then and then just on EMEA you had a good quarter and it sounds like momentum is building there or just maybe any any of the drivers that are.

And they're driving growth in that region for Amir.

Yeah, I mean, and we saw and bio is doing well, yes. It was interesting and as we had a record number of gene shipments jeans business doing well.

In terms of M. Yeah, we're seeing good strong and yes, we're seeing good strong since and buy orders, particularly on genes with pharma.

And unusual suspects for large pharma and Europe.

They come in with some larger arguments at the end of the March quarter.

So that would pick up and our revenue was interesting and book to bill and and survival and still above 1 for this quarter. So a good encouraging sign.

And as we and till the summer period.

We've got lots and strong momentum on the business.

Great. Thanks, I appreciate the color.

Okay.

Our next question comes from the line of Catherine Schulte with Baird. Your line is now open.

Hi, congrats on the corner and thanks for your questions is first last quarter. You mentioned you were experiencing some headwinds with a key supplier for Ngls.

And she has been resolved or are they still on that constraint.

Thank you Katharine for for the question.

We have made very good progress on debt on that front and we have launched additional kit that is actually on improved kits, which enables us to move mucus and those 222 debt to debt keeps a day.

Very little constraint for new customers.

For existing and kissed the mills and we've moved some existing cause sales to the new kit, which relieves some of the pressure. So that's completely out of the woods yet.

But and.

It seems like something new.

A great job to mitigate and and we anticipate that we would be able to get more material from a from a supplier.

On to accommodate the growth of more growth of existing cash.

So we will cautiously optimistic but that's M.

And they seem piece and team that we keep them.

And close watch on.

Okay, Great and then and how do you feel about your you're of course and bio pricing as we stand here today and is there a path to lowering price to unlock incremental demand or are the potential for dynamic pricing based on premium turnaround times.

And is essentially the latter our agenda.

And we're making a big investment and a in a factory of the future.

And Keith Bachman.

And what that does and so we give us a lot of new more capacity.

But the Oslo, and it's going to give us.

The opportunity to add attractive features to our products, including <unk> and so we believe that we will have the opportunity.

And 2 to.

And add more dynamic pricing well and they they there's a premium component available and.

And all our Cogs.

Oh, Yeah I'll Cook from you about the same that's what day.

And the definitive clinical community too.

Martin.

For the the fiction the segment.

Net debt will get first off peak.

Yeah.

Okay, great. Thank you.

Thank you.

Our next question comes from the line of Vijay Kumar with Evercore ISI. Your line is now open.

Hey, guys. Thanks for taking my question.

Maybe first 1 on.

The order trends here.

The it looks like semi orders were down sequentially is that just timing.

Sequentially flattish and G. S orders and I was curious I know last year. You know Q4, we had some timing elements. If there was something like timing element that happened and this quarter.

Hum.

Yeah, but what's interesting is the last quarter.

As noted on the orders for us and bile.

However, our and vessel biotech our customers' orders were down sequentially.

Also at the end of the March quarter, and we had a number of large orders from and <unk>.

<unk> pharma.

And that came in at the end of.

March so those.

And those orders Didnt come in and in June, but that's just a timing issue because on whereas it fell at the end of March.

In terms of and.

And yes.

And we continue to build on the Mcs business, we upped our revenue forecast, so we feel good and bad for them.

And by on the MTS and <unk>.

Although.

The orders are worth talking about the the highest.

I would highlight for last quarter was the highest June shipments over 107000 machines.

We've got a lot of momentum and jeans.

Number of spend by our customers and expanding.

Jean customers increased by about roughly 200 and shipped to almost 1200 gene customers. This last quarter.

And so we're seeing good good demand from buyers and by our customers and it was a little bit lumpy from the March to the June quarter.

Oh.

Understood and then Jim maybe 1 related on on the updated guidance here.

For the Q4 revenues.

You know the headline the optics and looks like its 10% growth year on year No I know last year you had the.

Pull forward of M Dias customer I think adjusting for that.

I'm getting to perhaps maybe in a mid thirties growth for Q4.

You know given.

And we've been tracking it's north of 60% growth year to date.

Any reason why on an underlying basis, except on 1 off orders that growth should flow slow down here in Q4.

The only other comment I would make is.

And we got we got a lot of momentum with Europe is now a larger part of our business. So it doesn't take that and to enter and we do also we're also because the impact for the pandemic.

If you do go back to revenue and this time last year. Our revenue in Q4 last year was 2 million $2.4 million.

If you take out.

For the 9 million for.

The Regeneron order.

And you can see there for that went down to $23 million.

So if you look at that versus our forecast.

And 35 to 7 and a half were up substantially.

And I mean, the line calibration and I'd say is that we're accommodating a higher and European revenue this year.

And they've got a broader customer base number of customers keep increasing and where we're looking at the potential impact on seasonal implications and Europe.

I think it's just a matter of working through the summer period and the impact on the the Delta there and right now.

Yeah.

Just to clarify Jim the bleach and Brian was that a.

6 or 9 and I thought for some reason I had a 6 as being above plan.

Yeah and going ahead.

So the overall regeneron with debt that was a $9 million on the quarter I was just clarifying how much regeneron last year.

So 3 would've come in last year correctly, 6 where they come in and this year. So I just think about it.

And that you're going for last night, and just to give you a frame of reference from Q4 of last year's Q4 this year.

Understood. Thanks, guys.

Okay.

Okay. Thank you.

Our next question comes from the line of Matt Larew with William Blair. Your line is now open.

Yeah, Hi, good morning on the Sim biocide number of customers and up about 30%.

And maybe just talk about where you're seeing the most interest from new customers and and maybe any of the impact from Covid.

And the recently launched products like DNA, perhaps funnel ready gene fragments agg.

And just kind of more color there.

Yeah. It was a strong quarter for jeans and strong business strong.

I had another strong quarter and go from the number of genes we shipped a 107000.

And I was a record for us for a person and bio.

Just take a look for the orders and.

Industrial chemicals was down sequentially.

And that was driven by and by 1 large customer, but overall and that.

And chemicals still.

It's still a very strong from business for us healthcare was strong on the quarter.

We saw a pickup and academic.

And although farmer went down sequentially that was due to a number of customers that had large orders standard.

For the March quarter.

And with strong pharma quarter for us and bio.

So our focus on the expanding customer base targeting large pharma is working on.

And you can see with rapid gene shipments this last quarter.

Okay, and then in terms of Biopharma partners and there's a big step up I think he's on the numbers 31 ear and you know it.

It seems like maybe you're seeing an inflection point. So just curious if there's anything to call out in terms of.

I'm, sorry, and network effect or the way that product's being received and the market.

Yeah, I think thanks for noticing it a coke up on things are number 1 a M.

And we get more and more paid projected net.

Good completion with more data that we can share and then.

And on the ninth mono and somebody who have more proof points and that definitely helps to get new business.

And there's a point that we have.

And the commercial team and so no we have we have boots on the ground and each region too.

Yeah, and and APAC so.

More people with great data.

Okay, and then speaking of data.

On the renewal.

And.

Sorry.

[laughter].

And I apologize I cut you off there.

Yeah, So what we're seeing repeat business and.

So and <unk>.

And the way you get the debt does the flywheel effect of the repeat business is almost for free and so you can compound that repeat business with new gift and though and and.

And so that's the reason and so on.

That's what we see.

Yes.

Okay, Great and then sorry for the last 1 was asking on the white paper that was out in.

In June and in terms of DNA data storage just curious.

If there's anybody feedback and reaction you've gotten from customers on perpetual partner and potential customers or potential partners.

And so I think the there's a on the potential partners and the Nobel if people our group's companies in the alliance is keeps growing.

M.

And I'm, losing track, but that means there's more and more.

Off note available.

And so that's 1 aspect of it.

Don't necessarily need partners and we.

We should be able to be self sufficient.

To the extent that partners accelerate we are pushing P M keeping.

Keeping all options open and.

And then wisdom to growth.

And those on and growing.

And and was the way they do as a first step.

I think.

The outcome that we're looking for is working which is there is more and more.

And.

M realization in the on the minds of August and Bill.

And the unit, the tester, which easily and D&S.

East coming and then sue the growing mindshare.

The debt debt.

And as if the storage and something to be on the new couch for so I think.

I think our strategy of.

And.

Being a leader and keeping that balance style starboard is M is working and I expect acceleration.

And again, but hum.

I think things are definitely going into the right direction.

Thanks, Amit.

Yeah.

Thank you.

Our last question comes from the line of Tycho Peterson with J P. Morgan. Your line is now open.

Hey, thanks.

I wanted to start with maybe at a higher level question just around the competitive environment. You know, there's a wave of companies you know better than us around.

Some are leveraging semiconductor summer leveraging and genetics, sometimes a decentralized bench top approach. So as you kind of look across the landscape.

Can you maybe just talk about how you think about competitive dynamics, how you think about pricing going forward to what degree maybe you're evaluating some of these technologies and that there might be helpful.

And and and customer stickiness as well I think this is a question we tend to get a lot too.

Yeah no. Thank you. Thank you Pekka for for the question and I think.

And we well and think.

And as the company and in our in the height. They killed on so I think we have and it helps you those are spot on I know you all Philips consumable for milk from extra debt that we don't Miss anything so from that point of view we on this.

And actually a student of the market and and.

And we we look very carefully.

And.

As you pointed out the different ways to slice and dice 1 wave is from.

Centralized versus decentralized on and and <unk>.

And as a company that's sitting now with codec.

And decentralized Oh, Phil frankly, we never see them and the market. So.

I think there's for me, there's plenty of fish into what others can and plenty of needs.

And I'm sure, there's a need for a centralized approach, but we.

And we don't we don't see at all impacting.

And our customer base are.

Cause from a bad thing and they're sitting in AR and the high throughput and the dynamic throughput and then in the low cost low cost.

And although aspect of it is and I think synthesis and I think we've said in the past debt okay.

Oh Gee is compatible with our with the enzymatic synthesis and.

And when it's it's better.

And thank all of those methods there and then it'll be cheaper and so I think we'll always add the cost.

Cost advantage.

And.

And so we were centered and market, but at this point.

We don't see it continue to be for sure and then 'twenty, we're focused on executing what we are doing.

I think it's ours to lose and we have a huge knows and I'll hand.

And and our investments in effect on the future is the Q1 for us to shoot for growth and move on Investor.

The next stage.

Okay. That's helpful and then thinking a little bit on the on the near term, we get a number of investor questions around just to Covid opportunity I know you're launching the RNA reference controls and so you're able to just kind of think about how you're sizing that opportunity and in the near term.

And so we've said that it for the non material so.

Less than 10 per cent for revenues.

But you know it's great revenue, we love it and it's amazing bombs and and.

We keep launching R&D controls 1 because it's useful to the to the 2.2.

And the scientist and and the health care system that they do testing and that's what we've seen is frankly, the the revenues of our early controls.

And by and large these appeal to them.

Net revenues from the new control of us.

And I forget the momentum and so it's a pretty stable.

And a revenue stream for us again nothing material, but.

And I'm very glad that we have at both hold the contribution we would provide and and the revenues it did bring.

We have also opportunities as you know well antibodies, we we've we contribute to the development of antibodies and I think.

And.

And as cookies going to be with us for a long time and I think there is opportunity for in this and the therapy area, where there will always be people that on those vaccinated and debt that need them.

Oh and therapies, and then they'll always be be antibodies that are needed for for testing. So we keep pushing on the diagnostic and therapy.

Excuses.

As well as we think wherever opportunity too to out license some of the antibodies that we have from.

Okay. That's helpful and lastly, maybe 2 quick ones unrelated, but I'll put them together and the interest of time and genomics deal can you just talk a little bit about what that brings to the Ngls.

Work flow for you guys and then separately on the factory and the future I'm wondering to what degree you can start to kind of pre sell some of that capacity ahead of that comes on line.

Thanks, So on.

And that makes them.

And as you know we put the target that we want to convert the St micro and market into sequencing.

We think we have a unique solution there.

The proof points that it is placebo and original Iran would not have moved.

And if it wasn't a cheaper to use a M. G S. At the same time.

And so the proof point these debt it is cheaper and sometime we recognize that the that day.

And there's some bias to switching 1 is the content, which contains do I use cause with twist. It can be any snakes, you want which can be dumping and so and that's the area. We have lessened and so the original content available for FID and then just sick on friction to switching is it.

Our own automation and being able to process thousands of samples a day.

And as you know the languish and there's a process of doing a.

Shearing and and and repay on prenatal and litigation and it's a very heavy process to automate we usually IGN and process, we have a PCR workflow and.

So that is debt next year automation and I don't see a trivial, but a lot easier and.

So what what Jimmy and brings us is a.

And a very easy to automate workflow, that's based on PCL, which will help us and that Smith micro reconversion and.

And then on on your on your second comment on pre selling Oh, and the fact that if you took a pause and I'll say probably not.

And we know we know that the demand is there but.

And it should be a scene Bayou.

And bio product line and.

So and that proclaimed people and they give us a sequence that they want to DNA now and so there's not there's not good for the preceding to be done them, but at the same time, it's not a let's build it and they will come and we are pretty well pretty certain debt, though there's a demand for it to 1 not too concerned.

But dimension Irish and once we kept the CPE sales.

Okay. Thank you that's helpful.

Thank you and thank you there.

And there are no further questions at this time I would now turn the call back to the Doctor and the provision.

For closing remarks.

Thank you very much and.

Thank you for joining us today, we all as you know a twist, we're bridging the promise of synthetic biology, and genomics with the reality of building and exciting business.

And we maintain our momentum moving into the remainder of the year, we have the team in place to foster innovation and we hold ourselves accountable to execute aggressively moving.

And to sharing our progress with new in the months ahead and stuff and.

This concludes today's call. Thank you very much.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

[music].

Hum.

[music].

[music].

Welcome to twist Bioscience fiscal 2020, 1 third quarter Financial result conference call at this time, all participants on a listen only mode.

After the Speakers' presentation, there'll be a question and answer session.

To ask a question on at that time. Please press Star then 1 on you touched on the telephone.

As a lot of today's conference call is being recorded.

I would now like to turn the conference over to Angela and bidding.

VP of corporate affairs.

Thank you Valerie good morning, everyone I would like to thank all of you for joining us today for twist Biosciences Conference call to review, our fiscal 2021 third quarter financial results and business progress. We did issue our financial results released this morning, which is available at our website at <unk> Dot Dot dot twist Bioscience dotcom.

With me on today's call are Doctor and molecular proof 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 and Emily will come back to discuss our upcoming milestones and direction well then open the call for questions.

A reminder, this call is being recorded the audio portion will be archived and the investors section of our website and will be available for 2 weeks. During today's presentation, we will be making forward looking statements within the meaning of the U S. Federal Securities laws forward looking statements generally relate to future events or future financial or operating performance.

Our expectations and beliefs regarding these matters may not materialize and actual results 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 our press release, we issued earlier today.

And as long as those more fully described in our financials and our filings with the Securities and Exchange Commission before looking statements and presentation are based on information available to us as of the date hereof and we cannot at this time and predict the full extent for the impact of the COVID-19, pandemic and any resulting business or economic impact we just.

Claim any obligation to update any forward looking statements, except as required by law with that I'll now turn the call over to Chief Executive Officer, and co founder and believe a cruise.

Thank you Angela and good morning, everyone. We continued our provision please move on to me to the third quarter of fiscal 2021, we bought and increase revenue across our businesses and somebody.

Sales moving into our final quarter of the year.

We remain focused on extending our gift and obese and driving increased revenue day by day across these businesses, while advent Seattle DNA that the stores come out from Covid.

And the simplex.

We reported record revenue of 7 and finally ended up for the quarter and an increase of 65 Yoga you close second quarter and the role we have no single customer on accompanying for things. He can put some data for our revenue.

And indicate broad and diversified strength across all businesses.

And when we reported $39.1 million in older.

And this is an increase of 58 per cent to go the third quarter fiscal 2020 is strong senior and for the remainder of fiscal 2021 posture on me.

Hello, Scott.

So preschool and fourth quarter coils, and still amongst which all flow for European interest.

And assuming out a bit to put into context, both on the countries.

And obviously a joke alternatives, we continue to believe in the promise of synthetic biology.

And as he standard of companies working on diversification of same value provides not only validation of the industry today, because it's good for incredible opportunity for the future there will be setbacks and the industry and not every application. So Cynthia wheelwork always on edge with Justice, However, wherever and on the science and the commercial application cool.

Twist provided the synthetic DNA for the research and discovery and development as well as even production.

Essentially we provide the picks and shovels for August and those who are using pogo weighted on the defined goal, we send the tools that enable their success.

Always be the market flow picks and shovels.

Specifically for M scale, we feel rich opportunities.

Every stage of the electrical system from diagnosis to treatment and civilians.

And prevention and Baidu as a whole to place new.

And tests are available for a wide range of each and every day.

We can use gene drives to eliminate most keto bowl and the index is like malaria and dengue and gene editing can be used to treat specific diseases.

Relatively weak and new says you need to read a box Judah cancer mutation and then write DNA.

2 the need to personalize treatment and this is just the tip of the iceberg before it is possible by combining sandeep and you would seek new energy to improve health care.

Listen to M scan and we'd see a growing interest from a base, especially and unique applications and a wide variety of industries and cleaning materials chemicals, food and farming and more.

With a vision 8 years ago, and when we funded the company that's centered on a well.

Change the world driving industries and disrupt the English market.

We are delivering on the promise, but building a robust and dynamic business with solid revenue growth quarter for the quarter.

No 2 driving to our results for the third quarter stuff and we've seen volume we reported record revenue of $14.3 million and along with all else coming in at $15.7 million.

We shipped 107000 genes from the quarter as we continue to weeks and I'll give some of it.

And activity preparing for the opening of our factory of the future.

Early production expected in mid calendar 2022.

And it was effective for the future comes on line next year, we believe it will allow us to tap into new interest in them when and death.

Products day bankruptcy.

And important next revenue to come to you and make it into gear and they buy it.

Turning to genomics and targeted and yes, we reported 18 concern and we ended up getting revenue on.

And those were 8 and politics.

For the quarter.

We closed the acquisition of <unk> and the mix, bringing multiplex library preparation tools for Ngls will flow into our fold.

We believe this acquisition and we'd accelerate Congress on from Smith micro and to twist for sequencing.

We're working to twist decided the product and expect to launch relaunch it before the end of the carrying value.

In addition, we launched a snow day panel.

From design product that Leverages twist based on closing and accepted as collateral to cover all the opinions and that's it.

It can be used alone all 2 of them on our launch of eggs and panel.

And as an important tenant for twist it provides and we feel true and.

At least neutral Goldstein, though rather than the typical buyers of 80% Western European coverage.

We have taken multiple steps to mitigate the soup kitchen and risk we discussed last quarter income.

And then the introduction of floor and sympathy from addiction, and 2 points or kit.

And all in 1 solution designed to maximize accuracy and efficiency in library construction and amplification and a nice addition to our portfolio.

We launched 4 new positive synthetic on rate.

Controls for new volume of Covid, including Delta and kept on Egypt.

And as you put on to a continuous to evolve and used for decline in Canada and with new strength, we see that ourselves for controls on relatively constant over time. The sales of the controls introduced early independent and it has been replaced by new new controls.

And it is volume.

Importantly, the analysis and violence and execute it and kisses worldwide remind us that COVID-19 related public health crisis.

And I seem to be the case for quite some time.

And we need to learn to live with Covid, which requires both diagnostic tools and I think these therapeutics debt.

Addresses a wide trends of volume.

Science, the lockup for wipe explanation and it's cool age population that is not eligible for vaccines mix as children and a very important tool to meet those credit and evolution of the virus.

So biopharma, we reported $4.8 and ended up in orders and to me and then up and really this was a great quarter for Biopharma we.

We saw a continued increase and repeat business with many of our longstanding partners.

As a reminder, our biopharma revenue only includes a portion of the upfront license fees associated with our partnerships as we refinance revenue over the course of each project.

Listen I'll do.

Directly correlate 1 to 1 and 2 revenue.

Most often in the following 2 quarters, depending on the time line of the projects.

And students for royalties represent additional potential financial upside and I'm not good at all.

Revenue.

During the quarter, we signed several new partners for our twist antibody optimization solution that.

Utilizing fully human antibody sequences.

This collaboration and showcase our capabilities to improve equates either for box did on money too.

As we expand our debt the package with additional on examples of our success with partners, we see and increasing interest in these particular on platform for both you and aviation and affinity maturation.

We do not typically get milestones and royalties for these collaborations and yet we believe that could be very important as an entry to larger partnerships with pharma and biotech companies.

And I'm very glad to report that we now are certainly 1 partners and 43 active programs.

6 of which have milestones and royalties.

In.

In addition, 19 programs are complete and now and he has a for a partner.

In addition to the partner program, we continue to advance our internal compounds and generating additional preclinical data.

Concurrently we continue to pursue and many other news to expedite the path for twist antibodies to which the clinic.

Moving to debt as storage and we continue to make solid progress as we drive towards commercialization working the proof of principle cheap at 1 micron and pitch.

We are building and integrated chip that includes both the Cmos and Mems components needed to commercialize a product for the debt storage.

1 is the integrated chip is working on next step is to create an integrated and such.

For the can chip and that's raising the feature size even further.

We expect that 1 day outside cheap rights and they consistently these cheap who support our early access commercial offering.

And the target system as we build we preserve control and control every page as well as new yeah.

And then took on the organization.

The DNA of the stores alliance is necessary for them on the strong days and active websites and the group really it's a white paper on the straight debt.

For storage injured.

The new monthly and are making great progress and indicating the launch of Jewish community on the benefits of DNA as a storage medium for these.

I'd like to turn the call over to Jim towards your finished what we thought for the quarter.

Alright, Thank you Emily.

And as I might have noted our results continues to demonstrate the advances we are making executing our business strategy and investing and our platform.

Revenue for the third quarter was $35 million, a new record for twist and up sequentially, 12% and new.

Year over year or 65%.

Orders were $79.1 million for the quarter, a sequential decline of 6% and year over year increase of 58%.

Gross margin for the third quarter was 40%.

We shipped to approximately 800 customers on the quarter.

<unk> 2600 customers and year to date and.

We ended the quarter with cash and short term investments of approximately $519 million.

Now I will provide more details on the orders for our third quarter.

<unk> for the third quarter were $18.6 million and that's comparable to the second fiscal quarter and a 1.

113% higher year on year this for quite some larger customer base, increasing adoption and increasing NGF applications, putting liquid biopsy diagnostics RNA control and other applications clinical applications included.

During the quarter, we received orders from approximately 700 mgs customers and the top 10 accounts placed orders for approximately $7 million as compared to approximately $8 million for the top 10, and the previous quarter and.

Highlighting the continued diversification of our customer footprint and corpus 3.

Our pipeline for larger opportunities continues to scale and we're now tracking 182 accounts up from 117, we noted on our last earnings call and so.

<unk> thousand 9 have adopted twist.

And an increase from 65 last quarter.

I'm trying to send and bio.

And by orders, which includes ginkgo genes.

G&A, perhaps ITG libraries, and all the goals for $15.7 million and that's.

And third quarter up from $14.9 million and June 2020, and.

And sequentially, primarily due to declining industrial biotech partners.

And to Biopharma.

Biopharma orders on quarters free for a record for $8 million as we continued to build our pipeline of customers projects and opportunities.

As noted earlier, we now have definitely on partners with for instance, reactive programs and 26 of which.

Have milestones and royalties.

Please note, we provide orders not to directly translate into revenue, but to provide a trend line for each product growth.

And then moving from orders to revenue as noted earlier revenues for the quarter was $35 million and brings our cumulative revenue for fourth Street Corp, 94.4 million, which compares to $57.7 million for the same period and FY 'twenty and that's approximately 6% to 4% year over year growth and.

<unk> products continue to scale and climbed to $18.7 million for the quarter as compared to $9.1 million for the same corp from the prior year.

Year over year growth has more than doubled and was a sequential growth of 10%. This reflects expansion of our pipeline and increasing number of applications such as liquid biopsy.

Our sym bio product revenue for the quarter was $14.3 million and that's up sequentially from $12.9 million last quarter and <unk>.

Free from you live and point 8 million and quarter 3 FY 'twenty.

And the highlights include shipping to approximately 17, <unk> hundred 7 and bio customers and quarter, 3 and that's up from <unk> hundred and the previous quarter.

Our Q3 genes revenue and it was <unk> 2 million sequentially up from $9.2 million.

And up from $9.6 million and corporate <unk> FY 'twenty.

We shipped a record number of genes and the quarter of approximately 107.

<unk> thousand and an increase from 90000 genes shipped from quarter 2.

Please note. It is ginkgo was net of less than 10 percentage of our revenue we're no longer breaking out activity and this also highlights on growth and continued success and expanding our customer base.

Yeah.

Biopharma.

Revenue for the quarter was approximately $2 million and upfront services on our antibody project activities.

Now I'll briefly cover our original progress.

Our investments and building out our international commercial organization and capabilities as reflected in strong international growth. This quarter EMEA had another terrific quarter with Q3 revenue of $12.7 million versus 6.4 million for same period last year and no transfer 36% of our worldwide business.

APAC had a strong quarter as well Q3 revenue $3.1 million versus $1.2 million for the same period last year and.

And U S revenue was $19.2 million versus $13.6 million for the same period last year.

I will now quickly give an update on our segment revenue and all segments showed strong growth.

Health care, and our largest segment and accounts for approximately 50% of our business with revenue of $17.4 million and Q3 versus $8.5 million and Q3 fiscal 'twenty.

And thats, reflecting strength and our Ngls industrial chemicals was $9.4 million in quarters, 3 and <unk>.

Per to 7.5 million and Q3 FY 'twenty.

Academic revenue and Q3.

<unk> was $7.7 million versus $4.6 million and Q3 FY 'twenty.

On the call last quarter academic that was good.

And to recover our interest and I can touch on revenue was zero point $5 million.

And moving down the P&L, our gross margin for the quarter was approximately $14 million on 40% of revenue up from 39% from the prior quarter and up from 22% from fourth street of fiscal 'twenty.

Our operating expenses for the quarter, which includes R&D and SG&A and was $54.2 million on.

For the quarter was $19.8 million as compared to $10.4 million and third quarter backed by 20, and $15.8 million Corp quarter 2 of FY 'twenty 1.

Over the last year, we have invested and our R&D resources and capabilities and our head count has increased to 189 from 125 and <unk>.

3 of it and fiscal 'twenty, we're seeing the benefit of this investments and our product launches under on innovation and consequently, the major increase in spend was compensation and also I would say services is primarily our data storage technology and development activities.

It's worth highlighting and in Q3 FY 'twenty.

This included $1.4 million of Frank reimbursement as compared to <unk> 3 million and Q3 FY 'twenty..1 also netted against our R&D spend.

Just quickly on the sequential growth the increase in spend was primarily compensation and increase and I would say services of $2.3 million and that's for a data storage technology and development activities.

Our SG&A and Corp stream and start to $4.5 million as compared to debt to $4.3 million in quarter 2 and.

So it's $2.5 million and core 3 FY 'twenty.

Year over year, SG&A expenses increased by approximately $12 million due to higher compensation of approximately $7 million, which includes stock based comp of approximately $2.7 million and that's primarily associated with increased investments and plan to build out the commercial organization.

And the head times and has increased and on commercial organization to 195, and Thats up from 161 and parts of the FY 'twenty and this includes our expansion in both Asia and EMEA.

In addition, and the quarter, we incurred higher outside professional services of approximately $3 million.

Due to audit and Sox fees as we've been continuing to invest and enhancing our control environment.

Also during the third quarter, we hired Kevin Yankton as our Chief Accounting Officer.

Kevin and brings significant industry experience and depth of knowledge and technical accounting matters and I'm thrilled to have Kevin as parts of our finance team.

Our loss from operations before interest and taxes for the quarter was $40.2 million, which includes stock based comp of $9.2 million and 2.

And $2.7 million depreciation.

Capex on the quarter is approximately $7 billion, which brings total year to date and capex to approximately $19 million and.

We concluded the quarter with cash and short term investments and approximately $519 million.

As Emily highlighted we closed our acquisition of genomics and June.

And this reflected on our balance sheet with additional intangible assets of approximately $17 million and the balance is goodwill offset by a deferred tax liability.

And April this year, and we extended the lease of our Portland facility and stuff.

Hard to retard, the amortization lease payments total amount and the quarter was zero point $7 million and future quarterly expenses will be approximately $1 million for for lease payments.

I'll provide an update.

Our financial guidance for fiscal 'twenty 'twenty 1.

And as Emily noted, we're seeing strong growth and our customer base and strong market growth and at the same time and remains inception and associated pandemic.

And we also are pushing and time of year, who got seasonality in Europe as new.

It's a day earlier Europe is now a larger part of our revenue.

However, we are increasing our revenue guidance for the year and I expect revenue and the range of 102009 to 132.

This is up from our prior guidance of $1.21 to 129, and we're estimating quarter for revenue and a range of 35 to debt to $7.5 million.

So and vital is estimated to be and a range of $54 million to $56 million and this comprehensive ginkgo revenue.

And yes revenue is estimated to be in the range of $69 million to $70 million and.

And Biopharma revenue is estimated to be approximately 6 million.

Our gross margin range for the year is expected to be between 38, and 40% as compared to debt of 6% to 38% and our last guidance.

Operating expenses, which includes R&D and SG&A and expect to be approximately 200 minutes, a year as compared to $192 million and our prior guidance and this reflects higher stock based comp charges and rental expenses for the factory and future investments in R&D and sales and marketing organizations to support.

Growth in FY, 'twenty, 2 and beyond.

Our R&D investment for the year is approximately $17 million up from $66 million due to outside services, primarily associated with data storage.

Technology investments.

Our net loss guidance for the year and expect to be approximately $150 million as compared to 140 fortune $150 million and previous guidance.

Stock based comp this credit to be approximately 37 million and depreciation and expect to be 10 million and.

And we anticipate capex to be approximately 40 million for the year.

In summary, we'd like to thank all twisters for delivering another quarter of record growth for.

Executing on our strategy and.

Enjoying broad demand from our customer base on new products are being well received and we're investing on our platform as we continue to tap into new revenue streams for that I will now turn the call back over to Emily.

Thank you, Jim and conclusion, we're continuing to build our business.

Based on our revenue stream this quarter wherever we have accomplished a lot even more than entities and at the beginning of the year in the midst of COVID-19.

Moving to the fourth quarter for fiscal year <unk>.

They continue to take market share and volume growth more opinion and the market. While we prepare on Friday of the future appropriately and 2020 to position us to accelerate the uncle called and just stool frequency and to grow revenue and increase production as well as and number of large accounts, we funnel into the pipeline.

And we plan to relaunch, the IGN and recovery and prep kit to drive some impact for conversions moving into 2020.2.

For Biopharma, we intend to sign additional partnerships and that programs as well and still see opportunities to participate and the great to share wallet and rapid critical investment for.

And is that the storage.

And we'll drive 12 and alpha commercial product offering.

We get on a per contract and actively edmunds for market adoption of this new storage medium income too.

Debt, let's open up the call for questions for Perrigo.

Thank you as a reminder to ask a question you will need to press Star then 1 of your telephone to withdraw your question. Please press the pound key.

And as standby, while we compile the Q&A roster.

Our first question comes from the line of Doug Schenkel with Cowen. Your line is now open.

Good morning, everybody and thank you for taking my question.

And so on alumina is call last night and and <unk>.

Talking to them I think a little bit after the call they talked about a lot of progress they're seeing.

With assay development and the industry combined with the.

The fact that guidelines and the reimbursement environment coming out of the pandemic at least we hope coming out of the pandemic.

And is driving increased demand for sequencing consumables within the clinical and market, especially in oncology.

Based on your results and the quarter and what you talked about in terms of box backlog. It sure sounds like Youre seeing the same thing in your business.

And I just wanted to make sure that's the case and if so you know as we.

Think about that.

The implied fiscal Q4 guide.

Would you say the bias, especially when it comes to this part of the clinical business is for the upside and then by extension how should we be thinking about momentum as we start to look ahead to fiscal 'twenty 2.

Thanks, Doug and then maybe I'll start and and Jim can and cannot continue so as a reminder, so first of all our debt to pay agree with what you say, we see something similar.

But that does do remind all day is kind of 2 stages.

When we work with gift and though in the clinical space. The first stage is in the development of the assay and.

So and that stage.

Cause for most what many different Paolo should try to different content, and that's where frankly, we shine because we can make a panel very quickly and very cost effectively.

And then once the cause to mill as.

Finalized new content that we need then we go into it.

And more for scale up.

And where were the the revenues can ramp and so.

And depending on where they all in and their assay development and validation and some kissed and those are still early in the try and different content on and some customers are more are we in the more skilled erosion and.

And we are seeing strength in both areas.

Is there any chance you you'd like to add.

Yeah.

Doug Yeah, that's definitely a new area, we're seeing strength and if you.

Look at the backlog of the large ngls customers, where we're tracking and how the pipeline.

We're now tracking and 182.

So you know I would just look back and perspective, that's less twice a number we're tracking approximately this time last year.

And I have adopted adopted means twisters and.

Assignments and their assay.

That's now increased to 79.

And I mean as a COO.

Cost about 50 this time last year, so we're seeing momentum and the bank and the pipeline.

Overall, we had another strong bookings quarter and.

And number of larger accounts.

And increasing.

So all the signs are with and to a very strong momentum building up from this area.

And if you look at the guidance for the year for for MTS.

We've upped our guidance again.

And we.

We continue to have a very strong showing and.

We expect to to continue to deliver strong growth on the NGL space.

Yeah.

Hello.

Yep. Thank you know that's on realized gains from it.

Yeah. Thanks, Thanks for both of you for all that I mean, I think and importantly, right. There when you when you run through all of those metrics. Jim I mean, there is not a single thing trending and the wrong directions, and I say that not to be a cheerleader I say that because if I'm thinking about the outlook for fiscal 'twenty..2 there's nothing you're seeing that would suggest the building momentum is going to flow.

And <unk>.

And no 1 wants.

What's interesting is you EBIT and looked at the breadth of coverage.

Adoption tends to increase.

And it has been lumpy as we've scaled for the last 2 quarters and the top 10.

And 2 are roughly about 40% of our orders and that's a really good sign.

That shows that.

Number of customers increasing the volumes. They are placing is also increasing.

Okay. That's great and then if I could ask I guess, if I could ask correctly and just really talk a little bit more on about something else on the biopharma side, and specifically on cell lines and antibodies libraries of libraries is a great capability.

But there does seem to be a movement towards increasingly sophisticated cell engineering efforts for antibody development and targeting.

Is there any change and how you feel about your positioning in this context.

So how does that impact existing and future partnership development efforts and of course embedded and this question.

It is really just a question about how youre thinking about your efforts to increasingly advance internal sophistication and this context would be great to hear about your thoughts on the competitive environment and on your efforts.

Thank you Doug.

And again I definitely agree with you.

For the market.

And the great thing on around 7 engineering.

As debt.

You need.

A lot of DNA and news flow.

And then.

Kiss from DNA in production and it should go to.

And mode, where every patient gets a different engineered Phil.

And then day payload that needs to be made for each patient and so would that mean to us debt 2 P Kelley and tuned by you.

We only Pepsi baked and the research and development and <unk>.

And we don't participate into production because its once you have the 1.

Genetic material.

Propagated by by amplification.

Instead of engineering again every patient gets their own payload than weekends upstate and the production mode and for that point, we haven't had the chance to and not immediately.

R&D, but just to be correct from school differently.

Net debt that is on the opportunity for us, especially since we have a great just on.

Genetic material payload production system.

And I think the first thing the thing I was saying.

And I'll say is around the fact that.

Biopharma team and he's kind of like the bleeding edge of science and.

And we sell to our customers on the scientific.

Prowess that we have.

And what that means is that Oh, maybe from a team gets.

That's it dragged into cell engineering and theirs.

On a very great virtuous circle because.

The biopharma team creates a tool that debt debt.

So that gives from a problem.

And then that tuned to get I'll say.

M product ties and scaled up.

And then becomes it tuna and bio team sales and so for instance, we've seen that with <unk> high throughput and production. This was initially a capability that our biopharma on the team develops on the on because they needed it.

And then when we say it could be applicable to many other customers. We are we prototype it can be moved it into regular and bio production and now twist Biopharma is a customer of the tool even thought they were.

Original develop all of it but then we can 1 just the mills and we can sell debt product too many customers and I think something similar.

Cool happened.

As I sit and engineering, well as although from a team gets and.

Volt and that business tools are going and get people look and and 1 of the great thing with a twist.

Really scale up.

Industrialize those 2 so I think we have those 2 good things going for us.

We have a great platform.

And 2 is we have a biopharma and most day.

Applied science team that debt is a grid developed sales of future tools that drive future growth.

Okay. Thanks, again and have a great weekend.

Thank you.

Thank you.

Next question comes from the line of Mac Sykes with Goldman Sachs. Your line is now open.

Hi, Good morning, Emily and Jim Angela and thanks for taking my questions kind of somewhere along the lines of Doug's question just on the on the on Jeff's business, Jimmy mentioned, and a 182 customers Youre tracking and 79 adopter customers, but I was wondering if you can any more color on the on the mix between existing versus new customers and what youre seeing and Ngls and maybe the.

Frequency and quantity, which they're ordering.

Yeah, and also the mix in terms of new customers don't break that out but the mix in terms of new customers for the last year has certainly expanded.

In terms of volume.

I think the.

Thing that was very encouraging for us is the pipeline keeps increasing but also the breadth of the covers for Adrienne keeps increasing and.

And if you go back and maybe a year ago, it tended to be rather lumpy or the top 10 list, but 60% of the orders.

And the top 10 as a spike.

40% or less.

So that's an encouraging sign.

The number that keep adopting increases is increasing as well.

No debt.

And line of a doctor that's up from 65 last quarter.

And those are those assays are obviously.

Going into production.

So as we talk.

Talked about earlier all the signs are positive.

Continuing to see the overall pipeline increase.

And the new applications, such as liquid biopsy.

Starting to take off.

And we don't break that out.

We see a number of large liquid biopsy customers working with us.

And it's certainly an exciting.

And for Us.

Great. Thanks for that color, Jim and then and then just on EMEA you had a good quarter and it sounds like momentum is building there.

And maybe any any of the drivers that are.

They're driving growth in that region for EMEA.

Yeah, I mean, and we saw and bio is doing well.

What's interesting is we had a record number of gene shipments jeans business doing well.

And in terms of EMEA, we're seeing good strong Ngls, we're seeing good strong since and buy orders particular and genes with pharma.

And the usual suspects of large pharma and Europe they.

They come in with some larger orders at the end of the March quarter.

And so that would pick up and our revenue was interesting and book to Bill and.

And so and vital and still above 1 for this quarter. So.

Good and encouraging sign.

And as we actually the summer period.

But we've got lots and strong momentum on the business.

Great. Thanks, I appreciate the color.

Okay.

Our next question comes from the line of Catherine Schulte with Baird. Your line is now open.

Hi, congrats on the quarter and thanks for your questions and first last quarter. You mentioned you were experiencing some headwinds with a key supplier for Ngls have those issues been resolved or are they still have that constraint.

Thank you Catherine and for the question.

And we weren't very good progress on on debt on that front and.

We have launched additional kit that is actually on improved kits, which enables us to move mucus and those 222 debt to debt kids a day.

Very little constrained for new customers.

And for existing customers as we've moved some existing customers to the new kit, which relieves some of the pressure. So that's completely out of the day.

Yes, but and.

It seems like on there.

A great job to mitigate and zone and we anticipate that we would be able to get more material from a from a supplier.

To accommodate the growth of MAU growth of existing customers. So we are cautiously optimistic but that's.

The <unk> piece and teams that we keep them.

Close watch on.

Okay, Great and then and how do you feel about your course and bio pricing as we stand here today and is there a path to lowering price to unlock incremental demand or is it potential for dynamic pricing based on premium turnaround times.

And is essentially the latter agenda.

And we're making a big investment and the effects of the future.

And Keith Bachman.

And what that does is give.

And give us a lot of new more capacity.

But the Oslo, and it's going to give us.

The opportunity to add attractive features to our products, including SKU and so we believe that we will have the opportunity.

And 2.2.

On a more dynamic pricing, where they there's a premium component available and.

And our Cogs.

Sure Yeah, I'll Cook should be about the same.

These are the same chemical community too.

Our margins.

For the <unk>.

And the fiction the segment.

Net debt will get first hospital.

Yeah.

Okay, great. Thank you.

Thank you.

Our next question comes from the line of Vijay Kumar with Evercore ISI. Your line is now open.

Hey, guys. Thanks for taking my question.

Maybe first 1 on.

The order trends here.

The it looks like semi orders were down sequentially is that just timing.

Sequentially flattish and G. S orders I was curious I know last year Q4, we had some timing elements. If there was something like timing element that happened this quarter.

You every day.

Yes, what's interesting is the last quarter.

As noted on the orders for us and bile.

However, our industrial biotech our customers' orders were down sequentially.

Also at the end for the March quarter, and we had a number of large orders from.

Large pharma.

And it came in at the end of.

March so.

Those orders Didnt come in and in June, but that's just a timing issue because on whereas it fell at the end of March.

In terms of.

And GFS.

And we're continuing to build on the NPS business, we upped our revenue forecast. So we feel good about both.

And by oil and Ngls and although.

And the orders are worth talking about the the highest.

I would highlight that last quarter and the highest June shipments over 107000 genes I was on.

A lot of momentum and teens number of <unk> customers and expanding.

And customers increased by roughly 200 and ship to almost 1200 gene customers This last quarter.

So we are seeing good good demand from buyers and by our customers and it was a little bit lumpy from the March to the June quarter.

Oh.

Understood and then Jim maybe.

1 related on on.

And the updated guidance here.

For the Q4 revenues.

You know the headline the optics it looks like its 10% growth year on year No I know last year you had the.

M pull forward of NGL customer I think adjusting for that.

Getting to perhaps maybe in the mid <unk> growth for Q4.

Given.

And we've been tracking that's north of 60% growth year to date.

Any reason why on an underlying basis, except 1 off orders that growth should slow down here in Q4.

The only other comment I would make is and <unk>.

We got a lot of momentum Europe is now a larger part of our business. So it doesn't take that into and and we do also we're also because of the impacts of the pandemic.

If you do go back to revenue. This time last year, our revenue in Q4 last year was <unk> 2 million to $4 million.

If you take out.

For the 9 million for.

On the Regeneron order.

And you can see there for we're down to $23 million.

And so if you look at that versus our forecast.

75 to 7 and net half.

And we're up substantially and.

And the the only calibration and I'd say is that we're accommodating a higher and European revenue this year.

We got a broader customer base number of customers keep increasing and where.

And we're looking at the and potential impact of seasonal and vacations in Europe.

So I think it's just a matter of working through the summer period and the.

The impact on the Delta there and right now.

Just to clarify Jim the bleach and Ron was that <unk>.

6 or 9 and I thought for some reason I had a success being above plan.

And I had really yeah. So the overall regeneron with debt and it was a $9 million on the quarter I was just clarifying how much of the general on last year.

So 3 would have come in and last year correct for 6 where they come in and this year I'm sorry.

I just think about that.

And that you're going for last night, and just to give you a frame of reference from Q4 of last year before this year.

Understood. Thanks, guys.

Okay.

Great. Thank you.

Our next question comes from the line of Matt Larew with William Blair. Your line is now open.

Hi, good morning on the Sym bio side number of customers and up about 30%.

Maybe just talk about where you're seeing the most interest from new customers and maybe any of the impact from.

And the recently launched products like DNA, perhaps quantify any gene fragments agg.

And just kind of more color there.

Yeah.

And corporate for jeans and strong business.

And had another strong quarter and off.

Number of genes, we shipped a 107000.

On.

A record for us for person by on it.

And just take a look for the orders.

And the industrial chemicals was down sequentially.

And that was driven by and by 1 large customer but overall.

Vestal chemicals.

Bill.

Very strong strong business for us healthcare was strong on the quarter.

And I'll pick up and academic and.

And although farmer.

And was down sequentially that was due to a number of customers that had large orders standard.

The March quarter.

Strong pharma quarter for us and bio.

So on.

Our focus on expanding customer base.

And large pharma is working and.

And you can see with rapid gene ship from stores last quarter.

Okay, and then in terms of Biopharma partners and there's a big step up I think he's on the numbers 31 year and it seems like and what Youre seeing an inflection point. So just curious if there's anything to call out in terms of.

And so I'm sort of network effect or.

The product and are seeing from the market.

Yes, I think our sense from them for seniors a coke up on things.

Number 1.

As we get more and more paid projected net.

A good completion with more data that we can share.

And on the ninth mono and somebody who have more proof points and that definitely helps to get new business and then.

The point is we have built.

And.

On the.

And the commercial team that's M.

No. We have we have boots on the ground and each region to U S.

EMEA and APAC.

More people with great data.

Okay, and then Steve.

Speaking of data.

On the retail business.

Sorry.

[laughter].

And I apologize I cut you off there.

Yeah.

We're seeing repeat business and so.

And in a way and you get the debt does the flywheel effect of the repeat business is almost for free and so you can compound that repeat business with new gift and bill and.

And the debt.

The results so far.

And that's what we see.

Okay, Great and then sorry for the last 1 was asking on Tuesday.

White paper that was out.

In June on terms of DNA data storage just curious.

And if there's anybody feedback and reaction you've gotten from customers or potential partners and potential customers or potential partners.

And so I think the so.

There's a on the potential partners.

The new Bill if people.

Our group companies in the alliance is keeps growing.

Well.

And I'm, losing track, but that means there's more and more.

Off note available.

So that's that's 1 aspect of it.

We don't necessarily need partners, and we should be able to be self sufficient.

And the extended partner was accelerate.

15 P M.

Keeping our options open and then with and the Gulf.

And those on and growing.

And and was the weight per barrel as a first step.

I think.

The outcome that we're looking for is working which is as more and more.

Realization and.

In the month of August and meals that.

Is really and it doesn't have storage east coming.

And then so the growing mindshare and debt that debt being a defense.

For the storage and something to be on the new couch also.

Yeah, I think our strategy.

Being a leader and.

Getting debt Alliance style and started is.

Is working.

And I expect acceleration and early in the game.

Hum.

I think things are definitely going into the right direction.

Thank you on line.

Thank you.

Our last question comes from the line of Tycho Peterson with Jpmorgan. Your line is now open.

Hey, thanks.

Want to start with maybe a higher level question just around the competitive environment. You know, there's a wave of companies you know better than us around.

Some are leveraging semiconductors from are leveraging and kinetics, sometimes a decentralized bench top approach. So as you kind of look across the landscape.

Can you maybe just talk about how you think about competitive dynamics, how do you think about pricing going forward.

What degree maybe you're evaluating some of these technologies and might be helpful.

And and and customer stickiness as well I think this is a question we tend to get a lot too.

Yeah, no. Thank you to think of that could flow for the question and I think.

And we well in it.

And as the company and in our in the height they killed on so.

I think we have a healthy dose of paranoia on sales consumable for milk from extra debt.

We we don't Miss anything and so from that point of view we on.

And actually a student of the market and we we look very.

Very carefully.

As you pointed out there's different ways to slice and dice 1 ways.

Centralized versus decentralized and.

And there's a company that's sitting now and with codec.

Decentralized.

So frankly, we never see them and the market so.

And then there's plenty of fish and the water this glen and plenty of needs.

And I'm sure, there's a need for a centralized approach, but we.

And we don't we don't see at all impacting.

And our customer base because.

And we're basically investing in and the high throughput and the dynamics throughput and then in the local low cost.

And although aspect is limited synthesis and I think we've said in the past debt Oh Gee is compatible with our with the enzymatic synthesis and the win.

It's better.

I think all of those methods, there and that'll be cheaper and so I think we'll always at the.

Cost advantage.

And.

And so we would have shown for the market, but at this point.

We don't see it completely these crucial and then 'twenty, we're focused on executing on what we are doing.

I think it's ours to lose and we have a few chose and I'll hand.

And and our investments and the effect of the future is the key 1 for us too.

To shoot to growth and and move on to the next stage.

And.

Okay. That's helpful and then thinking a little bit on on the near term, we get and number of investor questions around just the COVID-19 opportunity I know youre watching the RNA reference controls and so are you able to just kind of think about how you're sizing that opportunity and.

The near term.

And so we've said that it for the non material. So it's less than 10 per cent for revenues.

But it's great revenue, we love it and it's amazing margin and.

We will keep lunching RNA controls on them.

It's useful to the to the 2.2.

M.

The scientist and and the health care system that debt.

They do testing.

And that's what we've seen is frankly the are the revenues of our early controls.

And by and large.

T J P M.

But the revenues from the new control.

Kept the momentum and so it's a pretty stable.

A revenue stream for us again not material, but.

And I'm very glad that we have it both for the contribution and we provide and and the revenue it brings.

We have also opportunities as you know well antibodies, we we we contribute to the development of antibodies and I think.

And.

As COVID-19 is going to be with us for a long time and I think there is opportunity for in this and the therapy area well there will always be people at on those vaccinated and debt.

Net need.

Oh and therapies, and then they'll always be be antibodies that are needed for testing. So we keep pushing on the diagnostic and therapy.

He is.

As well as we think we have opportunity to to out license some of the antibodies that we have from them.

Okay. That's helpful. Lastly, and maybe 2 quick ones unrelated, but I'll put them together and the interest and time. The genomics deal can you just talk a little bit about what that brings to the mgs.

Work flow for you guys and then separately on the factory of the future I'm wondering to what degree you can start to kind of pre sell some of that capacity ahead of that comes on line.

Thanks, So on.

Genomics.

And as you know we put the target that we want to convert the steep macro and market into sequencing.

We think we have a unique solution there.

The proof points that it is possible and original Iran with no debt moved.

And if it was no cheaper to use a M. P. S. At the same time.

And so the proof point these debt it is cheaper and sometime we recognize that the that day.

There's some bias to switching 1 is the content, which contain do I use because with twist. It can be anything that you want which can be dumping and so and that area. We have lessened and so the original content available for sale and then the second friction.

Friction to switching is around automation and being able to process thousands of samples a day.

As you know the languish and there's a process of doing a sharing.

Sharing and and and.

On retail and put your tail and litigation and it's a very heavy process to automate we usually IGN and process, we have a PCR workflow and.

So that it makes me automation I don't see a trivial, but a lot easier and so what what Jimmy brings us is the.

And the very easy to automate workflow debt based on PCL that will help us and that Smith micro reconversion and then.

On.

On your on your second comment around pre selling.

And the fact of the strict Covid I'll say, probably not and we know we know that the demand is there but.

It's really and it should be assumed value.

And bio.

For the line and so and that proclaimed people and they give us a sequence that they want their DNA now and so theres not theres not good at the preceding 2 to be done and but at the same time, it's not a let's build it and they will come and we are pretty well pretty certain that there is a demand for it too.

Not too concerned about but.

Dimension emission and once we get the CPE sales.

Okay. Thank you that's helpful.

Thank you and thank you.

There are no further questions at this time I would now and turn the call back to a doctor and they look for this for.

Our closing remarks.

Thank you very much and.

Thank you for joining us today.

And you know a twist, we're bridging the promise of synthetic biology, and genomics with the reality of building and exciting business.

We maintained our momentum moving into the remainder of the year, we have the team in place to foster innovation and we.

All our sales are comfortable to execute aggressively we look for.

For a while to sharing our progress with new in the months ahead and its debt.

It concludes today's call. Thank you very much.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.