Q2 2022 Ginkgo Bioworks Holdings Inc Earnings Call

We thank you for joining us and look forward to providing you with an update on the last quarter.

And to providing you with an update on the last quarter.

Thanks, Nina.

It's essential to our foundry that we be able to run many, many designs or prototypes through every step of that process in order to minimize the overall timeline of a project or a cell program to develop a cell that meets the customer's specifications.

As a reminder, during the presentation today, we'll be making forward-looking statements, which involve risks and uncertainties.

So that's like the first half of the question, which is like, how do we win customers?

So not only do we want to be able to look at thousands or tens of thousands of prototypes, for every cell program, we also want to be able to work on many cell programs at the same time. Today we work on tens of cell programs in the Ginkgo Foundry at any point in time.

As a reminder, during the presentation today, we will be making forward looking statements, which involve risks and uncertainties. Please.

Please refer to our filings with the Securities and Exchange Commission to learn more about, these risks and uncertainties.

Please refer to our filings with the Securities and Exchange Commission to learn more about these risks and uncertainties.

We'll follow our standard agenda for these calls, providing an update on our financial, progress while also taking time to dig deeper on our strategic priorities.

We'll follow our standard agenda for these calls providing an update on our financial progress, but also taking time to dig deeper on our strategic priorities will end with a Q&A session and I will take questions from analysts investors and the public as usual you can submit those questions to us in advance via Twitter hashtag Ginkgo result, or email at investors that ginkgo bio works Dot com.

We'll end with a Q&A session and I'll take questions from analysts, investors, and the, public.

As usual, you can submit those questions to us in advance via Twitter, hashtag GinkgoResults, or email at investors at GinkgoBioworks.com.

All right, over to you, Jason.

Alright over to you Jason.

Thanks, Anna-Marie.

Thanks Anne Marie.

So, we always start with this slide because our mission drives much of our long-term strategy, and even many day-to-day decisions here at Ginkgo. Very simply, we want to make biology easier to engineer, and we do that by scaling our, platform for programming cells.

And then we have to actually deliver for customers.

In the future, we want to be able to work on hundreds of cell programs at any given time. So when you put all of that together, you find you have a complex multi-step process of designing, building, and testing cells. You want to be able to do that process at scale with tens of thousands prototypes within each program, and we want to be able to do many programs at the same time.

So we always start with this slide because our mission drives much of our long term strategy and even many day to day decisions here at Kimco very simply we want to make biology easier to engineer and we do that by scaling our platform for programming cells.

The result of that is that scale, logistics, operations, the throughput of our foundries, becomes really, really important. Those robotic and software automation paired with what humans can do means that overall our foundry can do way, way more work and way, way more cell programs than would be possible by people alone.

I like this slide here as a summary of sort of the way our business works at Ginkgo. So, our customers bring us ideas for what they want a cell to do, and we use our platform, to engineer a cell that meets the customer's specification.

So Jen, you've in the past run our commercial operations team, and now you've run both commercial operations as well as business development.

And so this really leads in nicely for you to hear from Kristen Tran, our head of automation, who will tell you about all of the incredible, robotic automation that we use throughout the Ginkgo Foundries.

I like this slide here as a summary of sort of the way our business works I couldn't go so our customers bring us ideas for what they want to sell to do and we use our platform to engineer a cell that meets the customer's specification. Our platform consists of two pieces, our foundry and our code base. Our foundry is an automated lab.

And so we got a couple of questions on scale up and for customer success.

At Ginkgo, we try to automate as much as we can. We start with small-scale automation, really accessible stations for scientists and engineers to walk up to, really easy for them to start using.

Our platform consists of two pieces, our foundry and our code base.

Our foundry is an automated lab, and I'm sitting here in Boston in that lab today, and we believe, the key value proposition for our customers is that we're able to turn what's typically an underutilized fixed-cost investment for most companies, in other words, sort of a physical R&D lab in their facility, we can turn that into a highly efficient variable cost for them, and we can invest at Ginkgo in large-scale infrastructure so that our customers can benefit from the scale economics we generate by having sort of one set of infrastructure serving many customers instead of just scaled for one.

So from, I'm not even going to try to pronounce this person's name on Twitter, Top Guard, I think.

Once we actually start scaling up, we can actually start stringing these operations together seamlessly on an integrated work cell, which really allows us to kind of really take off on that scale.

Im sitting here in Boston and that allowed today and we believe the key value proposition for our customers is that we're able to turn what's typically an underutilized fixed cost investment for most companies in other words sort of physical R&D lab in their facility, we can turn that into a highly efficient variable costs for them and we can invest.

What do you do to ensure a successful scale up to commercial production?

Our ginkgo in large scale infrastructure, so that our customers can benefit from the scale economics, we generate by having sort of one set of infrastructure, serving many customers instead of just scaled for one we will spend some time today talking about our pending acquisition of Zymogen, which we believe will drive our foundry capabilities the.

So, we'll spend some time today talking about our pending acquisition of Zymergen, which, we believe will drive our foundry capabilities.

Do you have pilot facilities or do you leave all that to the customers?

It really allows the scientist output to increase 10x, 100x, 1000x, and really that's our goal.

The other asset is our code base.

The other asset is our code base, it's a learning asset that accumulates as we run more experiments includes physical strains data various tools for programming cells. These learnings can help us avoid having to reinvent the wheel on every new program in other words. It can help keep us out of the lab in many cases, we're having to do that lab work. If we if we have something we can put to work from a pre.

It's a learning asset that accumulates as we run more experiments.

It includes physical strains, data, various tools for programming cells.

These learnings can help us avoid having to reinvent the wheel on every new program.

In other words, it can help keep us out of the lab in many cases from having to do that, lab work if we have something we can put to work from a previous project that's relevant to a new one.

<unk> project, that's relevant to a new one that can also increase the probability of program success and reduce it like I said, the total amount of work and therefore cost of these programs.

It can also increase the probability of program success and reduce, like I said, the total, amount of work and, therefore, cost of these programs.

And for the potential customers tuning in today, our whole model is to make this platform, available to you as fast as we can, so if you see a project we've done that's similar to what you're interested in or a technology we've acquired or highlighted, please do reach out.

And for the potential customers tuning in today, our whole model is to make this platform available to you as fast as we can.

If you see a project we've done that similar to what you're interested in or a technology, we've acquired or highlighted please do reach out you can get access to these technologies have them apply to your products in a matter of weeks.

You can get access to these technologies and have them applied to your products in a matter, of weeks.

So I want to give a quick preview into some of our recent highlights before turning it, over to Mark to walk through our detailed quarterly financials.

And then from Dominic Joe 2 on Twitter, the bottom line, how fast can you scale a molecule at what size tank?

We want to maximize that.

So I want to give a quick preview into some of our recent highlights before turning it over to Mark to walk through our detailed quarterly financials. So as we've described before one of the most important metrics for our success, you're seeing new customers choose to work with ginkgo for their R&D efforts in the second quarter, we added 13 diverse new cell programs, including with Nov.

We want to automate as much as we, can.

So as we've described before, one of the most important metrics for our success is seeing, new customers choose to work with Ginkgo for their R&D efforts. In the second quarter, we added 13 diverse new cell programs, including with Nova Nordis, and Sumitomo Chemical. We're grateful for these customers' trust and believe these additions are further validations, of the value of our cell programming platform.

How many molecules have you scaled at what size production?

And really whatever they're going to let us do, we'll try it.

Instead of having a scientist go from station to station, we have this centralized robotic arm that's going to handle all of the samples. And it's also going to record everything. And it's going to produce that valuable data that we need for our cell programs and for our code base.

What my team and I do as automation engineers, we like to look at what the physical activities, people are doing in the lab.

This is the bottleneck for synthetic biology.

Sure.

<unk> and Sumitomo chemical we're grateful for these customers Trust and believe these additions are further validation of the value of our cell programming platform as a small aside youll note. We are only disclosing here three customer names on this page are compared to the 13, new cell program additions I mentioned, we often get asked whether we put out.

So Jason mentioned earlier that we share a piece of the value for the programs we work, on for our customers. So that means we don't just send over a vial of engineered organisms and say, good luck. Instead, we have a deployment team that has expertise in the permutation scale-up, downstream process development, QAQC.

We're engineering cells and that requires a lot of precise handling of samples.

And so they work both in the lab we have here in Boston at headquarters, also with some mid-scale pilot partners that we have, and also a contract manufacturing organization.

What my team does is we take these activities in the lab that scientists are manually doing, such as pipetting, and we actually make a custom integration. So we integrate these in a work cell. With that custom integration, not only can we really control the timing and the precision of the activities, but we can actually track everything within our software so that all of the data can be collected and all of that can be reused for future engineering projects.

For automation, in addition to automating manual processes that a scientist would normally do with a bench, we can actually go beyond human capability and miniaturize certain reagents and certain reactions. So an example of this is with our acoustic liquid handler that can actually dispense nanoliter droplets of liquid. With one of our core processes, we were actually able to miniaturize the reaction 50x. In addition to that, it increases the speed and the output.

So our scientists are able to produce hundreds to a thousand x more output that they can trust and that they're able to go back to and reflect and really iterate on their process and on their design.

I think there is a misconception that, you know, we're trying to replace, you know, the activities that certain people do in the lab.

But the way that we look at it is we really want to augment the ability of a scientist. We want to increase their ability to perform experiments in the lab.

We want to give them the peace of mind that it's going to be done faithfully, that it's going to be done with high precision and high quality.

As a small aside, you'll note we're only disposing here three customer names on this page compared, to the 13 new cell program additions I mentioned.

We often get asked whether we put out a press release for every new program. People want us to be doing that.

Release for every new program people ask.

I want us to be doing that the short answer is we don't do that.

The short answer is we don't do that.

We end up following our customers' lead here, and sometimes our customers choose not to, announce. They may want to keep a program confidential because it's a new area they're moving into, or it might be a new program that's part of one of our ongoing collaborations, and they might not consider it enough of a big deal to announce it.

We ended up following our customers lead here and sometimes our customers choose not to announce when they may want to keep that program confidential because it's a new area there moving into or it might be a new program. That's part of one of our ongoing collaborations and they might not consider it in enough of a big deal to announce it the big utility of announcements is that they serve to help educate our.

The big utility of announcements is that they serve to help educate our potential customers, on the kinds of work we do at Ginkgo, and it helps them realize that Ginkgo's platform is relevant in their market. So basically, it's good marketing material.

Potential customers on the kinds of work, we do at Kimco and.

And it helps them realize that getting those platform is relevant in their market. So basically it's sort of good marketing material, we do push.

We do push for them when we can, these announcements, but it's not always possible, with the customer.

For them when we can have these announcements, but it's not always possible with the customer and Biosecurity, we executed very well through the remainder of the school year and have achieved $247 million of year to date revenue, while our K 12 testing business has been quieter over the summer just because many schools are closed as expected.

In biosecurity, we executed very well, through the remainder of the school year and have achieved $247 million of year-to-date revenue.

While our K-12 testing business, has been quieter over the summer, just because many schools are closed as expected, we're very excited to be seeing traction across longer-term biosecurity opportunities, including being awarded a contract from the CDC to expand our traveler-based COVID-19 monitoring services with an overall potential to exceed $61 million to Ginkgo and its partners based on CDC program options and public health priorities.

We're very excited to be seeing traction across longer term bio security opportunities.

<unk> being awarded a contract from the CDC to expand our traveler based COVID-19 monitoring services with an overall potential to exceed $61 million to ginkgo and its partners based on CDC program options and public health priorities, So really really proud to see that coming in it's really exciting and we'll talk more about it.

So really, really proud to see that coming in.

It's really exciting.

We'll talk more about it coming up.

Coming up but bio security has been a core focus for us over many years and has a deep relationship with our cell programming business and I'm, becoming even more excited about our positioning in.

But biosecurity has been a core focus for us over many years, and has a deep relationship with our cell programming business.

And I'm becoming even more excited about our positioning, in biosecurity well beyond what's happening in K-12.

In bio security well beyond what's happening in K 12.

We've had several other significant updates, since our last call. We recently received our third equity milestone payment, from Kronos based on work we delivered to them. We're proud of our partnership with Kronos, and ability to realize meaningful downstream value share from those programs.

We've had several other significant updates since our last call. We received our third equity milestone payment from Kronos based on work we delivered to them. We're proud of our partnership with Kronos and ability to realize meaningful downstream value share from those programs of course in July we announced the pending acquisition of zymogen and the bare agriculture agricultural biologicals assets.

Of course, in July, we announced the pending acquisition of Zymergen and the Bayer Agricultural Biologicals assets.

We'll talk a lot more about those transactions, in just a moment.

We'll talk a lot more about those transactions.

Just a moment, we also acquired certain assets from bits AUM, which is developing a real time metabolite monitoring technology that we hope will help accelerate product development timelines across our cell programs. Finally, we were thrilled to have added Dr. <unk>, Dr. Kathy, hoping hannan to our board she brings a wealth of experience and complements.

We also acquired certain assets from Bitome, which is developing a real-time metabolite monitoring technology that we hope will help accelerate product development timelines across our cell programs.

Finally, we are thrilled to have added, Dr. Kathy Hopinka-Hannon to our board.

She brings a wealth of experience, and compliments our other board members quite nicely.

Our other board members quite nicely so welcome Kathy.

So welcome, Kathy.

So that's a quick overview of our recent highlights.

So that's a quick overview of our recent highlights and with that I'll hand, it off to Mark to walk through our second quarter financial performance.

And with that, I'll hand it off to Mark, to walk through our second quarter financial performance.

Thanks, Jason.

Thanks, Jason our second quarter financial results reflect strong growth driven by solid execution in both our cell programming and bio security businesses.

Our second quarter financial results reflect strong growth, driven by solid execution in both our cell programming and biosecurity businesses. Total revenue in the second quarter of 2022, increased to $145 million, representing growth of over three times the second quarter of 2021.

Revenue in the second quarter of 2022 increased to $145 million representing growth of over three times, the second quarter of 2021.

I'll start by discussing our cell programming business, which we describe as our boundary. We added 13 new cell programs to the boundary platform, in the second quarter of 2022. As a reminder, our new cell program count, is a KPI that we're particularly focused on. Adding more programs benefits us strategically, by driving our scale economics, diversifying customers and programs, accumulating code base and accumulating potential sources of downstream value share. We supported a total of 73 active programs, in the second quarter of 2022 across 36 customers on our boundary platform.

We have a tolling arrangement for some products that we do make ourselves.

And with these different scales of automation, they can actually increase their output and create more valuable data for them to iterate on their process.

I'll start by discussing our cell programming business, which we describe as our foundry. We added 13 yourself programs through the foundry platform in the second quarter of 2022. As a reminder are you still program count as the CPI that we're particularly focused on adding more programs benefits us strategically by driving our scale economics diversify.

Something that's really special about BioWorks 5 is, in addition to the large scale that it provides, there's actually all of this really interesting new technology where we're able to sense the success of each operation. So you can tell whether or not an operation failed, was successful, and recorded.

We use different types of sensing technology including acoustics, light scattering sensing, light proximity sensors, and pinhole cameras.

What else can we automate?

And what's really great is, you know, we implemented this in BioWorks 5 in our latest facility, but we can actually take that technology and apply it to all the different scales of work that we do throughout the foundry.

So all of this technology that we're developing in BioWorks 5, we always have an eye on like, well, where else can we leverage this?

Customers and programs accumulating codebase, and accumulating potential sources of downstream value share.

This represents substantial growth, and diversification in programs relative to the 46 active programs in the second quarter of 2021, with strong growth coming from the pharma and biotech industry, as well as the food and ag industry segments.

Where else is this going to be valuable for us?

We supported a total of 73 active programs in the second quarter of 2022 across 36 customers on our foundry platform. This represents substantial growth and diversification in programs relative to the 46 active programs in the second quarter of 2021 with strong growth coming from the pharma and biotech industry.

Really that's how we develop our automation.

We are always thinking about it in like, what are these new tools and how can they be even more helpful to Ginkgo and to our scientists.

A lot of resources went into building BioWorks 5, but something that's really unique about the automation at Ginkgo is that we have our own custom integration and software integration.

And we're constantly thinking about how can we scale?

So we work really closely with our colleagues in digital technologies.

We have a great relationship and what we do is we try to think like, how can we leverage all of that technology that's already out there and make it really useful for Ginkgo and leverage it in a flexible way to apply to multiple programs.

Our infrastructure through custom automation and custom software can actually be applied throughout the foundry.

How can we be more efficient?

It can be applied for different cell programs, it can be applied for different organisms, and it's kind of amazing the diversity of scientific processes that can be performed on the same set of infrastructure.

We always have to pair that with flexibility, which is always quite the challenge, but it's a, really fun challenge.

I think we're only really able to do that because we have this in-house development team, both on the automation side and on the software side, as well as the DevOps side. We all work together really collaboratively to make sure that that integration is as seamless as possible.

All of our engineers at Ginkgo are really interested in being the ones that solve that problem and it's been pretty amazing to see what the teams are capable of.

We get to work really collaboratively with our engineering partners to create new technology, to create new capabilities on existing robotics.

And in addition to that, sometimes we even have custom partnerships where we're able to create something truly unique for Ginkgo.

Fireworks 5 is a really prime example of this, where we leverage existing high-throughput, manufacturing technology, but we're able to apply it to the synthetic biology space.

The process of designing DNA, which must seem like a very abstract concept, really involves using computers to go from ideas down to detailed DNA sequences that can be thousands or tens of thousands of letters of DNA long.

Because those DNA sequences are very long, and because we'd like to be able to design many of them at the same time, we've built a suite of design tools, computational design tools that our designers can use in order to come up with the best possible DNA designs for every cell program they're working on.

When you see our designers working, what they're really doing is interacting with software tools, many of which are proprietary, that allow them to stitch different pieces of DNA together computationally in a quick and efficient way, almost as easily as you can drag and drop objects in a software package. But those objects are actually DNA sequences that we are subsequently going to print out.

So once we've done that computational design process, which really looks almost like an architect or an engineer interacting with computer-aided design, then we move over into the lab.

As well as the food and AG industry segments.

Boundary revenue was $44 million in the quarter, more than double the second quarter of 2021. Boundary revenue benefited, from downstream value share revenue related to the previously announced achievement of an equity milestone for Kronos. We recognize $18 million of revenue, in connection with this milestone in the second quarter.

Battery revenue was $44 million in the quarter more than double the second quarter of 2021 foundry revenue benefited from downstream value share of revenue related to the previously announced achievement of an equity milestone for Kronos, we recognized $18 million of revenue in connection with this milestone in the second quarter.

As we have previously discussed, at our stage of business, we continue to expect this type of revenue lumpiness as milestones relating to various customer collaborations may be earned in certain quarters.

As we have previously discussed at our stage of business. We continue to expect this type of revenue lumpiness as milestones relating to various customer collaborations maybe earns in certain quarters.

Now, turning to biosecurity.

Now turning to bio security.

Our concentric offering continued to perform extremely well in the second quarter of 2022 generating $100 million of revenue in the quarter final security revenue consists primarily of product and service revenue from our end to end Covid testing offerings and the growth was driven primarily by K 12 pool testing, which was elevated in Q1.

Our concentric offering continued to perform extremely well, in the second quarter of 2022, generating $100 million of revenue in the quarter. Biosecurity revenue consists primarily of product and service revenue from our end-to-end COVID testing offering, and the growth was driven primarily by K-12 pooled testing, which was elevated in Q1 but continued to deliver strong volumes through the remainder of the school year.

But continued to deliver strong volumes through the remainder of the school year.

As expected, we have seen revenue for our K-12 programs decrease substantially through the summer vacation months starting in June.

As expected we have seen revenue for our K 12 programs decreased substantially through the summer vacation months starting in June .

Bio security gross margin was 36% in the second quarter and approximately six percentage point decline from the prior quarter performance as volumes fell from Q1, the infrastructure, we maintain to serve our clients for example in nursing contracts that have minimum order requirements was less efficient and <unk>.

Biosecurity growth margin was 36% in the second quarter, an approximately six percentage point decline from the prior quarter performance. As volumes fell from Q1, the infrastructure we maintained to serve our clients, for example, nursing contracts that have minimum hour requirements, was less efficient and resulted in this lower gross margin.

We continue to be very pleased with our performance in biosecurity, and while we will continue to be conservative in our guidance, given the inherent uncertainty in this area, we are encouraged to see government investments being made in longer-term biosecurity infrastructure.

In this lower gross margin.

We continue we continue to be very pleased with our performance in bio security and while we will continue to be conservative in our guidance given the inherent uncertainty in this area. We are encouraged to see government investments being made in longer term bio security infrastructure.

And now I'll provide more commentary on the rest of the P&L.

And now I will provide more commentary on the rest of the P&L, where noted these figures exclude stock based compensation expense, which is shown separately.

Where noted, these figures exclude stock-based compensation expense, which is shown separately. R&D expense excluding stock-based comp increased from $52 million in the second quarter of 2021, to $72 million in the second quarter of 2022. R&D expense related to the foundry increased as expected year over year, driven by expansion of foundry capacity and increased breadth of capabilities to support both current and future collaborations.

R&D expense, excluding stock based comp increased from $52 million in the second quarter of 2000 $21 million to $72 million in the second quarter of 2022, R&D expense related to the foundry increase as expected year over year, driven by an expansion of foundry capacity and increased breadth of Cape.

Abilities to support both current and future collaborations.

G&A expense excluding stock-based comp grew to $48 million in the second quarter of 2022, compared to $20 million in the second quarter of 2021, as we invested in business development and all other G&A functions to support the growth of new customers and programs, higher level of foundry activity, and our biosecurity offering, along with our expenses incurred in becoming a public company.

G&A expense, excluding stock based comp grew to $48 million in the second quarter of 2022 compared to $20 million in the second quarter of 2021, as we invested in business development and all other G&A functions to support the growth of new customers and programs higher level of <unk>.

Andrey activity and our bio security offering along with our expenses incurred and becoming a public company. We also incurred significant legal and other professional fees relating to M&A.

We also encouraged significant legal and other professional fees relating to M&A, largely due to the two very significant transactions we announced in July.

Largely due to the two very significant transactions, we announced in July .

Net loss. It is important to note that our net loss includes a number of non-cash, income and or expenses, as detailed more fully in our financial statements. Because of these non-cash and other non-recurring items, we look to adjusted EBITDA as a more indicative measure of our profitability. Adjusted EBITDA in the quarter was negative $23 million, compared to negative $38 million in the comparable prior year period.

Net loss it is important to note that our net loss includes a number of noncash income <unk> expenses as detailed more fully in our financial statements because of these noncash and other nonrecurring items, we look to adjusted EBITDA is a more indicative measure of our profitability.

Adjusted EBITDA in the quarter was negative $23 million compared to negative $38 million in the comparable prior year period, a full reconciliation of EBITDA is provided in the appendix to this presentation and in our earnings release.

A full reconciliation of EBITDA is provided in the, appendix to this presentation and in our earnings release. Adjusted EBITDA was favorably impacted by the growth in our biosecurity business in the quarter.

<unk> EBITDA was favorably impacted by the growth in our bio security business in the quarter.

And finally, CapEx in the second quarter of 2022 was $10 million, reflecting foundry capacity and capability investments.

And finally capex in the second quarter of 2022 was $10 million, reflecting foundry capacity and capability investments.

CapEx has continued to be impacted by timing of equipment purchases and projects, and so we would, expect to see significantly higher CapEx in the second half of this year.

Capex has continued to be impacted by timing of equipment purchases and projects and so we would expect to see significantly higher capex in the second half of this year.

One final comment on stock-based compensation expense.

One final comment on stock based compensation expense as a reminder, we provided extensive disclosure in our Q4 earnings release relating to GAAP accounting for the modification of restricted stock units that had been issued prior to us becoming a public company our Q4 disclosures indicated.

As a reminder, we provided extensive disclosure in our Q4 earnings release relating to GAAP accounting for the modification of restricted stock units that had been issued prior to us becoming a public company. Our Q4 disclosures indicated that as of December 31, 2021, we expected a further $2.2 billion of stock comp expense to be booked in 2022 and beyond relating to this adjustment, the calculation of which was based on the stock price of $13.59 on November 17, 2021.

But as of December 31, 2021, we expected a further $2 $2 billion of stock comp expense to be booked in 2022 and beyond relating to this adjustment.

Calculation of which was based on the stock price of $13.59 on November 17.

Substantially, all of the $607 million stock compensation expense in the second quarter relates to this ongoing wind down. And we continue to expect most of the remainder to be booked in the rest of 2022 with a small tail that extends into 2023 and beyond.

2021 substantially all of the $607 million stock compensation expense in the second quarter.

Rates to this ongoing wind down and we continue to expect most of the remainder to be booked in the rest of 2022 with a small tail that extends into 2023 and beyond.

Now I'd like to provide some commentary on our revenue outlook for 2022.

We continue to expect it.

An incremental 60, new cell programs with diversity in end markets as well as between new and existing customers in full year 2022.

We are increasing our full year guidance for total revenue by $50 million over our prior outlook.

A range of $425 million to $440 million, we are reiterating our foundry revenue outlook to be in a range of $165 million to $180 million for full year 2022.

We continue to have line of sight to material downstream value share in the second half of the year.

I do want to remind folks again, just as we saw in both our first and second quarter results.

Just on the specific technical progress achieved stage of maturity of our programs and timing of any milestone payments, we can see lumpy foundry revenue on a quarterly basis and our annual guidance represents our current forecast of that timing for the remainder of the year.

Based on our strong performance in bio security in the second quarter. We now expect bio security revenue to be at least $260 million for full year 2022, an increase of $50 million from our prior outlook.

As was the case throughout 2021 in the first quarter of 2022, there still remains significant uncertainty in the bio security market in general.

Although several state and government programs have elected to extend K to 12 and community testing programs. There is uncertainty about the actual level of testing in the next fiscal school year <unk>.

Ginkgo is actively working on new opportunities in biosecurity, including internationally. However, the timing and amount of revenue from these opportunities is uncertain.

<unk> is actively working on new opportunities in bio security, including internationally.

However, the timing and amount of revenue from these opportunities is uncertain.

In summary, we are pleased with our overall progress.

DNA printing, again, that's a very abstract concept.

In summary, we are pleased with our overall progress we are executing on a diverse range of existing programs and new program growth on the boundary platform.

Another strong quarter from Biosecurity is contributing positively to cash flow.

And the Companys total cash.

The position of approximately $1 $4 billion remained strong.

We are executing on a diverse range of existing programs and new program growth on the Foundry platform.

And so that team has worked on a variety of commercialization efforts.

Well, does it look like a desktop printer that you might have at home?

And now Jason back to you.

Thanks, Mark this is another strong quarter for ginkgo, we executed well in both our cell programming and bio security business and I'm really pleased we were able to revise our 2022 guidance higher for two quarters in a row now.

So we've scaled a number of compounds, including flavors and fragrances, proteins, other chemicals, many of which are on the market today.

Or what does it look like?

So we spoke with you all recently about the pending zymogen and Bayer transactions and I encourage you to go watch that call on Youtube. If you want the full details, but I do want to spend a bit of time on these transactions. Today is we expect that they will meaningfully benefit our platform and our customers I also want to address a key focus area both for the market and for us here.

Another strong quarter from biosecurity is contributing positively to cash flow, and the company's total cash position of approximately $1.4 billion remains strong.

I can go which is cash runway and our path to profitability.

Finally, we recently released our inaugural sustainability report and I wanted to spend some real time, there because ESG is not a box checking exercise for us here I can go it is fundamental to our strategy, so rather than sort of publishing that report and calling it a day I did want to spend some time walking you through our approach so okay, let's dive in.

And now, Jason, back to you.

When the scale, you talked about what to what scale, so that's highly dependent on the product that we're making.

Well, it's a lab operation, but it uses increasingly advanced, sophisticated technology in order to make the operation of printing DNA as cost-effective and reliable as possible.

Thanks, Mark.

And so scale is the production scale is relative to the customer.

So we work with partners such as Twist Bioscience, to use their proprietary technology for printing out, literally using inkjet printer technology, to place individual DNA bases together in the right sequence so that we get the new DNA sequence that corresponds to what our designers have developed in our computer-aided design tools.

So I'm Super excited about both the planned acquisitions of zymogen and the AG biologicals assets from bear we've had a long history of successfully acquiring and integrating technologies into <unk> platform and we're excited about the capabilities that we expect these two new acquisitions will provide for our customers.

This is another strong quarter for Ginkgo. We executed well in both our cell programming and biosecurity business, and I'm really pleased we were able to revise our 2022 guidance hire for two quarters in a row.

On the very high end, we've scaled up processes up to several hundred thousand liters, and some higher value compounds production scale is some might think it's quite small.

So DNA printing really looks like a very, very complicated printer.

So we work with customers in different ways because our customers have a variety of expertise in production themselves. So that might mean that we're transferring processes directly to them, to their pilot facilities or their production facilities.

Thereafter, once we have short printed DNA sequences of, say, 100 bases long, we next need to stitch those 100 base sequences together into a 1,000 or a 10,000 base sequence of DNA that encodes a gene for a protein or a set of genes for a metabolic pathway. And that operation, stitching those short pieces of DNA together, is again a lab operation.

That might mean we're partnering with them to find a sort of a supply chain manufacturing company that would work for them.

And it looks like a lot of liquid handling. It looks like a lot of moving small volumes of liquid from one source to a destination, and mixing lots of different liquids together.

And so that's a process where we rely very heavily on liquid handling automation, to scale the amount of DNA molecules that we can build at the same time for many cell programs.

Once we put that DNA into the cells, and that process, again, really just looks like a liquid handling process. We take a little tube of cells, we take a little tube of DNA, we mix some of the DNA into the cells, we treat them with some heat and some chemicals, and that helps the cells take up the DNA inside them and integrate the new DNA into the genome of the cells.

Okay, so we spoke with you all recently about the pending Zymergen and Bayer transactions, and I encourage you to go watch that call on YouTube if you want the full details, but I do want to spend a bit of time on these transactions today as we expect that they, will meaningfully benefit our platform and our customers.

In some cases, they're on the market to buy a facility themselves, and we've helped them do that as well.

I'll dig into the strategic rationale for these two transactions in just a minute, but I want to remind you of the basics. So desire merchant acquisition is really focused on bringing on strong foundry capabilities and accelerating our technical roadmap. It can go the deal is structured as an all stock transaction with a fixed exchange ratio representing approximately five 2%.

I also want to address a key focus area both for the market and for us here at Ginkgo, which is cash runway and our path to profitability.

So a variety of models that we work with customers, they're all oriented around getting products to market.

Finally, we recently released our inaugural sustainability report, and I wanted to spend, some real time there because ESG is not a box-checking exercise for us here at Ginkgo. It is fundamental to our strategy. So rather than sort of publishing that report and calling it a day, I did want to spend, some time walking you through our approach.

And then you ask the question about how fast is this?

Once we have that operation done, we then grow the cells. So we start with a tiny tube with just a handful of cells in it, that have the new DNA, and we allow those cells to grow so that we have millions or billions of copies of that newly programmed cell.

Those cells grow in either small bioreactors, that look like miniaturized versions of fermentation systems at a brewery, or it happens in plates that have hundreds of individual wells in them so that we can grow many different populations of cells or many different prototype cells at the same time.

Once we have those cells grown up, we have lots and lots of cells, then the next step is often to sequence them, so DNA reading.

That's the process by which we read all the DNA that's in the cell, and make sure that we've put the right DNA into the cell.

That's an operation that happens on very sophisticated instruments, and the machine streams data to our proprietary databases in our data lake here at Ginkgo, and that data contains all the DNA sequences that are found in those cells.

So okay, let's dive in.

I think time is highly dependent on scale, familiarity with the processes, what the capital requirements are, if people have a facility themselves.

That's, again, a computational or a digital process.

Once we know that those DNA sequences are right, then we move on to measuring the performance of those cells, and what that looks like is taking the cells, observing them via instrumentation that can, say, look at the levels of particular molecules or identify the particular molecules that are being made by those cells and really allow us to look inside the metabolism of the cell or the behavior of the cell so that we can understand how its performance matches up to what we expect.

So when you see our testing operations in our foundry, what you'll generally see are collections of instruments that are 24-7 taking small samples from a culture of cells and chemically analyzing those samples to understand what's in there so that we can understand how those cells are performing.

So I'm super excited about both the planned acquisitions of Zymergen and the ag-biological, assets from Bayer. We've had a long history of successfully acquiring and integrating technologies into Ginkgo's, platform, and we're excited about the capabilities that we expect these two new acquisitions will provide for our customers.

And so because we work on such a wide variety, it's hard to answer that directly.

You'll see in the Ginkgo foundry there's an enormous amount of work happening, across many different cell programs at the same time.

All of those physical operations, all that work that's happening, is very hard to track unless you have really good software tools to manage the operations of the foundry and also to collect all of the data and metadata that is being produced across all of those operations and bring all of that data into a location like a database and into a format that our scientists can analyze what's happening and decide what to do next.

We've invested an enormous amount of energy and time over the last 12 years, building proprietary software tools that are completely critical to the operation of our foundry so that we can operate at a scale that would be hard to operate otherwise and at a level of quality and sophistication that would be impossible without dedicated software tools that were built specifically for our operation.

I'll dig into the strategic rationale for these two transactions in just a minute, but, I want to remind you of the basics.

5% pro forma ownership of ginkgo following the transaction.

So the Zymergen acquisition is really focused on bringing on strong foundry capabilities, and accelerating our technical roadmap at Ginkgo. The deal is structured as an all-stock transaction with a fixed exchange ratio representing approximately, 5.25% pro forma ownership of Ginkgo following the transaction.

We do have a couple tricks up our sleeves to speed that up.

And who better to tell you about that than our Head of Software, Jamie Cho.

As you've heard me say many times previously we have long respected the XI emergent team and the technology approach that they they use which is very complementary to ours that ginkgo and we're super excited to welcome them into the company the.

One of that is that we have an iterative nature of engineering organisms.

And as you've heard me say many times previously, we have long respected the Zymergen team and, the technology approach that they use, which is very complementary to ours at Ginkgo, and we're super excited to welcome them into the company.

So often we're able to transfer intermediate strains that they can start working with right away. And that both gives us feedback back into our engineering process, as well as speeds up the scale up to commercialization.

The software we build is uniquely tailored to Ginkgo's foundry's needs.

Our software team has a lot of the same traditional skills that you see on other software teams. They know how to program in Python and Ruby, Rails and React and all of those skills.

But what's really special about our team is we are all passionate about biology, and in fact our mission is to make delightful software that makes biology easier to engineer.

Ginkgo's unique focus on engineering biology at scale means that we have to build a software platform, that can handle that level of scale. We have powerful workflow systems that allow us to generate and execute really complex laboratory workflows

Great, thanks.

The Bayer acquisition is quite different, and we expect it will result in the development, of an entirely new capability and offering at Ginkgo in the agricultural biological space, and the launch of a new collaboration with Bayer, which builds significantly on our partnership over the past five years. We'll be acquiring from Bayer their fully owned R&D facility in West Sacramento, along, with its strain collection team and expertise for $83 million, which we can pay in cash or stock at our choosing.

The Bayer acquisition is quite different and we expect it will result in the development of an entirely new capability in offering that ginkgo in the agricultural biological space.

And the launch of a new collaboration with Bayer.

Which built significantly on our partnership over the past five years, we will be acquiring from bear Theyre fully owned R&D facility in West Sacramento, along with its strained collection team and expertise for $83 million, which we can pay in cash or stock at our choosing as I mentioned, we're also entering into a new multi year collaboration with bare understanding.

As I mentioned, we're also entering into a new multi-year collaboration with Bayer under, standard terms, including upfront R&D service fees and with the potential for downstream value in the form of royalties.

Terms, including upfront R&D service fees and with the potential for downstream value in the form of royalties. We're excited to grow our relationship with their and we celebrate their leadership and embracing outsourced R&D to automated lab platforms like ginkgo, which we believe is an inevitable trend across the biotech industry.

We're excited to grow our relationship with Bayer, and we celebrate their leadership in, embracing outsourced R&D to automated lab platforms like Ginkgo, which we believe is an inevitable trend across the biotech industry.

Actually, yeah, I do think it's worth giving a bit more color on this.

One small bit to it, again, to hammer home this idea of the app store, right?

So one of the, things you're going to get on the tech side by participating in an app store ecosystem is they're going to help you with distribution, right? Because they want your app to get out to as many customers as possible, because the mobile phone company is going to be collecting value every time you sell that app or when someone does a purchase through it.

Actually I do think it's worth giving a bit more color on this so we see things sort of kind of like the beginnings of the cloud compute industry. So you had companies that had large in house it departments with big fixed cost in house server infrastructure and all of these things and they had to go through a transition process, where they move that to external cloud <unk>.

So we see things sort of kind of like the beginnings of the cloud compute industry. So you had companies that had large in-house IT departments with big fixed cost, in-house, server infrastructure and all these things, and they had to go through a transition process where they moved that to external cloud service providers.

Very much the same.

Jen's team on operations, we want these cells to go to market because Ginkgo's going to get value back when they do.

So this is like an adjacent capability to our cell programming.

It's kind of like, yeah, Apple gives you the SDK and the distribution, right?

Service providers, so bear is making a decision to do a similar thing here for microbial engineering work in AG biologicals, they're basically divesting their in house by hand, microbial team and their in House Labs, Thats, what were buying right similar to kind of divesting your it department and moving into the cloud, Okay and certain.

So Bayer is making a decision to do a similar thing here for microbial engineering work, in ag biologicals.

Ginkgo's going to give you the CDK, and we're going to help you with deployment and fermentation through our partner network, right?

They're basically divesting their in-house by-hand microbial team and their in-house, labs.

That's what we're buying, right?

So it's actually kind of divesting your IT department and moving into the cloud, okay?

And it certainly helps this transition for Bayer to do this, that we're bringing on members, of their own team, their current team, and putting their expertise on top of our robotics at Ginkgo.

<unk> helps this transition for bear to do this that we're bringing on members of their own team their current team and putting their expertise on top of our robotics at kimco, but in my view companies should start to plan for this transition I think many of the companies out there doing microbial engineering today are likely overdue and making the shift to highly automated lab.

But in my view, companies should start to plan for this transition.

I think many of the companies, you know, out there doing microbial engineering today are, likely overdue in making this shift to highly automated lab platforms instead of trying to do this R&D slowly by hand in their in-house labs.

That forms instead of trying to do this R&D slowly by hand in their in house labs, So I'm Super excited to see that signal coming from there.

So I'm super kind of excited to see that signal coming from Bayer, and I hope to see more, Okay, so to put these transactions in context a bit more, it's kind of helpful to frame them in terms of the vertical and sort of horizontal impact of these two transactions.

And that's 100% in line with our business.

I hope to see more of it in the industry. Okay. So to put these transactions in context a bit more.

You're getting good at the like 30 second explanation.

Helpful to frame them in terms of the vertical and horizontal impact.

So we maybe we won't get those, comments on our next investor day.

These two transactions so bear it's about expanding our capabilities in the AG biologicals vertical right. So I spent some time last quarter, describing the scope of the agriculture opportunity, it's a massive market and central to our lives, we desperately need more sustainable and efficacious solutions in AG right now the west Sacramento assets are expected to bring important.

So BEHR is about expanding our capabilities in the ag biologicals vertical, right?

And we love this comment.

So, um, thanks, you know, and Jen for the for the help understanding sort of how we how we work with our customers and come up with those collaborations.

Maybe this we can now touch on a couple areas of growth that I think are really capturing everyone's attention. And those two sectors are sort of pharma, which is certainly a real growth area for us, especially over the past year and then biosecurity.

So I spent some time last quarter describing the scope of the agriculture opportunity. It's a massive market, it's central to our lives.

So maybe you know, starting with with pharma, we got a question also from Barrow Analytics, a lot of questions from Barrow Analytics.

We desperately need more sustainable and efficacious solutions in ag right now.

The West Sacramento assets are expected to bring important capabilities outside of strain, engineering.

<unk> outside of strain engineering. So this is why I think this is quite complementary to what we currently have strengths in our ginkgo, including translational research capabilities such as in plantar assays have been able to test in the plant pilot scale fermentation. They are a great facility there ought to be able to produce microbes at scale to go into trials.

So this is why I think this is quite complementary to what we currently have strength in at Ginkgo, including translational research capabilities, such as implant assays to be able to test in the plant, pilot scale fermentation, they have a great facility there to be able to produce microbes at scale to go into trials, formulation expertise, like what are the different chemicals you put with the microbes to have them do a seed treatment or foliar treatment, and finally greenhouse facilities.

What areas can foundry be, most readily applied to right now in the biopharma sector?

And what is Arie Belldegrun's vision?

Formulation expertise like how what are the different chemicals, you put with the microbes to have them do a C treatment or full year treatment and finally greenhouse facilities. So we believe having a world class end to end development platform is going to significantly improve our ability to serve customers in the AG space and not only we will be working deeply with bear across nitrogen fixation.

So we believe having a world-class end-to-end development platform is going to significantly, improve our ability to serve customers in the ag space.

Arie is unfortunately not here with us, although we're thrilled he's joining the board.

But, you know, can you talk a little bit about how, how we're approaching pharma and what pharma sees in our platform right now?

Yeah, definitely.

And thank you again for the question.

We're super excited to have, Ari on the board. We're really looking forward to working with him and getting his insights and advice into some of the areas that we're really excited about.

So this is this is huge for us.

And not only will we be working deeply with BEHR across nitrogen fixation, crop protection, and areas like carbon sequestration, we're also excited to work with new customers on the platform.

There are many, many areas in pharma that we're really excited about. And it ranges everywhere from like the drug discovery and development process at the front end, to the manufacturing process at the at the tail end, when a drug candidate has been FDA approved.

Crop protection in areas like carbon sequestration. We're also excited to work with new customers on the platform. In addition, we expect this transaction to relieve some of the limitations we had working in AG biologicals due to the structure of our original relationship with bear and our joint venture joined allows this allows us to work much more easily with new customers.

In addition, we expect this transaction to relieve some of the limitations we've had, working in ag biologicals due to the structure of our original relationship with BEHR and our joint venture JOIN.

Just to give you an example of some of the projects that we've done so far.

So in the, area of mRNA vaccines, which now we all know what how valuable they are and what they can do.

We've worked with Moderna, and we're working with others as well in the space in the production of key raw materials in the manufacturing of mRNA vaccines.

It's going to be an area that we will continue to focus on.

And we're really excited about, you know, the different possibilities of using the platform to improve the manufacturing process for these important therapeutics and life saving therapeutics in many instances, especially as those are being used for cancer.

We have a deal that we announced not too long ago with Biogen, where we are developing a next gen AAV production platform for gene therapy.

And that's a really exciting area for us to be digging, digging deep into.

We previously, have signed a deal with Roche, where we use our genome mining platform to discover novel antibiotics.

So that is less in the manufacturing side, but more in the upfront drug discovery and development side.

And along the same category of drug discovery and development, during COVID, we worked with a small AI enabled drug discovery company called Potion. They are now acquired by AppSci, where we used our foundry to help express and screen thousands of antibody candidates that they have uncovered during their computational process, and find those that are neutralizing against COVID-19.

Thank you, Ena.

So that's an exciting area that we look to do more in, in the antibody discovery and development area.

And the second, area that's obviously been the newer and really impactful is biosecurity, and specifically this year, you know, K-12 testing.

We're also working with others to improve the manufacturing of APIs, small molecules and biologics.

So Matt, I'd love you to talk about another elephant in the room, I think, you know, it's like what happens to biosecurity when COVID's over?

And we're also excited about cell therapy. There's a lot we can do in the area of cell therapy, whether it is to optimize the CAR constructs to make them ultimately more efficacious and more manufacturable, as well as, you know, working with manufacturers of cell therapy to help make their process more robust.

I think we're all hoping and praying that life gets back to normal.

This allows us to work much more easily with new customers on our platform at Ginkgo in, the ag space, which we believe will represent a real compelling revenue opportunity for us.

What what what happens to this business in 2022, 2023?

So the way we see pharma is that as the pharma sector continues to use biology as a way to develop novel therapeutics or improve new or discover or improve these newer modalities, we'll continue to see new applications of the Gingko foundry to help solve specific biology cell programming, problems.

And what we're seeing is precisely that there's there's as more of these new pharma companies and big pharma companies are looking for a specific way to address the near term challenges, they now see that cell programming is a very, very valuable enabler to help them get to their ultimate goals.

As on mute, it's never never too late in the pandemic to figure out how to unmute yourself.

On our platform. It can go in the AG space.

So that's one really important growth growth area for us, of course.

Yeah, thanks, Ena-Marie.

We believe will represent a real compelling revenue opportunity for us.

And look, I think this is a, the first part of this is everybody's, experienced, right?

By contrast, the Zymergen acquisition is really about improving our horizontal capabilities.

So I think it's very clear that globally COVID has shown us the need for this forward thinking technology first integrated approach to biosecurity.

Biology has caused massive, massive damage over the last year.

Contrast, zymogen acquisition is really about improving our horizontal capabilities. So you know as I imagine did pursue a very different business model to ginkgo and as such the market is focused much more on really on their product portfolio, but again, we have long admired what their team built and lab automation and technology in particular, they developed automation architecture that was designed to.

And it's something that we feel very strongly and have been working on as a team for the last 15 months, that we can do something to help.

But that's a pandemic moment, right?

The second piece is really important.

So Zymergen did pursue a very different business model to Ginkgo, and as such, the market has, focused much more on really on their product portfolio, but at Ginkgo we've long admired what their team built in lab automation and technology. In particular, they developed automation architecture that was designed to optimize for flexibility.

If you think about building a biological engineering platform, doing what we are doing, building an app store, and you use the digital revolution as a metaphor, right?

Cybersecurity is a massive business to enable the digital ecosystem to work.

There will be a massive industry at some point in biosecurity to power this biological manufacturing revolution.

And it's something that is that we feel very strongly about, from a platform standpoint, that we because biology is so powerful, we also need to be building the tools of biosecurity for that purpose.

Optimized for flexibility.

You know, as you understand, if you understand automation, flexibility is sort of the enemy, of scale when it comes to automation.

To help you understand the automation flexibility is sort of the enemy of scale when it comes to automation and so some of the technologies. They bill we believe can drive significant efficiencies here I can go and we're excited to develop those and pass that value on to our customers. Additionally, XI emergence team fits well into <unk> existing hiring plans and we expect that adding them will act.

And so some of the technologies they've built, we believe, can drive significant efficiencies, here at Ginkgo, and we're excited to develop those and pass that value on to our customers.

Additionally, Zymergen's team fits well into Ginkgo's existing hiring plans, and we expect, that adding them will accelerate our growth plans.

<unk> our growth plans ultimately the zymogen transaction will significantly improve our platform and benefit our customers in the form of lower program costs and increased probability of program success. Okay.

Ultimately, the Zymergen transaction will significantly improve our platform and benefit, our customers in the form of lower program costs and increased probability of program success.

Okay.

So we'll keep you all updated as these transactions progress, but I wanted to cover that background, quickly in case you missed our conference call on July 25th.

Okay. So.

We will keep you updated as these transactions progress, but I wanted to cover that background quickly NK.

In case, you missed our conference call on July 25 for more details on those transactions do watch a Youtube video on our IR page I think it's worth saying, okay. So for our next topic.

For more details on those transactions, do watch the YouTube video on our IR page.

I think it's worth seeing.

Okay.

So for our next topic, it sort of goes without saying that there's a lot of market focus, on cash runway and profitability right now, so I want to spend a little bit of time on those topics.

So for us, there's this two sided mission orientation to build the platform in a secure and transparent and caring way with biosecurity tools, but also to help respond to pandemics.

This is not the last pathogen that will have pandemic potential.

It goes without saying that there is a lot of market focus on cash runway on profitability right now so I want to spend a little bit of time on those topics. We get asked about it a fair bet. Okay. So first I want to be clear that we expect to maintain our runway with XI emergence and bear in the fold and indeed, we underwrote and structured transactions with that priority in mind. So for zymogen, we expect the <unk>.

And so the direct question of what happens to the business is really an interesting one.

We get asked about it a fair bit.

Okay.

So first, I want to be clear that we expect to maintain our runway with Zymergen and Bayer, in the fold, and indeed, we underwrote and structured the transactions with that priority in mind.

It's pretty clear to us, it's a matter of scale and timing, not really of whether it will develop.

We're seeing indications that governments are taking the response to this pandemic very seriously.

Private companies are thinking about what biosecurity looks like.

In the U.S. alone, we think the reports are $16 trillion of economic output GDP loss due to this pandemic.

People are saying we should spend $20 to $40 billion a year to protect the world from the, next pandemics.

So from a standpoint of what we're looking at, how we're thinking about it, how we're guiding our partners and otherwise, it's both of those.

We're one of the major providers of K-12 surveillance testing across the country, something that's a new thing that people haven't done in the past. So we're excited about it, but we're also cautious because we're still in the midst of the pandemic.

So for Zymergen, we expect the pro forma cost structure, you know, to be well below that, of the combined standalone companies.

Pro forma cost structure.

Be well below that of the combined standalone companies. So as <unk> is continuing its cost and program rationalization and expected burn rate to decrease significantly in the near term more importantly, while we're excited that the XI imaging team joining ginkgo will accelerate our hiring plans. These additions should meaningfully offset expenses that we would have otherwise budgeted.

So Zymergen is continuing its cost and program rationalization and expect its burn rate to, decrease significantly in the near term.

More importantly, while we're excited that the Zymergen team joining Ginkgo will accelerate, our hiring plans, these additions should meaningfully offset expenses that we would have otherwise budgeted. In other words, our sort of, you know, our hiring plans independent of Zymergen.

Excited, important long-term mission component, and being cautious about setting how and on what time that will become a really large and robust market.

But ultimately, something that we care deeply about and are spending a lot of time on.

Thanks, Matt.

And, you know, second element of care that's, I think, really important to us, relates to a really nice question that we got in that says, how and where do you draw the line with requests either from, and this is for you, Jason, from either commercial or government sources that may raise ethical concerns because of the potential uses from the results?

Other words or are sort of.

Our other our hiring plans independent of Saxon so so for bear while this is a brand new capability and incremental expense. We expect the R&D service fees from this upcoming contract with bear alone to significantly offset the expenses that we're taking on the multi year bear anchor contract is expected to provide a <unk>.

So for Bayer, while this is a brand new capability and incremental expense, we expect the R&D, The multi-year BEAR anchor contract is expected to provide a strong base of demand, and then any fees associated with new ag customers on the platform, which we hope to get, would present upsides to that outlook.

Are you prepared to deny requests that cross that line despite potential revenue losses?

Yeah, this is a super good question.

<unk> base of demand and then any fees associated with new AD customers on the platform, which we hope to get would present upside to that outlook. So taken together, we feel we're in a very strong financial position with nearly $1 $4 billion of cash on the balance balance sheet, we're able to minimize the incremental recurring expenses associated with the two transactions described here and most.

So taken together, we feel we're in a very strong financial position. We have nearly $1.4 billion of cash on the balance sheet.

We're able to minimize the incremental recurring expenses associated with the two transactions, described here.

And most importantly, these deals enhance our growth opportunities.

These deals enhance our growth opportunities and the AG vertical we can grow revenue with bear and other potential customers with zymogen improvements at our platform increase efficiency and probability of success, which gives us better unit economics MPV per program and the positive feedback loop, we're bringing new programs to the platform in other words. The most important thing is we continue to invest in getting <unk> to make it better.

In the ag vertical, we can grow revenue with BEAR and other potential customers.

And you know, Matt touched on this, but we do think, it's really important to note that, you know, we do care how our platform is used in the world, right?

You know, as we enter an era where you can, you know, program cells like you program computers, you know, that's a big deal.

You know, biology is responsible for, you know, our food, our atmosphere, clean water, you know, as we're living through this pandemic, our public health.

And so starting from a footing that we do care what happens with our platform, it isn't just, as simple as, you know, well, whatever someone pays for, it is an important, it is an important line to draw.

With Zymergen, improvements in our platform increase efficiency and probability of success, which gives us better unit economics, NPV per program, and the positive feedback loop of bringing new programs to the platform.

You know, I'll point out, one of the things that was really interesting during COVID, it's like, I think people tend, you know, actually, I think Governor Patrick touched on this, you know, during the, you know, Investor Day presentation, he said, you know, it's a false choice between like doing good and, you know, making money being a successful company.

In other words, the most important thing is we continue to invest in Ginkgo to make it, better for our customers and drive growth, and that's what we're doing here.

It's not quite so simple.

For our customers and drive growth and that's what we're doing here. Okay. So as an aside I did want to be clear that in our modeling we made pretty conservative assumptions about certain specific items in the transaction.

Okay.

So as an aside, I did want to be clear that in our modeling, we made pretty conservative, assumptions about certain specific items in the transaction.

So first, Zymergen plans to explore strategic alternatives for its advanced materials and, drug discovery businesses pre-close.

I agree with that.

First XI origin plans to explore strategic alternatives for its advanced materials and drug discovery businesses pre close. So this is I imagine the process. They are running this but we're very supportive of it and think we can given our history of ginkgo of launching and forming companies you've seen us do this a number of times.

I think people frequently imagine, okay, the thing you're not going to do and not make money doing, but what we also saw during the pandemic is it was so volatile, things were moving so quickly.

And there were all these questions of like, can you do that?

And you would make these decisions to say, well, you know, I don't know, is it going to get schools open?

So this is Zymergen's process.

They're running this.

But we're very supportive of it and think we can, given our history at Ginkgo of launching, and forming companies, you've seen us do this a number of times, and we think we can help.

Is it going to help, you know, this thing in society, you know, right?

And those are caring how your platforms use too, right?

We can think we can help.

An outright sale of a business unit could create additional cash proceeds and reduce, operating expenses.

An outright sale of a business unit could create additional cash proceeds and reduced operating expenses. The spinout could reduce costs create a new customer for ginkgo could provide opportunity for additional upside through appreciation of our equity holding we would have so we didn't assume these outcomes in our base case, but believes <unk> product portfolio is strong and they have.

The spin-out could reduce costs, create a new customer for Ginkgo.

It could provide opportunity for additional upside through appreciation of equity holding, we would have.

So we didn't assume these outcomes in our base case, but believe Zymergen's product, portfolio is strong, and they've already received serious inbound interest since the announcement.

Already received serious inbound interest since the announcements.

Second, Zymergen has a deferred lease liability, largely in connection with its new headquarters, in Emeryville.

Second as I imagine has a deferred lease liability largely in connection with its new headquarters in Emeryville, we've assumed that liability stays with genco, but we'll be actively evaluating real estate portfolio rationalization and any successful effort to consolidate the real estate could represent meaningful upside to the base case and further reduce incremental cash burn.

We've assumed that liability stays with Ginkgo, but we'll be actively evaluating real estate, portfolio rationalization, and any successful effort to consolidate the real estate could represent meaningful upside to the base case and further reduce incremental cash burn.

I'm outlining these examples, not to promise that they're going to happen, but just to, highlight that while we're not counting on these items occurring, there are ways that we can improve the Zymergen deals financial case or these things that come about.

So it can also be ways that would actually lead to expanding the business if it's the right thing to do, right?

Outlining these examples not the problems that theyre going to happen, but just to highlight that while we're not counting on these items occurring there are ways that we can improve the XI imaging deals financial case or are these things that come about.

Okay.

Okay. So.

So cash runway is critical in keeping that margin of safety.

So cash runway is critical and keeping that margin of safety by the way, while we build ginkgo over the years. This has always been a very big part of my job is not lost on me, but the market is also focus on profitability right and that that's also a topic. That's very important to me, especially now as ginkgo continues to mature as a business. So youll see us talk about our path to reaching our.

By the way, while we built Ginkgo over the years, this has always been a very big part, of my job, so it's not lost on me.

But the market is also focused on profitability, right?

And that's also a topic that's very important to me, especially now as Ginkgo continues, to mature as a business.

So you'll see a talk about our path to reaching operational profitability more in future earnings, calls, and this is something I'm spending increasing time on the team with internally to focus on.

<unk> profitability more in future earnings calls and this is something I'm spending increasing time on the team with internally to focus on but today I just wanted to highlight some of the structural levers we have to help us based on how our business model works I think though okay. In other words, how this places organized I think actually gives us some advantages here. So I've talked about some of these before but.

But today, I just wanted to highlight some of the structural levers we have to help us, based on how our business model works at Ginkgo.

And so I do think this is an important topic going forward.

I'm not going to pretend we have it all figured out.

Okay.

It's going to be a collective question for society, how we want to deploy engineer biology in the future.

In other words, how this place is organized, I think actually gives us some advantages, here.

So I've talked about some of these before, but this level of optionality is quite useful.

This level of Optionality is quite useful there are a lot of ways to tackle our mission of making apologies her to engineer and depending on what we run into I wont be able to adjust our approach on the fly. Okay. So the first of these levers I'll talk about is platform scale, which we've emphasized in our prior earnings calls platform scaling is not just growth for growth's sake, but every company wants to get bigger I guess.

There are a lot of ways to tackle our mission of making biology easier to engineer.

And depending on what we run into, I want to be able to adjust our approach on the fly.

Okay.

So the first of these levers I'll talk about is platform scale, which we've emphasized, in our prior earnings calls.

But we want to start by saying we care how the platform is used.

Thanks, Susan.

Platform scaling is not just growth for growth's sake, like every company wants to get bigger, I get it. But in our case, a bigger platform is actually better for our customers and better for us, right? It improves our unit economics, right? Very similar to how a larger manufacturing plant would help a semiconductor or automotive, company as we build bigger foundries, our costs fall. And that will ultimately drive company level profitability. And it also allows us to offer lower cost to customers while we're improving our program, margins, right?

So we're just about out of time.

So I'm just going to do a couple more questions.

The next set are for me.

But in our case, a bigger platform is actually better for our customers and better for US right. So improves our unit economics right very similar to how a larger manufacturing plant with help of semiconductor automotive company as we build bigger foundries are cost fall and that will ultimately drive company level profitability and it also.

But I just like the Twitter handle.

So I'm going to read them all.

So what is it, how's the process going?

And it's around the process here for the SPAC transaction.

And when is this expected to close?

So SPAC Doggy Dog wants to know, when we expect the ticker to change to DNA.

So, you know, nothing at this point that would indicate any change in the timing. We're still expecting to close in the third quarter of this year.

And then, you know, a couple other folks asked, what's the status of VS4?

We have received the first round of comments from the SEC and would expect to file our First Amendment sometime next week.

When do we believe the final one will be filed?

Allows us to offer lower cost to customers, while we are improving our program margins right. So that's one of our big levers. Additionally.

So that's one of our big levers.

Additionally, the learnings we get as we execute these programs drive efficiencies. In other words, if we do one project and there's another one that comes along similar, it requires, a lot less work for us.

Additionally, the learnings we get as we execute these programs drive efficiencies in other words, if we do one project and there is another one that comes along similar it requires a lot less work for US Okay, and importantly has a higher probability of technical success, which our customers absolutely love rights.

Okay.

And importantly, it has a higher probability of technical success, which our customers, absolutely love, right?

So if you're thinking of this, you know, doing a biotech project, your number one concern, really is, is this thing going to work at all?

Thinking of doing a biotech project. Your number one concern really is is this thing going to work at all and so better outcomes like this for customers drive downstream value share for ginkgo, which again flow through at very high incremental margins, which I'll talk about in a minute but.

And so better outcomes like this for customers drive downstream value share for Geico, which, again, flows through at very high incremental margins.

I'll talk about in a minute.

But scale is just one part of the equation. We also can adjust the types and structures of the programs we choose to take on so we can for example, adjust the risk sharing between us and our customers on program success right. So we can choose to prioritize upfront fees rather than downstream value share when we negotiate our deals and these deals tend to be relative.

But scale is just one part of the equation.

We also can, adjust the types and structures of the programs we choose to take on. So we can, for example, adjust the risk sharing between us and our customers on program success, right?

So we can choose to prioritize upfront fees, rather than downstream value share when we negotiate our deals.

And you know, these deals tend to be relatively custom.

Custom in that case, we would give up some long term upside, but generate more cash and margin in the near term right. So there are a number of variables that can go into this decision.

In that case, we'd give up some long term upside, but generate more cash and margin in the near term, right?

So there are a number of variables that can go into this decision, you know, which way we just, swing this, you know, the type of customer and program, our view on the likelihood of the program success, market conditions, our cash needs at the company, right?

The swing is the type of customer and program our view on the likelihood of the program's success market conditions, our cash needs at the company right and so the macro environment today more challenging on capital raised let's say nine months ago. So it's nice to have the option in our deal structuring to lean into upfront payments to preserve our margin of safety and accelerate our push to profit of.

And so that, you know, the macro environment today, you know, more challenging on capital raise than say, nine months ago.

So it's nice to have the option in our deal structuring to lean into upfront payments to, preserve our margin of safety and accelerate our push to profitability.

Another lever we have is program choice, right? So we can direct our sales team or sales efforts towards programs with a higher probability of success or lower expected effort, right?

<unk>.

Another lever we have is program choice right. So we can direct our sales team our sales efforts towards programs with a higher probability of success or lower expected effort right. So within our code base. We can like I said pick projects that are kind of similar to ones. We've done before and we've had promising traction with our customers by introducing cell development test.

So within our code base, we could, like I said, pick projects that are kind of similar to ones we've done before, right?

And we've had promising traction with our customers by introducing cell development kits. These are, you know, CDKs, it's our analog to SDKs, software development kits, which are used by programmers to more easily develop new software apps.

CDK is it's our our analog to SDK is software development kits, which are used by programmers to more easily develop new software apps and the great thing about about.

And the great thing, you know, about CDKs is sort of distinct from the physical scale where we're getting lower costs by building bigger facilities, right?

CDK is sort of distinct from the physical scale, where we're getting lower costs by building bigger facilities alright, we can lean into these more standardized programs that have and have more consistent program cost coverage. Okay. So by encouraging customers growing the rest of the CDK is it makes our business a little more standardized outlook.

You know, we can lean into these more standardized programs that have, and have more consistent program cost coverage, okay?

So by encouraging customers to go in the direction of these CDKs, it makes our business a little more standardized.

Now, look, this is a balance, okay?

I'll be honest about this, right?

This is a balance okay I'll be honest about this right. So so more standardization means we might not be able to take on a certain customer project like Oh, if it doesn't fit into our standard rubric, we can't do it. So we have to weigh this against the value of a particular customer and that program, they're asking for it. So maybe a really important customer with a very valuable program is coming in but it's a total custom.

So more standardization means we might not be able to take on a certain customer project. Like, oh, it doesn't fit into our standard rubric, we can't do it.

So we have to weigh this against the value of a particular customer and that program they're asking for.

So maybe a really important customer with a very valuable program is coming in, but it's a total custom job. We probably, you know, we still want to do that program, right? So you won't see this as like a light switch kind of lever, but it is a knob we can tune.

Job, we probably we still wanted to that program. So that you won't see this as like a light switch kind of lever, but it is a knob, we can tune and I think you will see us getting a lot of value coming out from driving in the direction of more standardized programs.

And I think you will see us getting a lot of value coming up from driving in the direction of more standardized programs.

I'll note that one area, where we don't have a great lever is the timing of downstream value share.

I will note that one area where we don't have a great lever is the timing of downstream value share.

Obviously, we can't control the timing of SEC review, but, still expect that we'll be closing in the third quarter.

And out of our control in many ways due to customers needing to bring products to market to get royalty gives us royalties are running manufacturing Ron to give us a milestone payment. This is a key component of our business in both the short and long term I do know it is frustrating to folks that are sort of trying to model. Our revenues. So you can see the short term impact just this quarter.

That's often out of our control in many ways due to customers needing to bring products to market to give us royalties or run a manufacturing run to give us a milestone payment.

This is a key component of our business in both the short and long-term.

And I do know it is frustrating to folks that are sort of trying to model our revenues.

But obviously, at this point, can't provide a precise date, but we'll update folks as that goes.

So you can see the short-term impact just this quarter, as Mark mentioned, we had a Chronos milestone and we have increased boundary revenue, right? We have also have additional, customer milestones expected in the second half of this year.

<unk> as Mark mentioned, we had a microdose milestone and we have increased foundry revenue right.

Also have additional customer milestones expected in the second half of this year and while we are confident we will hit those sort of downstream value share milestones any slipping on timing would lead to lumpiness in our revenues. So I think this trade is worth it in general having downstream value share being a big part of our business that can go we will do our best to predict.

And while we're confident we'll hit those sort of downstream value share milestones, any slipping on timing would lead to lumpiness in our revenues. So I think this trade is worth it in general, having downstream value share being a big part of our business at Ginkgo.

You know, we'll do our best to predict DVS when we know it's coming soon, but I do ask that you bear with us on it in the short-term.

Eventually, I expect this lumpiness will smooth out, right?

<unk> when we know it's coming soon but I do ask that you bear with us on it in the short term eventually I expect this lumpiness will smooth out right as we get as many programs are coming to maturity. We can take advantage of a portfolio effect right in other words, when we have enough programs that if one downstream value event happens. Later, then we expect another could finish early to make up for it.

As we get as many programs are coming to maturity, we can take advantage of a portfolio effect, right? In other words, when we have enough programs that if one downstream value event happens later than we expect, another could finish early to make a up for it.

And last thing on this topic, we're aligned with the market in emphasizing profitability, we will have more specific updates for you in the coming quarters on this topic.

And last thing on this topic, we're aligned with the market and emphasizing profitability. We will have more specific updates for you in the coming quarters on this topic, but we think our business model flexibility. These levers I'm talking about will enable us to achieve our long term profitability goals and we do have the runway to figure it out so I'm happy about that okay. So I wanted to wrap.

But we think our business models flexibility, these levers I'm talking about will enable us to achieve our long term profitability goals.

And we do have the runway to figure it out.

All right.

On something that's really important to me and to our team, which is ESG environmental social and governance. So forgive go ESG is not like I mentioned, a box checking exercise like just getting a report out the door to you know to make somebody happy is core to our business strategy right and so we just are now released our inaugural sustainability report carrying it can go last.

So I'm happy about that.

Okay, so I wanted to wrap up on something that's really important to me and to our team, which is ESG, environmental, social and governance. So for Ginkgo, ESG is not, like I mentioned, a box checking exercise, like just getting a report out the door, you know, to make somebody happy is core to our business strategy.

Right.

So the last question here is for you, Susan.

And so we just announced, released our inaugural sustainability report, Caring at Ginkgo last month, I really encourage you to give it a read.

There are two that are related.

I really encourage you to give it a read it as a first step for us, but we want to show people, how we think about ESG and for US It's about care right, we care about people and the planet and we care about how our platform is use this shapes our decision, making our ginkgo and we believe it will become even more important as our platform grows more impactful over time.

It's a first step for us.

So, Costa Michaelides wants to know how long till I can code up a full-on fire-breathing dragon in my garage?

Because then I can launch my dragon-toasted bagels business.

And then Chris Oswald would like to know if he can be the first one to fly.

Yeah, so 20 years. Yeah.

But we want to show people how we think about ESG.

Yeah, that's that's cost.

Are you making?

Are you making Chris, a promise?

Defer to our head of code base, Patrick, the man who's designed more synthetic DNA than, anyone on planet Earth.

Patrick, what's what's your what's your estimates on on Dragon?

A lot of plus or minus five years to that estimate, if not some error bars.

So we've been really fortunate throughout our history as a private company to have really great investors in Gainesville, and one of the reasons I wanted to be so vocal about our mission and priorities is to ensure that the people who choose to allocate capital towards ginkgo today are aligned with those priorities and I've been really heartened by some of the amazing investors has come on board as we went I think it went public and since we've been.

So what did you say Jason?

20 or 25?

25 years, Casa will be able to code up a full fire breathing, dragon in his garage.

And Chris is going to be able to be the first one to fly a dino or you're going to reserve that, right?

Public and I wanted to share this letter that I got a couple of months ago from a very large fund manager who has done really an incredible job integrating sustainability into their investment thesis writes I'll highlight a few bits right. So they're talking about their process. It avoids reliance on external scoring systems, which I think is great in favor of integrating sustainability analysis with long term fundamental analysis.

Just to try to get superior performance for their investors with this context in mind, we'd like to thank you again.

And for us, it's about care.

I think we'll have to have a charity auction for who gets to charity auction.

For the example, you setting as a company that understands the intertwine nature of sustainability and strategy. We also note your proactive approach to employee ownership and voting structure and you're far ranging work to develop an ethos of care throughout the company and the broader field, though for some investors that type of letters and administrative process for our team it's a core investment process.

All right.

You heard a job here at Ginkgo.

We have a yeah, if you want to fly, be the first one, on the dragon.

You should be working here.

Makes it makes it makes a dinosaur flying dinosaurs.

Right?

Yeah, you know, make the dinosaur.

We care about people and the planet.

All right.

The attention of highlighting the potential for long term value creation for all stakeholders. So I did want to share this.

Well, I know we're about out of time here.

And everyone spent a lot of a lot, of time with us today learning about the business.

We've gotten things like this is not a niche investor.

My view sustainability is becoming absolutely mission critical to business strategy coming up and we're proud that we've always had a focus in this area I can go.

And we care about how our platform is used. This shapes our decision making at Ginkgo. And we believe it will become even more important as our platform grows more impactful over time.

So the sustainability report outlines our approach to ESG first we focus on the impact of cell programming in other words, how our programs and platform can have a positive environmental impact, but we also recognize that technology is not neutral and we seek to play a positive role in society with our tech and our governance model contends that owners.

So we've been really fortunate throughout our history as a private company to have really great investors in Ginkgo.

So just want to say a heartfelt thank you to everybody for joining us today and spending your time learning about Ginkgo.

<unk> is the first step to cure and we highlight our commitment to employee ownership. It can go which I believe is critical to building a valuable company that also cares about its impact in the world. Okay. So I'll go through each of those three alright, so first on impact.

And one of the reasons I want to be so vocal about our mission and priorities is to ensure, that the people who choose to allocate capital towards Ginkgo today are aligned with those priorities.

Jason, I don't know if you have any parting thoughts, but but we're wrapping up wrapping up the day here and look forward to being able to host you guys in person hopefully next year.

So you can often get caught up and reporting basically about all the bad things that companies are going to start doing less of right. So we're going to do less pollution <unk>, here's how we're doing waste reduction and we do cover that in our sustainability report I encourage you to read it we've done a lot of work on waste recycling laboratory generate a lot of waste.

And we've got companies actually reach out to ask US about this program, but for US the real point of this is the direct.

And I've been really heartened by some of the amazing investors who's come on board as Ginkgo went public and since we've been public.

Yeah, thanks, everybody, for the time today.

Impact of what we do with our platform. Okay and this distinction is very important to me look limiting the negative externalities of companies, while they deliver or other products and services is important right. We should keep pressuring companies to reduce waste right, but but what about the companies whose products and services actually deliver ESG pause.

Really, it's wonderful to have a chance to speak with you all.

<unk> directly right things like vaccines things like carbon capture rate corporations are some of our most powerful tools in society to develop new technologies that could help address these sort of ESG challenges.

We should be encouraging that right that's more impactful than just cutting out the negative we have to also be building the positive right and so my view bioengineering in particular is a key technology that will be capable of solving some of our biggest challenges.

We just announced that we raised a 78 million dollar Series A to launch Archaea to change, the value chain of the beauty industry.

The beauty industry is inspired by creativity and always looking for new ways to be able to express ourselves.

On this front and a couple of recent pieces of U S legislation I think very nicely highlight this so just last week President Biden sign the chips and Science Act as I mentioned in our July call about Zymogen acquisition I strongly believe on a personal level that we should be investing in critical technologies in the U S and our acquisition of Zymogen helps keep buyer.

And I wanted to share this letter that I got a couple of months ago from a very large fund manager who's done really an incredible, job integrating sustainability into their investment thesis.

Right.

There's a tremendous opportunity to change our supply chain and to also create ingredients and products that are aligned with modern consumer values.

So I'll highlight a few bits.

I'm Jasmine Agonovic and this is Ginkgo Ferments.

Foundry is growing in the U S right like we're having this issue, which if we're trying to bring chip boundary back we should just not lose the bio foundries to begin with and that's one of the reasons I think this acquisition is so important that we're doing this new bill is great on those fronts right. It explicitly calls out synthetic biology as a key technology focus area for example, National Science Foundation funding.

Right.

Welcome back, everybody, from lunch.

So they're talking about their process.

It avoids reliance on external scoring systems, which I think is great, in favor of integrating sustainability analysis with long-term fundamental analysis to try to get superior performance for their investors.

With this context in mind, we'd like to thank you, Ginkgo, for the example you're setting as, a company that understands the intertwined nature of sustainability and strategy.

Further chips direct agencies across the federal government to support research and engineering biology, and directs the Whitehouse Otp opposite science and Tech policy to establish a national genomic sequencing strategy to ensure that engineering biology research fully leverages plant animal and micro biodiversity.

I'm super excited about this session.

Super exciting to me so taken together chips is a strong indication that synthetic biology is viewed as critical infrastructure and a likely source of future investment by the U S government.

Also last week Congress passed the inflation reduction act again on a personal level I was thrilled to see Congress take action on climate change, especially around carbon capture the bill increases values for 40, <unk> tax credits, which could catalyze the emergence of a sustainable carbon capture industry in the U S. This is essential if we hope to meet emission reduction targets.

We believe synthetic biology will be among the central solutions here is already playing a role in industrial capture and direct air capture is also a significant future opportunity in other words, Colin carbon out of the atmosphere and as you heard in our recent announcement of the Bayer transaction. There are specifically focused on carbon sequestration as an area for future programs and AG biologicals.

And <unk> for a minute biology is really good at making carbon carbon bonds like I was a chemical engineer, it's much better than we can do with synthetic chemistry, so you'd look out the window right now and its happening on a plant using biology is the only scalable direct air capture Tac from my standpoint that we have today and we should lean into it okay.

Okay.

Another area of impact for us. It can go is in bio security and look if we're going to achieve our mission of making biology easier to engineer, while caring about the impact of our platform in the world, we need to build robust bio security infrastructure. So by analogy right, Google would invest in cyber security ginkgo needs to invest in Biosecurity and while we are proud of the business we built over.

The last two years during Covid, it's important to recognize that it was only possible because of the years of investment we've been making in this space is Bloomberg story from 2018 cover some of our previous government programs to identify DNA sequences that may have been engineered or that are a pathological concern. We participated in a number of key government studies you can see them there on.

The rights.

On bio security and Biodefense and have been honored to sit on a number of government panels and committees.

Our testing efforts in K 12, and other congregate settings allowed us to build the infrastructure to serve more than 5000 organizations and process more than 10 million samples via our lab network and logistics operations. We've been expanding on this foundation, we worked with the CDC and express Jack to pilot a traveler based COVID-19 genomics surveillance program.

At certain U S. Airports you may remember, we talked the first sequences for two and three in the U S. Earlier this year from the program and we are very excited that just this morning, we were able to announce that we were awarded a new contract with the CDC to expand this program to the contract could exceed $61 million overall pending CDC priorities and we believe.

Represents just the first step in the U S government's investments in robust ongoing bio security by a proactive monitoring for infectious disease. We've also diversified our biosecurity business globally and across different pathogens with recently announced partnerships in Qatar and Rwanda and novel assays for pathogens like Monkey pox, along with multiplex assays that can occur.

Multiple pathogen targets at once it's early days here.

So while the airport monitoring a year ago, we started a pilot it and so I'm excited to see where all of these new initiatives will go in the coming year.

We're going, to hear a bunch of lightning talks from developers that are building new applications on top of Ginkgo's platform.

And I want to take a minute to introduce the person you've been hearing from all morning, Jake Wintermute down here, who is our new developer evangelist, the new role here at Ginkgo Bioworks.

We're focused on the impact of our platform both in the opportunities that can create as well as our responsibility to handle our platform of care those who build technology has significant power and therefore have.

Our responsibility to share that power for the benefit of society in their communities, we focus on internal and external diversity equity and inclusion and partner with diverse suppliers in our supply chain in other words, we use our leverage of the buyer to drive diversity upstream and downstream of us and engaged in a number of partnerships and initiatives to continue contribute to our communities and you can see.

Some of them here.

Finally, I'm personally really excited about our governance model I can't go our view is that a workforce with strong equity ownership will make the wise decisions needed to build long term value for our company and importantly to build a company whose impacts they are actually proud of right. The analogy I like is that homeowners tend to care for their homes and sort of a more careful.

We also note your proactive approach to employee ownership and voting structure and your far-ranging work to develop an ethos of care throughout the company and the broader field.

So for some investors, this type of letter is an administrative process.

For our team, it's a core investment process with the intention of highlighting the potential for long-term value creation for all stakeholders.

So I did want to share this.

<unk> richer way than a landlord would right both are owners of the house, but it's a different it's a different mental model right. We want a bunch of homeowners homeowners here I can go and Thats why we lean heavily into equity compensation and have also implemented a multi class stock structure that permits all employees current and future not just founders of the company to hold high vote <unk>.

You know, we've gotten things like this.

It's not a niche investor.

In my view, sustainability is becoming absolutely mission critical to business strategy coming up.

And we're proud that we've always had a focus in this area at Ginkgo.

So the sustainability report outlines our approaches to ESG.

<unk> common stock, we believe our multi class stock structure will help maintain the long term mentality, we have benefited from over the years as a founder led company here. It can go and that a team full of equity holders helps align our team with the long term interest of our outside investors as well in other words.

Equity just like you do we pair this ownership structure with a very strong board comprising experienced and diverse individuals I mentioned earlier, we're excited to add.

A round of applause for Jake, and he'll be emceeing this session today.

To add Doctor, Kathy I'll think I'll hand, it to our board and I am pleased to extend again, a warm public welcome to Kathy on board really honored to have you joining us on the board Kathy.

So take it away, Jake.

All right.

Okay. So once again I would like to end on this slide people forget that when they invest it influences how the world develops if we want to see impactful technology platforms come into the world with Terror, we need to look for companies that are structured to burst the control of those platforms in real people that care, alright, and if we want to see.

First, we focus on the impact of self-programming. In other words, how our programs and platform can have a positive environmental impact.

Yeah, I know what you're thinking.

Then we also recognize that technology is not neutral, and we seek to play a positive role in society with our tech.

And our governance model contends that ownership is the first step to caring.

And we highlight our commitment to employee ownership at Ginkgo, which I believe is critical to building both a valuable company that also cares about its impact in the world.

Okay.

First session after lunch, low energy.

Solutions to societal challenges and ESG like climate change and pandemic diseases, we need to invest in companies attacking those challenges directly the world is facing challenges that are big and that and as a result quite valuable coming up I'm hopeful we're in a moment when capital can really align behind companies that are doing meaningful things and do vary.

No, no, we're not doing that.

This session is, special because Ginkgo is not the star.

So I'm going to go through each of those three.

Well financially doing that we should invest in the world. We all want to see exist I'm happy to take your questions. Thanks, great. Thanks, Jason Thanks to Q&A in a few moments.

All right.

Right now, our developers are the stars.

So first on impact, ESG can often get caught up in reporting basically about all the bad things that companies are going, to start doing less of, right? So we're going to do less pollution, less GHG. Here's how we're doing waste reduction.

I'll start with a question from the public and remind the analysts on the line that if they'd like to ask a question. Please raise your hand and I'll call on you and open up your lines. Thanks, everyone.

And we do cover that in our sustainability report.

We're going to be hearing from some very cool companies that use Ginkgo's platform to create their own products with biotechnology.

Great. Thanks.

Thanks, everyone again for joining us as always I'll be starting with a question from.

I encourage you to read it.

We've done a lot of work on waste recycling.

Laboratories generate a lot of waste.

And we've had companies actually reach out to ask us about this program.

The public and then again I see lots of Factset hands raised.

But for us, the real point of this is the direct impact of what we do with our platform.

Now, I know the relationship between a platform and a developer can be complicated.

And if I can answer the first question comes from Twitter from <unk>.

Okay.

Okay?

There are two questions here I'll throw them together, so how does the second contract outlook look beyond 2022, both within the you asking around the world and how are we scaling the concentric infrastructure to move beyond COVID-19, but golf and timeline are we looking at to achieve that.

I think I can capture it with this metaphor.

Are there any nerds in the audience?

Yeah.

Yeah, I can take that one so.

Yes first of all I'll say I've been hearing sort of like beyond COVID-19 for a couple of years now.

I think the reality is that Covid is going to remain something that for a lot of people you have folks that are immunocompromised folks with obesity elderly.

People that are just not they're not going to want to get COVID-19 this year or several years from now and.

And that's before you get to the wildcard of new variance right. So I do think that is.

That's been a moving bar.

So again I know, it's political and the whole thing, but it's something to keep an eye on it and it's not quite as simple as like a big black and white shift.

In terms of where I think things are going I think there are two things one I think we're going to see a move from active to passive monitoring so the place where ginkgo is playing primarily.

In the space of bio security today is in essentially regular monitoring of infectious disease Ryzen is what we're doing in schools is what we're doing now and the CDC program in the airports as well.

And eventually that should start to look like a smoke detector basically it would be the analogy right something that it's kind of monitoring, but not requiring you to do a lot today, it's like putting a two chip in your nose and dropping it into a.

<unk> been walking away. So it's not the most annoying thing, but its still doing something so so that's one direction I think kind of passive monitoring, particularly in places like ports of entry congregate settings like schools is ultimately going to feel like a no brainer.

But those technologies do need to get built up.

The other second area is international expansion and so you've seen this.

With our announcements in Qatar and Wanda, we would love to do more internationally I think youll see us continue to do that if you're tuning in today.

From a international public health, we'd love to talk to you. So I think that that's the second area, where I think youll see us continue to grow.

And this distinction is very important to me.

Any nerds?

Okay. Thanks, Jason Alright, Matt Thanks from Goldman Sachs I'm I'm getting airlines. Please go ahead.

Okay.

Yeah.

Okay.

Yes.

Hi can you hear me.

So look, limiting the negative externalities of companies while they deliver other products and services is important, right?

You know who you are.

Yep.

Great. Thanks for taking my questions.

Okay. So maybe the first big picture one for you you talked about sort of the secular growth trend of externalization of R&D and manufacturing.

And you've talked in the past about going after larger companies competing against internal R&D.

Segments and people in that area.

I guess I'm wondering in terms of.

One concern those customers might have a lot of IP has generated intended or unintended and those R&D and manufacturing process by those customers, how do you get comfort with those potential customers.

They might lose that IP and how can you transfer that or how can you make them comfortable with that because I would think that would might be but initial barrier towards externalization of R&D, we're going forward.

We should keep pressuring companies to reduce waste, right?

You know who you are.

Yeah. So this is a super good topic and so the first thing I do want to point out is I think there are trends both in externalization of R&D and external innovation in manufacturing and <unk> focus is really around that extra realization of R&D. Okay. Right. So we are we are and we're excited to see the actualization of manufacturing, we love to work with contract manufacturers and so on but our focus.

Okay.

So these companies, they're Frodo Baggins and we're Samwise Gamgee.

They're Batman and we're Alfred.

Any nerds?

They're Princess Leia and we're Chewbacca.

But what about the companies whose products and services actually deliver ESG positives directly, right?

Things like vaccines, things like carbon capture, right?

Really on the on the R&D side.

You bring up a great point I mean this is a conversation we have around every partnership we do frankly around how the intellectual property should work.

Corporations are some of our most powerful tools in society to develop new technologies that could help address these sort of ESG challenges.

We should be encouraging that, right? That's more impactful than just cutting out the negative.

Particularly I think there's two pieces to it one is do I even trust.

You know, we have to also be building the positive, right?

And so my view, bioengineering in particular, is a key technology that will be capable of solving some of our biggest challenges, you know, on this front.

And a couple of recent pieces of US legislation, I think, very nicely highlight this.

So just last week, President Biden signed the Chips and Science, Act.

Were happening outside of my four wall, if it's on something sensitive like a new project and I think this would have been a similar concern in the early days of cloud computing like do I want to put my data and someone elses server, it's totally and secure yada yada.

There is a cycle there are just creating comfort around that security of the asset. Okay. So that I think if we can get to just with time.

The second one is dingo has us as an approach which is we want to retain the reuse rights to the intellectual property.

As I mentioned in our July call about the Zymergen acquisition, I strongly believe on a personal level that we should be investing in critical technologies in the US. And our acquisition of Zymergen helps keep biofoundries growing in the US, right?

Like we're having this issue with chips. We're trying to bring chip foundries back.

We should just not lose the biofoundries to begin with.

It is developed on top of our platform not for Europe .

Products customer that we're working with but for other things that arent competing with that product.

At the end of the day, we actually think that that is a net good for the customer in their sector because in biotech. We believe as we look across the industry. We see a lot of IP, which is siloed in many companies that could be helpful to the others, but the transaction costs associated with that or bananas, right and so so well.

We are able to do is use the leverage of our platform to force, an IP regime, where they're sharing amongst customers again not for their products, but for other products and.

It's a different way to look at things honestly I think it's how software basically played out you see an enormous amount of kind of low level code reuse across software as one of the reasons that that industry developed so quickly and frankly, I think biotech needs to kind of grow up and move into a scheme like that but.

And that's one of the reasons I think this acquisition is so important.

This new bill is great on this front. It explicitly calls out synthetic biology as a key technology focus area for, for example, National Science Foundation funding.

Further, CHIPS directs agencies across the federal government to support research in engineering biology and directs the White House, OSTP, Office of Science and Tech Policy, to establish a national genomic sequencing strategy to ensure that engineering biology research fully leverages plant, animal, and micro biodiversity.

That remains a buy it in the main way we do it is by showing the value of all the existing code base, we have plus the scale of our platform to convince the customer to do it.

Adopt that IP regime, and so again, we're excited to see that with large customers like bare and others, but it is still a fight.

Got it and just one quick follow up maybe market help us maybe understand sort of mark to market on end market exposure by industry. It just kind of coming through some of the press release. It seems like there's been maybe an unintentional, but it pivot towards pharma and AG bio and I'm. Just wondering one what is the end market mix look like today in too.

How does the end market approach you have informed your program risk sharing decisions that you make in terms of when you toggle upfront versus downstream I would think in areas like Biopharma AG bio where theres been more successful traditionally with synthetic biology, maybe it might change your decision in terms of how you toggle that programmers sharing decision.

I can tell you that department.

No you go ahead and really the mix today.

Yeah. So in terms of mix today, when you look at the existing programs the current active programs.

It's pretty well balanced with growth as you've noticed and as we've discussed growth coming from the pharma and biotech sector and then we saw pretty good growth year over year in food and AG.

But we do see we have a pretty balanced customer much across end markets. When you look at our pipeline and sort of expectation.

Going forward Likewise, we still see that as being kind of pretty balanced.

The yeah, the way that we construct Jason why don't you the way that we contract in terms of downstream value share.

And upfront absolutely there is.

By industry and an even.

Depending on the particular customer.

Yeah.

Second point I think is the raw material on Mark right. So.

A lot of it is dependent on the <unk>.

Customers interest map more even than the industry and so I'd say no.

Filters on it our priority one is.

What is the customer sensitive one way or the other okay and you will find some customers some sort of one way you know maybe there really isn't that had a royalty if they want us to do a bunch of upfront payments or vice versa startup might be more instead and backend less upfront if their cost sensitive.

<unk>.

Then you have some companies that really don't care right and so they're sort of.

That's question number one and then question number two is what's getting goes current interest right are we getting a situation where we'd be based on market conditions or otherwise we would be more interested in cash in the near term are we feeling sort of well protected with a big margin of safety and we're more interested in optimizing for bigger hi.

High margin downstream value share in the future that comes after the customer one customer as a priority because it's still the number one priority is getting new customers on our platform every day and so so that.

Does that makes sense I wouldn't say, it's all much like this industry of that entry. It's early although I'd say there is general liens, probably more to do with customer size than the industry.

Yes, with the bigger ones more willing to pay more upfront than smaller ones, preferring a little bit more on the backside.

Got it thank you.

Thanks, Matt.

Right, super exciting to me.

That's what it means to be a platform.

So taken together, CHIPS is a strong indication that synthetic biology is viewed as critical infrastructure and a likely source of future investment by the US government.

Valerie Brown William Blair Your line now.

Also last week, Congress passed the Inflation Reduction Act.

Again, on a personal level, I was thrilled to see Congress take action on climate change, especially around carbon capture.

The bill increases values for 45Q tax credits, which could catalyze the emergence of a sustainable carbon capture industry in the US. This is essential if we hope to meet emission reduction targets.

Okay.

We believe synthetic biology will be among the central solutions here.

Hey, good afternoon.

Another area of impact for us at Ginkgo is in biosecurity. And look, if we're going to achieve our mission of making biology easier to engineer while caring about the impact of our platform in the world, we need to build robust biosecurity infrastructure.

It's already playing a role in industrial capture and direct air capture is also a significant future opportunity. In other words, pulling carbon out of the atmosphere.

Biology is the only scalable direct air capture tech from my standpoint that we have today, and we should lean into it.

So 13 programs added in the quarter and sticking with <unk> 60 for the year could you maybe just describe sort of what the line of sight as to that number and as you're having conversations with folks contemplating coming onboard are there any customer categories by sector that are proving perhaps more or less sensitive to the macro uncertainty.

Right now.

Yeah, So I can speak to the second part.

You may ask you to vote, but but in terms of.

I would say how the macro uncertainty is affecting things I think one I do think like generally you are seeing less R&D dollars spent right like a lot of small biotech and the pharma industry would be cutting.

Programs, two and three in their pipeline right now and sort of like doubling down on program number one well that ends up hurting kind of the service providers that would be providing any any sort of research services into those programs two and three and those are like that that can affect that ginkgo I would say.

The flip side of that is stuff like we saw with severity eyewear market pressures can also encourage companies to make that transition to move from having.

And in house capability to really pushing that external that's a very nice to me that the more important trend long term for us even if we see some headwinds on kind of individual R&D budgets in the near term I'd, probably take that trade I think by and large the much bigger issue for US is that 99% of cell engineering is still just done in house.

And so that's really what the battle on fighting I would say.

The and then and then sort of path so yeah.

No update to that.

We are.

Continuing to scale in sales and I think you might see us focus a little bit around well I don't know if its a good its a good question I mean, I think we're seeing we're seeing good progress with start ups. We are seeing good progress in pharma I kind of agree with market its pretty spread around markets. It's not like one certain areas on fire relative to others. So yes.

Can you give a little bit more color, Matt just in terms of like how we think about the past 60 days so the.

There's really kind of three tiers almost when you were to look at our pipelines. So first of all we've got existing customers that have already.

In effect earmarked money for Gainesville programs, but we haven't yet defined that program nor have we launched that program and so that's money that's committed to ginkgo.

But we still haven't launched the program in that so that's a source of new program growth in the future.

The second would be an existing customer.

There we they haven't yet your March money for a program.

But we're in a conversation with them about what the what the next program could look like and so.

So all of that sort of broadly speaking falls into the category of.

Really just.

Expanding our presence within an existing customer and then and there.

Or.

Sort of.

Order of ease with which or confidence with which we can land a program in the quarter.

And then the third tier would be a new customer that has never done a program with us before.

And so we have a pretty significant pipeline of conversations like that but that's the hardest to land in the least predictable to land in a particular quarter because.

First of all we have to establish the beginning of a relationship and then we have to define a program and then launched that program in a quarter. So that's sort of how we think about it and it's less about kind of industry I would say I wouldn't say, we have a significant amount of effort across sort of all the industries.

We play in that but we.

We may devote more effort to one or two.

To a particular sort of tier just based on sort of how quickly we can get a program launched.

Okay, and then Jason has a follow up.

Third the merging of Bayer transaction, but both are totally different.

Different both involve harnessing capabilities or formerly internally focused at each company and leveraging them with your assets.

Turning them external so just kind of curious neither are closed.

But you referenced outside interest in the XI emerging sale or spin out that's potentially what kind of outside interest or kind of industry chatter customer chat or have you heard about.

Assets under your Hood, and how customers might view working with you differently than perhaps it had before.

Yeah, I don't know Andrea do you want to speak to that for now you're sure yeah.

Honestly.

Deals haven't closed yet so we don't want I cant.

Speak for Diamondback.

Certainly we've been speaking with our customers about both transactions.

Yes.

Obviously about both the expansion of capabilities as well as that and the strengthening of our of our platform.

In terms of the impact.

Interest you referenced relative to the product portfolio that that's about as much as we can and should say at this point, but.

But certainly.

And real interest and and an opportunity to add to theater show value there.

Okay. Thank you.

Thanks.

Alright.

With the with our bare asset I think what's really exciting about that is.

They had an in house team that was.

No.

Maybe you know this is a group that was originally acquired as a company got aggregate. These are folks that have been doing this for 10 15 years in the AG biologic space real domain experts and they have a lot of assets things like again, I mentioned manufacturing and <unk>.

Formulation, all that sort of stuff, but they also just know where the things that have worked and not worked and AG biologicals over the years and so their domain expertise than with our leverage of our automation robotics to sort of see that I think that becomes a really compelling story. So that's why we think thats pretty exciting about Kurt is that just facing an hour that is part of it. It's also speeding it up.

Am I, putting it on top of again goes platform. So I think together, it's pretty cool and there's nothing like it in my view on the market.

Yeah. Thanks Steven.

By analogy, Google would invest in cybersecurity.

We got to play that supporting role well.

Alright, and came to us from Morgan Stanley I think Youre right.

Ginkgo needs to invest in biosecurity. And while we're proud of the business we built over the last two years during COVID, it's important to recognize that it was only possible because of the years of investment we've been making in this space.

We want to empower these heroes so that they can go out and save the world, and we can always be here with the biology that they need to do it.

The first developer we'll be hearing from is Jasmina Aginovic. She's the CEO of Archaea, where they are building an ingredient platform for beauty. A new category of ingredients powered by biotechnology.

This Bloomberg story from 2018 covers some of our previous government programs to identify DNA sequences that may have been engineered or that are a pathological concern.

Please welcome Jasmina.

Thanks, Jake.

Hi, Good evening can you hear me okay.

We've participated in a number of key government studies, you can see them there on the right, on biosecurity and biodefense, and have been honored to sit on a number of government panels and committees.

Perfect.

So maybe one on on Biosecurity, Jason or perhaps even longer.

Have you given a samples per week sort of run rate exiting the quarter I know you've given that in the past just so that we can get a better sense of how things are trending through the year you.

You did about $250 million year to date in revenue your guidance sort of at least $2 60. So just curious as to what the exit rate was and perhaps Jason on your point on concentric and the $60 million plus that it could accrue over time any sense of.

From the new CDC contract that is I'm, just curious as to any sense of the timeframe for that revenue to come in.

All right.

Yes, I'd be happy to do it.

Part of the question, yes, So I think the best way to think about it is Q1 was very strong in the business to a large extent was really hitting on all cylinders across the states that were contracted in both April and May were strong.

That is an excellent, excellent analogy.

So excited to be here to be, sharing Archaea with you.

Special day yesterday.

So we officially announced our series A, so $78 million to start this company to change the entire value chain in the beauty industry, right?

Really amazing.

And it's also really incredible to think about the types of partners that we have. So partners who are deep experts in various parts of the value chain.

So finished product, we have iconic brands, of course, like none other than Chanel, right?

So to understand Archaea, we need to back up a little bit.

It's hard to compare to a brand like that.

At least two years ago to when I joined Ginkgo as an entrepreneur in residence.

Givadon, incredible, also iconic ingredient company.

And so a lot of people have asked me like, entrepreneur in residence, what is that?

And then fantastic partners with Ginkgo, Viking, Cascade.

What, did you do?

So I feel so fortunate to have such incredible partners alongside to do this tremendous thing.

And today is actually like pretty cool to be doing this for me personally because my first job in the beauty industry, I've told a few people here so they already have the spoiler, but my first job in the beauty industry was at a brand called Fresh, which is an LVMH-owned brand. And their office was literally right across the street from this building.

So it's an amazing full circle moment for me. And I want to tell you why it's like especially impactful to think about, you know, the start of my career and then also the prospect of what Archaea is doing.

And then the first half of June in effect performed as we would've expected it to but then you see a very significant fall off as the school season.

And so you end the quarter.

Our testing efforts in K-12 and other congregate settings allowed us to build the infrastructure to serve more than 5,000 organizations and process more than 10 million samples via our lab network and logistics operations.

The contract could exceed $61 million overall, pending CDC priorities, and we believe represents just a first step in the U.S. government's investments in robust, ongoing biosecurity via proactive monitoring for infectious disease.

We've also diversified our biosecurity business globally and across different pathogens with recently announced partnerships in Qatar and Rwanda and novel assays for pathogens like monkeypox, along with multiplex assays that can assess multiple pathogen targets at once.

Or the latter half of June that really sort of a de minimis level of testing indicated 12 market now we have some testing that happens outside indicators as well as market.

It's early days here, but, you know, so was airport monitoring a year ago when we started to pilot it, and so I'm excited to see where all these new initiatives will go in the coming months, coming year.

Okay, we're focused on the impact of our platform, both in the opportunities it can create, as well as our responsibility to handle our platform with care. Those who build technology have significant power, and therefore have a responsibility to share that power for the benefit of society and their communities.

We focus on internal and external diversity, equity and inclusion, and partner with diverse suppliers in our supply chain. In other words, we use our leverage as a buyer to drive diversity upstream and downstream, of us, and engage in a number of partnerships and initiatives to continue to contribute to our communities, and you can see some of them here.

Finally, I'm personally really excited about our governance model at Ginkgo. Our view is that a workforce with strong equity ownership will make the wise decisions needed to build long-term value for our company, and importantly, to build a company whose impacts they are actually proud of.

Thanks.

The analogy I like is that homeowners tend to care for their homes in sort of a more careful, richer, way than a landlord would.

Both are owners of a house, but it's a different mental model.

We want a bunch of homeowners here at Ginkgo, and that's why we lean heavily into equity, compensation and have also implemented a multi-class stock structure that permits all employees, current and future, not just founders of the company, to hold high vote class B common stock. We believe our multi-class stock structure will help maintain the long-term mentality we have benefited from over the years as a founder-led company here at Ginkgo, and that a team full of equity holders helps align our team with the long-term interests of our outside investors as well. In other words, they own equity just like you do.

We paired this ownership structure with a very strong board comprising experienced and diverse individuals.

I mentioned earlier, we're excited to add Dr. Kathy Hopinka-Hammond to our board, and, I'm pleased to extend, again, a warm public welcome to Kathy on board.

Great.

Really honored to have you joining us on the board, Kathy.

Thanks, Jason.

Relatively small that was more kind of study.

Once again, I would like to end on this slide.

We'll switch to Q&A in a few moments.

People forget that when they invest, it influences how the world develops.

If we want to see, impactful technology platforms come into the world with care, we need to look for companies that are structured to vest the control of those platforms in real people that care.

Yeah, we're expecting the same really in terms of July and August and then September is more of an unknown for us, but the exit rate in the quarter just to answer your question I mean, we saw as we expected a very significant falloff because this deals just don't have need for testing through the summer months.

If we want to see solutions to societal challenges in ESG, like climate change and pandemic diseases, we need to invest in companies attacking those challenges directly.

The world is facing challenges that are big, and as a result, quite valuable coming up.

I'm hopeful we're in a moment when capital can really align behind companies that are doing meaningful things and do very well financially doing that.

We should invest in the world we all want to see exist.

I'm happy to take your questions.

As usual, I'll start with, a question from the public and remind the analysts on the line that if they'd like to ask a question, please raise your hands on Zoom, and I'll call on you and open up your line.

So I'm technical by background.

Got it and as a reminder, when we what we've been doing I think will at least here for a bit on the Biosecurity side is just given it's a political we all understand that.

Thanks, everyone.

I got my degree at MIT in chemical and biological engineering. It was not that long ago.

But even walking into Ginkgo and looking at this thing here that Carmen is looking at, these are little tiny fermenters.

It's like a robot that do it all kind of in high throughput, super automated.

I didn't even have that in school.

Great.

And man, do I wish with some of my chemi classes that we were working off of these babies instead of what we had in school.

Thanks, everyone, again, for joining us.

As always, I'll be starting with a question from the public, and then, again, I see lots of folks, with hands raised, so I'll unmute your line in a second.

So we've been conservative in our guidance and say tell you all what we kind of know we have.

Have a sense. So we havent good shot of hitting but everything else be to the upside and so we've done that for a few quarters now and I think.

That served us well.

To be realistic about that kind of situation on the ground with physicals and Covid got.

So, my entrepreneur-in-residence started really with understanding what the heck is this thing, called the foundry.

Got it that's helpful. And then one related to foundry and sort of a phasing question, but there's a near term component of long term the burn rate. So in the near term market. I mean, you are calling for foundry revenue to I think you did about <unk> mid <unk> or so in the first half Youre looking to you know.

And I'll tell you right now, right, I'm technical, chemical, biological engineer, so I should, like have familiarity with this.

Believe me when I say, even for me, it was really intimidating to understand what the, foundry was.

So for anyone in the audience right now that like saw the foundry, is like sitting at this, conference and is like, this sounds really cool, but like, I'm not sure I understand, 80% of what they're talking about.

That is totally normal.

So yeah, started off with understanding the foundry, what it is, what does it mean to, do biology in high throughput?

And I think what's really exciting about what is so new and impactful and empowering about, what is happening here.

What does automation meets software meets biological cells?

So my office, as an entrepreneur-in-residence, if you will, looks very different from my, office when I worked at Fresh, when I first started my career, and that is so, so exciting to me.

What does that all mean?

And then what does it mean for the beauty industry?

So then taking my industry perspective and my interpretation of the industry, where it, was today, where it needed to go tomorrow, and coupling that with the foundry, what the foundry is capable of today, what the foundry is capable of tomorrow, and many years in the future, and how do you marry those two together in a really powerful and impactful way?

Do more than 100 in the backdrop of the ARPA Your guide.

So just looking at sort of any color on the cadence of that ramp is it going to be sort of roughly equal across quarters or is it sort of heavily backend loaded at this point layer and then Jason on that point you made earlier around program choice and that being an important lever for you to poll, especially in the current market context, and the focus on cash and break.

There's, of course, the, you know, I'm going to start with a problem and I'm going to solve, that problem using biotechnology, and many, many important problems are being solved actively by biotechnology.

You're already seeing that earlier in this conference, especially with the response to, the pandemic.

Et cetera.

The beauty industry presents this other element that is talked about a little bit today but, is especially present in this industry, creativity, self-expression, and self-care. And so as I was looking at the foundry, as I was looking at the beauty industry, there, was also this element of creativity.

Curious as to if that has any implications for the.

And so creativity, as it relates to the functional building blocks of what this industry has, to work with, is really interesting because right now the building blocks of the industry, how ingredients are made, come from things like this, right?

It's an extractive relationship with our environment.

We're taking things from petrochemicals, from plants, from animals, and this is how we are, creating ingredients.

So then you look at something like fermentation and biotechnology and you can say, oh, but, this is how we can create the next generation of ingredients.

Absolutely.

Foundry revenue ramp over the next.

But where Archaea goes further is Archaea looks at something like this and says, how, can this be a creative tool?

12 to 18 months or so.

How does this create something new?

How does this create something that was not previously accessible through the current, tool set, the smokestacks, the extractive relationship?

And so Archaea exists actually to create something new, to build around biology rather than to, try and fit biology into the existing constructs of the beauty and the personal care industry.

So yes, so just in terms of second half of the year foundry revenue.

And that is actually a really big shift.

I would look at the so first of all there's a very meaningful contribution that you expect from downstream value share in the second half of the year. So that's sort of the first important point and.

By the way, if the entire beauty industry was going to switch to just plant-based sourcing, there would not be enough plants that could grow on this planet to service one multinational supply chain.

So there's a very real supply problem.

There's a finite source of resources.

We will be forced to move out of that sourcing.

And I love the duality of that language.

So the industry right now has just been whittling itself down to just that part of the tree, of life.

What else does it mean?

But I look at that, and instead of replacing what we already have, I think about expanding, the palette.

What that really means is I can't tell you today, what the sort of Q3 versus Q4.

You know, industrial chemistry, our current product, they think about coating your hair, for example, to make it feel a certain way, to make it feel softer, smoother, shinier.

What if we could access anything in the tree of life, ethically and sustainably?

Biology looks at your hair from an amino acid perspective, and it looks at every single, amino acid as something that it can influence and change in a way that aligns with how you want to express yourself.

What kinds of functionality would we open up that we haven't even imagined for the beauty, industry?

So it's a fundamentally different way of thinking about the tools that we have.

What types of stories could we tell?

And how can we fundamentally harness biology, our own biology, as the next tool for self-expression?

So that's what we're doing at Archaea.

We think about this as the next foundation for the beauty industry.

The last 200 years were built on industrial chemistry. That's how we constructed our ingredients. That's how we constructed our formulations.

Will look like because that as you know just by definition can be very lumpy and so and there is uncertainty as to when that lands and so I think I would just look at it as a second half as opposed to really trying to kind of parse the two quarters because of that with.

The next 200 years are going to be built on biology.

And so I started talking about this notion of biology as a tool of self-expression. We are calling it expressive biology.

I love this term because for synthetic biologists, it means literally expression of things outside, of cells, right?

Expressive proteins are a cell.

And so what we're doing is creating both ingredients and brands.

For consumers, it's about expressing yourself.

So if we're going to create this shift, we need to enable the industry by giving them, those same tools, but we also need to push the boundaries.

With respect to foundry service revenue I would expect that as more or less to be executing.

The rest of the year sort of in line with how we did in Q2.

And Jason you want to chime in on the on the program tries yeah.

Yes, I mean I think.

The plan is try to get out there I think there is an opportunity to offer like sort of more standardized services that then lead to.

I would say like <unk>.

Smoother ramping into foundry service revenue.

It comes with the challenge of like trying to sell a more standard service to a customer versus more of a custom custom service.

Like our standard service get out of the pricing be more standard right. So instead of hey, if a customer.

Once more downstream value share that's not an option.

It's just it's just more upfront and it's more effects right.

That would make it easier.

Easier to more smoothly ramp foundry service revenue, but it would come at the cost of two things one probably some less downstream value share and then two which is more significant than we want to make sure. We don't screw up is making it harder to sell right you don't want to make it more people say well I really want best Kimco, but you're offering me this and Youre, telling me, it's my way or the highway and they say.

I'll take the highway so so we do want to be careful of that.

We're not getting too standardized, but that's what I'm getting at with that that lever and we are seeing it I mean, we've been doing a bunch of these sort of protein CDK deals those are really great.

And we're going to be doing that through products of our own.

And so the question that I pose as I end here is, what can we reimagine?

In this vein, so I'm pretty bullish about where that could go but I wanted just be a little careful I don't want to overdo it.

Got it thanks, guys very helpful.

And Steve My Yup Yup next but first I'll now take a question that came in during the call and to our investors and box.

The first question comes from, Twitter, from Kirak Kursar.

Can we change how we think about sun protection?

Can we harness the entire microbial ecosystem that exists on our skin to manufacture 24-7, what our skin needs when we want it?

There are two questions here.

I'll throw them together.

How does the concentric outlook look beyond 2022, both within the US and around the world, and how are we scaling the concentric infrastructure to move beyond COVID-19?

What goals and timeline are we looking at to achieve that?

Question is around <unk> and a question from Sean how do you plan on managing that if the acquisition is successful and although I didn't answer that question, we had a fire and it's right on that and so the company actually repaid it piece of that in the second quarter.

Yeah, I can take that one.

Planned and the only other sort of long term liability of sizes around their real estate, there long term leased assets, which we addressed in the presentation today.

And we will we will be looking to consolidate our real estate portfolio on the West coast now that will have all our facilities as well as the language as it would help to manage that over time and again, we haven't assumed that we can that is certainly something that we'll update you.

Or anything you would add Jason or Mike.

Can we create proteins that memorize how we style our hair so that we can control how, the amino acids within our hair follicles start to respond?

Okay, that's clear.

Alright.

And then I open up your lines.

So yeah, first of all, I'll say I've been hearing sort of, like beyond COVID-19 for a couple of years now.

So stay tuned, but really excited to be sharing this with you today.

Great can you hear me.

Oh perfect Alright, so a lot of ground already been covered but I got a couple on bio security and then one on a bear but first one bio security you know and I know, Jason you said that youre being conservative on the bio security guide, but.

So I think the reality is that, you know, COVID is going to remain something that for a lot of people, you know, folks that are, immunocompromised, folks with obesity, folks that are elderly, these are people that are just not, they're not going to want to get COVID, you know, this year or several years from now.

Thanks, everyone.

And that's before you get to the wildcard of new variants, right.

All right.

So I do think that's been a moving bar.

Next, we welcome Sasha Calder. Sasha is the Head of Sustainability at Genomatica, where she oversees their efforts to bring, the circular economy to plastics, apparel, cleaning, cosmetics, and nutrition.

And so again, I know it's political and the whole thing, but it's something to keep an eye on.

Please welcome Sasha.

Hi, everyone.

My name is Sasha Calder, and I'm the Head of Sustainability at Tinematica.

Now, you're probably thinking, what is the Head of Sustainability doing up here with, this incredible lineup of CEOs?

Well, at Tinematica, we do things a bit different.

We put sustainability, regeneration, and resilience at the center of our business model.

What's your what's your take on the anticipated return of flu. This coming flu season. Then you know can you confirm if you are a combination COVID-19 flu test offering available.

I'm going to talk about it for the next eight minutes and what it looks like.

But before I get started, I wanted to give a little bit of background. In the late 2000s, I found myself on Wall Street interviewing quants and traders to understand how they perceived risk, what mattered to them. I was studying the sociality of derivatives, what matters most as we construct financial models to understand how companies understand their own risk.

And what I thought was so interesting while talking to these quants is that when I asked questions of what does it look like to have supply chain resilience?

How does a natural disaster impact your reading of a company's risk?

It's not quite as simple as like a big black and white shift.

What does a human rights abuse on a supply chain do for reputational risk?

What does that mean for business?

In terms of where I think things are going, I think there are two things.

And how are you thinking about an ever-changing climate?

We have huge risks.

The answer was often, we haven't started thinking about that yet, but one day we will.

You've probably seen this before, and you know our climate is changing.

So I'm really happy standing here 10 years later that we're really thinking about it with an ever-changing environment, and planet.

The IPCC put out a report that shows our climate is changing, and so is business. Business is responding to these changes.

So I work in sustainability and I promise you this presentation will have no beautiful photos of kids holding plants or thinking about the greening of our operations.

We're in the midst of an incredible energy transition.

Of course, we imagine that world as well.

We're in the midst of a mobility transition, a food transition.

But today, what I really want to talk about, with sustainability is what is the enormous business opportunity that we have.

And what do we think at Genomatica?

We all know that sustainability is more than just the environmental impact that we have. Thinking about having life on a habitable planet, it also relates to social justice and social impact up and down supply chains.

We believe that there's a larger transition happening. Just earlier this week, at the Green Energy Summit in Saudi Arabia, Larry Fink, the CEO of BlackRock, said that his belief that the next 1,000 unicorns are, not going to be social media or technology companies. They're going to be companies solving for green hydrogen, green agriculture, green steel, and green chemicals.

Yes, so I think if you look.

So for the institutional investors and multinationals in the room, you've probably seen this before.

Materials and infrastructure restructuring the world that we live in.

The United Nations put together the Sustainable Development Goals, which gives us a full-spectrum understanding of sustainability. It goes far, beyond just environmental sustainability and hits the very interconnected nature of both the crises and the solutions that are required to get there.

This is a huge opportunity, and we're really proud to be leaving the materials transition.

So I'm a big risk nerd, and every year the World Economic Forum comes out with the top, risks. And this risk profile doesn't look very different than past years, but as we can see, the top risks to business and to our planet are mostly related to climate.

We know it's a $5.4 trillion opportunity to replace ingredients and materials used in, our products every day.

Early signs are that we're headed for a pretty bad flu season.

The shoes that you wear, the clothes that you put on your body, the every day as you're, getting ready with your hopefully brushing your teeth, souring, the very infrastructure of our life is being replaced, and we have the solutions to do it.

I'm really proud to work at Genomatica.

We're the sustainable source for rethinking what the material transition looks like.

Sometimes when people talk about sustainability, it can feel super far out, but we've spent, the last 20 years not just daydreaming about what this moment looks like to deliver sustainable materials.

And I think the.

Challenge there is that is going to create.

Yes sort of confusion around what is COVID-19, what's not what's slow and so on and then I do think like I said earlier I think we will eventually look back.

One, I think we're going to see a move from active to passive monitoring.

At our current sort of approach to monitoring of infectious disease kind of like we were all living in buildings without smoke detectors.

And that seems crazy today, because we don't really have the technology for like simple passive monitoring like your phone just telling you if something new is in the room, but there is there is no reason that technology can't get there eventually like the physics should allow for it so so so.

So yes.

Yes, so I would say that like I think.

That sort of thing.

I'll come at some point I don't think we've commented publicly on what we're doing at inflows I don't want to say anything there, but I would say that eventually I do think that sort of things should be present, and I think it should help distinguish between flu and COVID-19. So that ultimately you can keep congregate settings open in the event you have these sort of waves of infectious disease.

It's been my team's day job for over 20 years and we're at this incredible moment in time. I'm going to share three case examples of products that we've already commercialized, that are in market and walk you through a little bit about where we're going as well.

First is Brontide.

It's a natural butylene glycol.

We're currently producing over 1,000 tons in market, and it replaces ingredients made, with harmful carcinogenic petro materials. It's 100% renewable and side-by-side to a petroleum-based product, it saves over 51% of greenhouse gases.

Now, I spent the last six years working in the beauty industry in Queen Beauty, and this, is a huge moment.

The beauty industry customer and consumers are demanding traceability, responsible sourcing, and beyond.

They want sustainable packaging, and with Brontide, we're able to show that it's not, just what's on the outside, it's what's on the inside that also counts.

I'm an impact junkie, and our 1,000 tons is just the entry point.

We've seen orders of magnitude of this.

One for butane diol, BDO, which is commonly used as a precursor for things like Spandex, or maybe in the soles of your shoes.

We're now producing and have a line of sight for 100,000-ton capacity.

It's a $5 billion market with 2.5 million tons produced each year.

We currently have multiple Geno plants currently, and they're being built.

Okay got it that's helpful. And then maybe just a follow up to that.

Whats your read on the level of commitment by the by the U S and other governments because.

I don't want to look back.

I'm using like Covid testing as an example in 2020 in 2021, you know arguably the ball was drop there in terms of deploying the Copa testing dollars and also tests, which are bought.

What's your sense on the on the commitment.

The U S government to boss surveillance going forward.

So the place where Ginkgo is playing, you know, primarily, you know, in the space of biosecurity today is, in essentially regular monitoring of infectious disease, right?

This is what we're doing in schools.

I guess anything to announce today with the CDC the great.

This is what we're doing now, you know, in the CDC program, in the airports as well.

A great start.

I think ports of entry seem again like another no brainer banging out right like the idea that we wouldnt monitor infectious diseases that these nodes where people are coming in from all over the world seems crazy.

And eventually that should start to look like, you know, a smoke detector, basically, would be the analogy, right? Something that is kind of monitoring, but not requiring you to do a lot.

I think the monitor and youre seeing around wastewater that W. That's more at the state and municipality level I think that sort of thing is going to stick around right. So so and then I do think Youre also seeing dawning awareness.

Today, it's like putting a q-tip in your nose and dropping it into a, you know, a tube and walking away.

So it's not the most annoying thing, but it's still doing something.

So that's one direction, I think, you know, kind of passive monitoring, particularly in places like ports of entry, congregate settings like schools, is ultimately going to feel like a no-brainer, you know, but those technologies do need to get built up.

The other second area is international expansion.

And so you've seen this, you know, with our announcements in Qatar and Rwanda, we would love to do more internationally.

I think you'll see us continue to do that if you're tuning in today, you know, from international public health, we'd love to talk to you.

So I think that's the second area where I think you'll see us continue to grow.

Great.

Thanks, Jason.

All right, Matt Sykes from Goldman Sachs.

Just around unlike kind of the defense side of the House you know right. These are national security threats and so you also need from a defense floating to be monitoring just like we would have.

Be monitoring for missile defense right. So we have satellites. It's one when I look out for whether natural events that could be bad we want to look out for missiles right human intense events that could be bad. So I do think youll see a sort of a mix where it's not just going to be public health you also see Dod.

From a readiness and sort of monitoring standpoint getting into this as well.

Okay got it and then if I could sneak in a quick one on bare so given the fermentation capabilities at the bare facility or well gingko will be performed manufacturing for other customers and is that getting away from the core business of ginkgo and could there be any conflicts of interest with other partners from IP or competitive fronts.

Yes, so just for clarity so it's it's sort of like a pilot the pilot.

Scale manufacturing, so I think I think the.

Laurie I don't know when I get it wrong, but it was a 300 liter tanks and sort of where we're at there. So it says that it's great for doing production of biologics to go into trial Thats. Good for very small volume things, but ultimately we're going to go to large scale production you would go to a different place. So no I don't think it would be conflicting with our customers or any of our contract manufacturing partners. Okay got it. Thank you.

Yes.

I'm unmuting your line.

And I love this one.

Thanks, Steve.

It saves over 90% reduction in greenhouse gases next to the harmful coal-based alternative.

Alright, and for Hooker, Raymond James I'm going to open your line and just so everyone knows what the ending at 545 P. M. Eastern So I will try to get everyone in before that.

Please go ahead.

Alright, Great can you hear me, yes, good afternoon.

Hi, can you hear me?

Next up is nylon, and this is a really interesting case study for us.

We work with a lot of lifestyle portfolio materials, and we also work in the industrial, space, but nylon is a bridge of that.

Nylon touches everything from apparel to outdoor performance to automotive industry, and it's, a $22 billion industry.

Yep.

We're helping them hit their goal to have 100% renewable ingredients.

Really proud at Genomatica that earlier this year, Lululemon invested in Genomatica as, their first ever sustainable materials play, disrupting and able to hit help.

Mark Thanks, so much for taking my question. So I wonder if that was a two part question about XI imaging first are there any specific new capabilities that the acquisition brought into kimco and second with the 13 new programs. This quarter again, because clearly on track to meet our target of 60. This year. So given that design, we didn't have its own pipeline of potential projects could you.

Nylon is the number one product in their portfolio from a volume perspective, and we're shifting, it to 100% bio-based.

Great.

We're just getting started.

Just talk about whether our ginkgo could leverages one relationships to go out and find partners for those programs that in turn would potentially accelerate kinko's own existing pipeline. So as to achieve the very large growth 500 will project.

Thanks for taking my questions.

We're having a big impact, and we know that we can't do it alone.

We're so grateful for partnerships and collaboration that believe that many hands make light work, and it's with partnerships with folks like Ginkgo who help us accelerate our thinking and bring these technologies to market at speed and scale.

So as we sit at this really golden intersection and crossroads in the industry, we know biotechnology, can help us solve the climate crisis in new ways.

It can help us imagine where we're going and where we've been, put social justice at the, center of solutions, and care about our neighbors, partners, personal health, and the health of our planet.

Yeah, I can take those.

So I encourage all of us to look to nature for the most beautiful design.

Jason, maybe the first big picture one for you, you, talked about sort of the secular growth trend of externalization of R&D and manufacturing, you know, and you've talked in the past about going after larger companies competing against internal R&D, you know, segments and people in that in that area.

On the new capabilities, Brian So I suppose there's a little bit and it's going to really do more of a deep dive I do encourage folks to look at our go to.

Our IR page and look at our video specifically on those islands or an acquisition when we announced it but.

I guess I'm wondering, in terms of one concern those customers might have, a lot of IP is generated, you know, intended or unintended in those R&D and manufacturing processes by those customers.

One of the things that we have to do here I think I always continue to drive the scale of our foundries and thus reduce the cost of doing the lab work of cell engineering.

The XI emergent team is invested in really flexible automation.

In other words sort of robotics that can serve many different types of lab processes and have really great software system on top of it I think it's one of the things that can help us keep up with nice law here I can't go to continue to scale, our facility and reduce our costs right. I also think it's really exciting to have the team that design that and build that coming onboard to help <unk>.

Further push that along that.

Giving them.

Then thinking about the next generation of that and having the resources of ginkgo behind them to do it I'm also helpful helps us get to the next stage of what we need. So so those are the two things I do think that that is sort of that automation is something that we would have had ultimately develop I can go but theres sort of a speed up here by bringing in the team intact zymogen.

When it comes to their internal program January mentioned Theres interest in that externally well. The only thing I'll say is you know Google has a history of doing a lot of spin outs and basically taking product focused assets and getting them partnered opera in the hands of other people are into their own companies. So hopefully we can be helpful. There we would of course loved that.

<unk> that spun out entity as a customer on our platform where it makes sense. So yes. So I do think thats, something where hopefully we can lend a helping hand.

Alright, my girlfriend, a PSA and then on mute your line.

There you are.

And then.

One more question at the end before wrapping up.

Great can you can you hear me okay. Okay, Alright, Mark I wanted to go back to a comment you made earlier in discussing the foundry work for the rest of the year and how much is from milestones versus core foundry I want make sure I heard you correctly, you said something along the lines of executing core.

<unk> in line with Q.

One I want to make sure I heard.

Is that right and then if I did.

Look at <unk> core foundry about $22 million took you about $26 million that implies something like.

100 to 110.

Core foundry for the year, so that's a pretty sizeable milestone in the second half about $40 million to $50 million.

So one if you can confirm the bridge there and then is that a single milestone event does that multiple events.

Given it is in the guide.

Pretty critical that we kind of get a better sense of how that's gone through thanks.

Yeah, Yeah, yeah. So it's not a single milestone events it would be more than one or.

As you know and we've been very careful about not guiding to specific.

Downstream valleys your versus foundry service revenue.

Generally speaking I would say directionally.

The math is correct fundamentally we're not doing anything to difference in Q3 and Q4 in terms of foundry service program execution than we did.

In the first part of the year, we are adding more programs and keep that in mind, So we will be adding programs.

We had a nice contribution in Q2 from programs that were added in Q1 in terms of foundry services and so you can sort of extrapolate that thinking a bit.

Just to the kind of general math that you were doing but yes. It is there is a significant contribution that we are anticipating from downstream valid from sort of multiple potential sources of downstream value share in the second half of the year.

Okay, and then that foundry service.

I think we would couch or we call it <unk>.

Revenue per active programs, but I think we're kind of getting at that same point.

Is that you are in the.

That run rate you had in <unk> and <unk> now has been pretty consistent.

Is that sort of settling in at a level. We should expect going forward just not looking for 2023 guidance, but we're always looking sort of look for for Kpis. We've got your kpis on new programs active programs, but that revenue per program.

Is that the zoning in on a region that youre comfortable with.

Yeah.

I think so I think if you take the court like just the quarterly that's sort of.

Sort of top level math that you're doing and annualize that that is a reasonable average in terms of like how do we think about it.

For the annual amount you might expect from a program and then as you know our programs might be two to three years in duration and so it sort of gives you a general sense of the size of the program, but yeah I would say.

There's nothing that I'm seeing.

Michael that's sort of surprising in that number.

It could trend differently in the future, but right now it's sort of.

I think we would expect it to be.

The only thing I'd remind you remind you of Michael is as we discussed at that in the last quarter as well depending on the stage of a program and therefore I'd like the mix of earlier stage programs versus later stage programs and the structure of that program.

Revenue for our program active in any particular quarter could vary and that's not.

That's not really what we're managing toward for managing <unk>.

So I just wanted to make sure that that's clear no of course recognize that and yes. It's just that over the last couple of quarters that number has started to normalize a little bit. So we're always trying to get a sense of.

Is this a more appropriate point, but yes totally get that annemarie.

All right I'm going to sneak one more in because I always like to get everybody and if we can serve you in front of me.

Got it.

Hey, guys can you hear me okay.

Yeah.

Wow.

Thanks for taking the question. So just one really quick one and you mentioned international expansion in the Biosecurity Frank.

Could you just elaborate on how those conversations are progressing.

Pipeline there.

Also mentioned expansion to new packaging as well and so just wanted your long term outlook on gambling Lenny bianco okay. Thanks.

Sure and before I do that I will mention I said 300 later, it's actually 3000 liter tanks in west Sacramento facility nicely connected corrected by Emily Green Hagen here.

Is that up for us.

Yeah on the international front, we are.

Our general view is this type of error kind of airport modern and things like that that should be happening all over the world. I think are our model I can go is to do this through a through lab networks right and we've done that in the U S. We think we can expand that internationally. So I think you'll just see us fall our same playbook.

To sort of build the same infrastructure out as much as we can internationally. So there's not a lot more than I think we're going to learn as we go.

Again highly political alright, so it really varies based on different countries, but we have the experience of doing many states in the U S and each one of those as you may know.

Noticed rides almost like a little country here in the U S and so we have a little bit of sense of that and then.

The only thing you asked was about the.

What was it the new emerging pathogen neurergic option. Thank you.

Yeah, I mean look again the idea is once you have this infrastructure in place you could use it for monitoring for multiple pathogens I think thats exactly the future vision here. Yeah. So I think you would expect us to do that over time, and hopefully thats something that that governments would be interested in it seems again to me like a no brainer, so but yeah that would be that.

Direction, we'd like to take it.

Thanks, So much good again and thank you everyone for joining us after our Q2 earnings Venmo and I'll see you next quarter.

Thanks, everybody.

Okay.

How do you get comfort with those potential customers that they might lose that IP?

I spent a lot of time thinking about sustainable packaging.

All right welcome back everybody and thanks for thanks for staying with US for the last few hours for our very first Investor day, and I am thrilled to be here with my friends and colleagues.

And how can you transfer that?

Can you tell me of a more sustainable package that's been designed?

As we continue to move forward, I hope that we continue to think about what impact looks, like in a much more holistic way.

I can't go who you just heard from over the past the hour. If you are going to answer some other questions that have come in.

Or how can you make them comfortable with that?

Thanks so much, and join us in accelerating the transition.

Women and Twitter and so Jason there was one that came in that was one of my favorites.

All right.

And then a threat of first one <unk>.

Sounds better says less listening to ask RMG acting as Investor day producer and 95% of investors have no idea. What these people are talking about even though they are trying to explain the science everyone is waiting to hear from you or the business revenue potential as opposed to the science behind King and then cause that nickel Rita can you cover the basics in your own words, what do you think it was about.

So which customer for what costs like what's the business model in a couple of sentences. So I'm Gonna give me 30 seconds. If you can you can do with it.

Because I would think that would might be a potential barrier towards externalization of R&D going forward.

Do we have Mike Gorenstein in the house?

Awesome I love it.

Yes, we do.

Mike is the executive chairman of Kronos Group, where he leads their mission to advance research, technology, and product development in cannabis.

So yes, so the quality of our ginkgo is sells run on digital code in the form of DNA kind of like computers run on zeros and ones sells Ron on <unk>. Because you can program them, we should expect theres going to be App developers write books you on a programmed cells to do new things take those to market and make money doing it genco simply weren't.

Please welcome Mike.

Mike.

Yeah, so this is a super good topic.

All right.

And so the first thing I do want to point out is, I, think there are trends both in externalization of R&D and externalization of manufacturing.

Well, so I feel like everyone's starting off explaining what they do as a company.

Appstore right, we provide tools to folks that want a programmed cells to do new things to make it easier and faster for them to do it and then we help them bring those cells to market in exchange for that they pay us they pay us while we are developing the cell and we get just like you would in a mobile phone App store, we get a piece of the value of the App and that's how we make money.

So I think that's probably where I should start.

I heard some references about, it seems like it was Lord of the Rings, Star Wars.

Only a few people cheered. So there's probably some people here who didn't really love those movies.

And what we would do is help you figure out a way to enjoy it.

That's my question.

And then on.

Back to appear odd marketable security instead dancing video with lots of fancy word some fancy words, I haven't heard them say $15 billion and $150 million of reps theyre doing a lot of talking to not address the elephant in the room.

And around what how do we get to that $15 billion valuation with $150 million of revenue this year.

Yeah. So this is this comes back to us.

Cannabis is a pretty complex plant.

I'll touch on this App store idea again here. So so there's two ways, we get paid we get paid while we're developing a cell for a customer they pay us effectively fees for using that facility I'm sitting in front of them and.

It's something everyone jokes about, it's very simple, but in actuality, there's a lot, of different things it can do.

Many of you have probably heard of CBD over the past few years, but say five years ago, you only knew what THC was.

There's a lot of different cannabinoids that can actually be found within the plant, and, that's why you get so many different effects, depending on what type of genetic you're ultimately consuming.

And so what we want to do at Kronos is find a way to actually deliver differentiated and, consistent effects.

Berrien Kristin walked you through earlier, our foundry on a usage basis right and so you know in 2021, we guide towards $100 million out of that $1 50 is foundry revenue from using that facility.

Straightforward to understand.

The App store side of the business. So ultimately we are going to get a piece of the value of those program cells per customers back to ginkgo and that's a new idea in biotech it's actually.

And, you know, Ginga's focus is really around that externalization of R&D.

Been a very very successful business model intact, but in biotech you haven't really seen it people tend to develop their own apps right, if you're at Genentech or a Roche you've got a drug you own that being 100% that's really a product company.

Okay, right.

So we are, we're, and we're excited to see the externalization of, manufacturing, we love to work with contract manufacturers, and so on.

<unk> got a product company, we're a platform and so when these apps get developed we get a piece either through royalties or through equity in the companies that are developing those applications and that comes back to us in the long run right. So in the near term that's not where the revenues are coming but over time as those assets go to market that's going to be my view.

But our focus is really on the R&D side.

You know, you bring up a great point.

I mean, this is a conversation we have around every partnership we do, frankly, around how the intellectual property should work.

You know, particularly, I think there's two pieces to it.

One is, do I even trust Ginkgo has an approach, which is we want to retain the reuse rights to the intellectual, property that is developed on top of our platform, not for your, you know, product, you know, customer that we're working with, but for other things that aren't competing with that product.

The lion's share of the value of the company.

And Thats not included if you look at our projections and the financial model you Mark walk through this in the video that all those all that that's all foundry revenue. It doesn't include that value coming back to us through royalties or equity in the applications.

And so if you look at our numbers. We ended last year with 48 cell programs like that we're adding 23 new programs. This year seven just in the first quarter. The rate, we're adding needs is going up dramatically and when you see news for example, last week <unk> food works announced a 200 more than $250 million fundraise.

Great news for Ginkgo shareholders, because we have you know a good chunk of equity in motif because they're an app developer on our platform when kronos as theyre going to market with a cannabinoid. That's good news for came about right and so so that's the part of it that ultimately justifying the $15 billion valuation, that's really where the majority of the value of getting that's going to come from in the future.

And that really comes down to unlocking some of those rare cannabinoids, THC, CBD, and, then there's six others.

And we want to know how can we find a way to accomplish that.

Sure that App store.

And, you know, at the end of the day, we actually think that that is a net good for the customer and their sector.

Okay. Thanks, Nathan So a bunch of questions you have comment on that on our platform around I think folks who are building their models I'm trying to kind of get under the hood and get under that.

So mark I was hoping you know one of the topics covered in the last session was really some of the underlying drivers that the model.

In both the foundry doesn't have a downstream how would you guide people towards sort of modeling endeavors around.

Because in biotech, we believe as we look across the industry, we see a lot of IP, which is siloed in many companies that could be helpful to the others, but the transaction costs associated with that are bananas, right.

And so, so what we are able to do is use the leverage of our platform to force an IP regime where they're sharing amongst customers, again, not for their product, but for other products.

Yeah. So I guess the way we think about it is we start with foundry capacity.

And, you know, it's a different way to look at things.

Honestly, I think it's how software basically played out, you see an enormous amount of kind of low level code reuse across software.

It's one of the reasons that that industry developed so quickly.

And frankly, I think biotech, you know, needs to kind of grow up and move into a scheme like that.

But, you know, that remains a fight.

And the main way we do it is by showing the value of all the existing code base we have, plus the scale of our platform to convince the customer to kind of adopt that IP regime.

And so, again, we're excited to see that with large customers like Bayer and others, but, you know, it is still a fight.

And our ability to improve throughput in that capacity.

So fortunately, we ended up running into Ginkgo a few years ago, and we had been looking for, some way to design something that would specifically make one actual cannabinoid without having to get 50 and find a way to fractionate, and it was really complicated and expensive.

And as we've discussed.

One of the tenants of our strategy is to get more programs on the foundry as we get more programs on the foundry that.

Drives the foundry scale economics. It also pushes us to make investments in technology, which gives us productivity improvements and so you start with foundry capacity and how much of that do we have and how quickly can we add to that.

And so how do we go about doing that?

Well, I feel like here, to everyone, you'll see a very simple diagram that explains what, is it that the geniuses here in Boston figured out how to do.

And that is start off by looking through all the different genetics that we had and figuring, out what's the most efficient way, what's the most efficient pathways, where are the cannabis enzymes that really matter that we could isolate and optimize how to actually produce the specific cannabinoid.

And then finding out how we could take that DNA and put it into an engineered yeast cell.

<unk> sort of focused and getting more programs on the boundary of that drives the scale economics.

That builds code base all of that in turn enhances the value proposition.

That scale economic results in a cost savings that we can pass onto our customers and so we do do that and also like I said it enhances the code base, which makes what we're offering more valuable and it makes the next project easier and faster.

And so collectively over time, we've talked about the flywheel.

What you see is the.

The revenue is increasing.

Yes.

US taken on more programs.

And the profit the overall company profitability starts to improve and as you've seen we are.

We're expecting.

To start approaching breakeven on the EBITDA line around.

End of 2024 sort of roughly speaking and what youre seeing there in terms of the drivers really were just leveraging.

Our R&D and SG&A infrastructure on a higher revenue base and none of that includes the downstream value shares up to the other sort of core driver of the business.

Is that your you will start to see the monetization of either royalty or equity interests also contributing to the bottom line.

Got it.

And then, of course, that was a great thing to figure out, and now we have a process, but how do we actually make it?

Okay. Thanks, Max Thank you mentioned that.

It started first first element of that.

Not all his capacity.

Because what's important to us at the company is delivering these products to consumers. And so we worked closely with Ginkgo.

We're very fortunate to identify an opportunity in Canada, where the majority of our operations, are today, to go and purchase a facility that belonged to a generic pharmaceutical company.

You talked a lot about nine five I think that's fine that concepts really interesting.

How's that.

How do we keep nightclub going and what gives you confidence that you know that we can maintain that going forward what are the top challenges.

And just one quick follow-up, maybe Mark, help us maybe understand sort of mark to market on, end market exposure by industry.

Great.

All right great question.

It just kind of combing through some of the press release seems like there's been maybe unintentional, but a pivot towards pharma and ag bio.

Ginkgo helped us work, train everyone there.

And when we always like to talk about.

And I'm just wondering, one, what is the end market mix look like today?

You can now see what the fermentation facility is, which looks familiar to everyone here.

And two, how does the end market approach you have inform your program risk sharing decisions that you make in terms of when you toggle up front versus downstream?

And find a way to take that organism, which we've since shipped from Ginkgo to Winnipeg, So, what does that all mean, you know, when you think, alright, rare cannabinoids, what happens?

I would think in areas like biopharma, ag bio, where there's been more success traditionally with synthetic biology, maybe it might change your decision in terms of how you toggle that program risk sharing decision.

So, I think Jason, you might have mentioned earlier, hey, there's, you know, there's some, uninfused gummies.

First of all I have to say that neither I, nor anyone at ginkgo can predict the future.

I could do the second part first.

Actually, looking at the colors, I got to check supply chain-wise, so I hear a lot of, laughter in the crowd.

You want to start?

You probably now know what it is, we'll confirm, but ultimately, we wanted to deliver something, different because for those of you who go to the boring dispensaries here in Massachusetts that don't have Kronos products, you're probably just wondering, like, when will I get fermented products?

Go ahead.

Do the mix today.

Yeah, I mean, that second point, I think, is the real material one, Mark, right?

When can I get something that's unique, that's consistent?

Yeah.

And that's really what we wanted to do with Spinach, is, you know, talk to you about how, we have products and how it makes you feel.

But I'll note that neither could gordon more than 965, when he made that prediction that ultimately became.

Yeah.

That's what was so exciting.

So in terms of mix today, when you look at the existing programs, the current active programs, it's pretty well balanced with growth as you've noticed.

And as we've discussed growth coming from the pharma and biotech sector, and then we saw pretty good growth year over year in the food and egg.

But we do see, you know, we have a pretty balanced customer mix across end markets.

When you look at our pipeline and sort of expectation going forward, likewise, we still see that as being kind of pretty balanced.

The, yeah, the way that we contract, Jason, why don't you, the way that we contract in terms of downstream value share and up front absolutely varies by industry and even depending on the particular customer.

So, we started off with, I'll show you here, with the THC and CBG gummies.

The Moores law that we know today.

So, this is the first ever combination of a THC and a fermented CBG product that's been, launched.

So, you can see options of what we've done here, but we've taken two different flavors, two different cannabinoids, and for those of you who've tried it, you can see how we sort of combine these two experiences, but ultimately, it's about modulating and balancing what that means.

Instead, he saw a trend.

Which we have seen and we've shown you all.

And he saw no fundamental physical reason why that trend could not continue all that was required was continuing investments driven by tremendous commercial opportunity and we believe that the exact same conditions are true today in synthetic biology. So we just need to do the work.

And this is really just a start for us.

To be more practical about the answer.

<unk> is driven by automation and miniaturized nation of the way we do the work in our foundries, we have a lot of low hanging fruit still to be captured or still to be collected in terms of how we do that work and how we automate it and thats just using the technologies that are mature and available to us today.

We work with our partners folks like twist, and Berkeley lights, and as we see how their technology their improving we can see how we're going to be able to continue to increase the scale and drive down the unit cost of the <unk>.

Working in our foundries.

So in the midterm, we look at those kinds of technologies for better DNA printing better measurement of how cells are performing greater miniaturization and as being the drivers of the Knights law and then as we look to the longer term.

The reality is it sells and DNA are really really tiny and they make copies of themselves very easily and so what that points to is the ability for us to really miniaturize, our operations and our work down to the scale of individual cells and molecules and in the kind of multiplex.

Library based work, we do already.

We're able to we're able to realize that potential in certain cases today and in the future in many cases.

Most of the cases the projects that we work on so.

So we see both near mid and long term ways to continuing to drive.

The scale and the efficiencies that are that are going to drive nightfall.

So, you know, a lot of it is dependent on the customer's interest, Matt, more even than the industry.

So, while we're excited for CBG, we start to look to the future as we bring out other, products, not just in gummies, but in other formats.

And so I do, though, the sort of filters on it, our priority one is, you know, what is the, is the customer sensitive one way or the other?

Okay, Thanks, Mary Anne and.

Okay, and you will find some customers sensitive one way, you know, they're really sensitive to royalties, they want us to do a bunch of on-front payments, or vice versa, startup might be more interested in back end, less upfront, if they're cash sensitive, you know, you sort of have that, then you have some companies that really don't care, right?

Patrick.

And so there's sort of, that's question number one.

So, anything from, you know, from vaporizers, from pre-rolled products, to, you know, different, forms of edible food.

Codebase, there's always that I think are an interesting topic for folks and it definitely is part of my thought but we don't have the same kind of historical metrics that we've been able to kind of plot out for people around code base and so.

And then question number two is what's Ginkgo's current interest, right?

Are we in a situation where we'd be, you know, based on market conditions, or otherwise, we'd be more interested in cash in the near term?

We really have a lot of optionality and a lot of opportunity.

And that's what I think is so exciting about the platform and the things we've done is, you may go in and wonder what's this going to do.

When you go and you have a beer or a glass of wine, you know what the effect is and you, have an idea, but unfortunately with cannabis, it can be different each time.

So, one thing we're excited about that'll be, can't give any timing yet, but we'll say, like we're looking at, you know, in the near future is being able to introduce something with THC-V.

It would be very, very difficult for us to get that actually cultivating and extracting.

You know, some of the people here might want one of the, some of the investors in Ginkgo, but realistically, unless anyone's willing to pay $10,000 for a single gummy, it's probably not going to be something that you see a lot.

And you have too much.

We get a lot of questions around how do you measure it.

But because of the platform and because of what we've been able to unlock with fermentation, we'll be able to deliver that to a consumer for a similar price point if it was just extracted, THC.

You don't know what it is.

And I think that really means a lot.

That's one of the things that keeps people away.

In order for this industry to grow up and move forward, and we kind of are moving at, a similar speed to synthetic biology right now, it's important to have consistency.

So I think that's important, but also we have medical patients that need to know exactly, what they're getting.

You know, it's important from a regulatory perspective and from responsibility that we, can deliver the same thing each time so you don't accidentally eat a gummy.

We have doctors.

What metrics should we be looking for or what are you. What are you going to report on them. So but like you to just talk a little bit about how you think about measuring codebase and really what matters there.

And by the way, they're not infused, I was joking.

One of the reasons that they're nervous about prescribing is you don't know what the exact, amount is.

So if you think and you back up overall what's this platform allow us to do, it basically, gives us a precision to be able to make consistent branded products and to be able to deliver those at a cost-efficient level so that consumers can afford it, so that medical patients can afford it, and you unlock all the benefits of cannabis.

And that allows us to develop cannabis as an industry similar to how you've seen different, consumer product industries, pharma, everything you know where you can get the same thing each time.

And for us, I feel like we're able to leapfrog five or ten years in the future having met, Ginkgo, being able to do the work.

Are we feeling sort of well protected with a big margin of safety, and we're more interested in optimizing for bigger, you know, high margin downstream value share in the future?

And I think one of the things that's most exciting is these products are actually already, I would say on shelf, but they've apparently all sold out. So they'll be back on shelf soon.

We're able to produce whatever we need, so that's great.

Yeah, that's a great question and I think we're still trying to wrap our heads around around based on how best to quantify it but you know for US are kind of two key factors that we tried to keep track of one is just sheer quantity and thats really where we leverage the scale of the foundry to make sure that we're basically.

And I hope some of you will be able to try them in Canada.

And for those of you who are politically inclined, please help us push your local politicians, to make sure that you'll be able to try these great products in the U.S.

Thank you, All right, so next we welcome Michelle Xu Michelle is the CEO of Hue, a biotechnology startup dedicated to producing the world's most sustainable dyes, Please join me in welcoming Michelle, All right Okay, well hello everyone so again, my name is Michelle I am the CEO and co-founder of Hue, We started the company about two and a half years ago now out of IndieBio based on technology that my Co-founder and chief scientific officer Tammy was actually developing out of the Duber lab at Berkeley and, Essentially Hue is a color company. We are, creating the next generation of dyes and pigments for the many industries that are shaping the health and future of the planet and So that means right the colors that we put on our clothes on our faces, And our hair, but we're also thinking about the color In our food or the paint on our walls.

I mean if you think about it, Color is literally infused into the products that we all use and consume every day and the history of that color is that Thousands of years ago these dyes and pigments were once, Extracted from nature you had to crush up leaves or in some cases even animals To be able to kind of produce the specific colors of interest, And that process was really laborious It was really expensive and resource intensive and then the other thing is it didn't create very high performing or consistent, Colors, that was a huge barrier to industrial viability Which is why you had some colors like royal purple, that got its name because it was literally worth more than gold in how expensive the production process was and Largely today those remain kind of the same barriers for the industrial viability of some of these plant-based colors, And so you can imagine how exciting Science really was when the Germans figured out how to create color from petrochemicals, About a hundred and fifty years ago.

It really made color suddenly Not just really cheap, but also highly functional to serve, massive industries But then of course that came at a trade-off of an enormous amount of environmental, And even in many cases carcinogenic harm So these dyes that we're using in our products all around us.

They are not only, Fundamentally fossil fuel based and made in an extremely carbon intensive process but the production process also involves a number of toxic chemicals and heavy metals that actually end up as trace materials trace substances both on the products that we're using and in many cases in soils and waterways and when you have 20% of global industrial water pollution coming from just textile dyeing alone as one example, It's really devastating many communities all around the world.

So that's the problem that HUE is on a mission to change.

And we believe that synthetic biology really holds the key and the answer to do that.

We see a landscape and opportunity right now where there's this growing ecosystem of tools, like CRISPR and platforms like Ginkgo are really opening up brand new possibilities to work with biology and go back to nature.

And so we, and right now we're in this time when consumers also are waking up to planetary, health and the needs that are going on in climate change more than ever before.

And that's really created this opening for biology to kind of demonstrate its possibilities, and opportunities in reinventing and uprooting fundamental categories like food and oil.

And so for HUE, we are then harnessing that revolution in synthetic biology to culture, nature's rainbow and clean up the space of color.

The way that we do that is probably a pretty familiar process to those of you in the room, here.

We really start by going back to nature as having the blueprint for color.

So we look at the specific colors like beet red or flamingo pink, and we study the enzymes, within those plants and animals that are responsible for creating those colors. We identify and sequence them and then express them within our proprietary microbes so that, we can grow them in large fermentation tanks.

And then on the back end, the experts at productizing and purifying the materials according to the, expects of our customers to create a drop-in solution to the supply chain.

Basically sourcing generating in characterizing as much unique biology, as we can you're over a year right. So so from my perspective actually rely a lot on nights, Florida say, if we're actually scaling the ability of the foundry to improve the number of operations. We can do a year over year from my perspective that means we can continue to drive the quantity of new code base that we can.

But on top of that, I think we really saw an opportunity when we first started as... And we're looking and asking ourselves the question, Tammy and I, at the beginning of, their days, how do we take advantage of the incredible technology that Tammy was working on, but also this growing ecosystem to do things in a way that's better and faster than ever before?

And that's really why we came to Ginkgo in the beginning and how we really embarked on, this partnership that we just announced in the last couple of years.

We're really proud at HUE to be just one of the earliest companies to be taking advantage, of this platform and opportunity.

We are kind of defining ourselves as what we're calling a SynBio 2.0 company, one that, is able to create, be super product focused, and do execution faster than ever before at lower capital costs than ever before to really define kind of the future of the SynBio landscape.

And so that's exactly what we think is the opportunity here, and we think that it's enabled, by being able to separate on areas of expertise.

So that's really kind of the vision that we see and the opportunity here at Ginkgo.

So if HUE is a color company focused on knowing exactly what colors are industrially relevant, for our customers and knowing exactly how to apply it, we can therefore be kind of the experts at identifying some of these initial pathways, identifying the molecules, and then on the back end, being experts at the productization and the application process and the delivery But we can save a lot of that middle stuff with the bioengineering and the strain development, and the titer improvement that has really slowed the companies of the past down.

And the result is that we're able to create a bio-based platform solution for color, where we're able to create colors that are lower in carbon and toxicity footprint compared to chemical-based dyes, but also much higher in performance, more cost-effective, and more scalable than the traditional plant-based solution.

We can farm all of that out to the ecosystem that's developing and growing out there to, really do it in a way that's faster than ever before.

So our starting point, and what we're working with Ginkgo on now, is the indigo for your, genes.

And it's really exciting, because indigo is actually the essential ingredient for making, your genes.

Even though you don't need a lot of it, it's the most visible ingredient. And it's because of the way it binds to cotton that kind of creates the iconic natural faded, look that we all know and love in our genes.

Thank you.

And so what we're able to make is basically a bio-identical molecule, and that's extremely, important for the supply chain, because it means that we're able to plug in right at the point of dyeing, but the rest of the process, from growing the cotton, dyeing the yarn, and then weaving it into fabric and creating the garments, that all can remain exactly the same, therefore reducing the kind of pain and adoption and implementation that is often faced by the supply chain.

Sorry.

And so with that, and I promise I'm done digging, we are very proud today to be working with, some of the best-known names all around the denim industry.

And I can tell you that jeans, cleaner jeans, powered by hue, is coming soon.

But also, I'm even more excited about the future of color, powered by this synthetic, biology revolution that is also very much on its way.

All right.

So, today's next developer is Nicole Richards. Nicole is the CEO of Alonia, a company seeking solutions to the world's largest waste challenges. They use microorganisms to sense, remediate, and upcycle waste streams into valuable resources.

That comes after the customer one, right?

That we can develop now how do we use that to actually help our customers achieve their goals faster, that's where quality comes in and one of the metrics. We use for quality is how often are we actually reusing particular codebase assets right. Some really important stuff sits on the shelf or for a year or more before you find the right opportunity to reuse it but certain things we go back to.

Over and over again, and that's what we're trying to really quantify.

Into what we're calling style development kits basically playbooks that we can apply over and over again reusing valuable code base that has been proven over the course of multiple projects. So again <unk> means that we can really deliver on quantity in mind through that for useful information that you just want a new strategy on designs, but ultimately reuse is how we measure quality in.

It's something that we pay a lot of attention to.

Customer's the priority, because it's still the number one priority is getting new customers on our platform every day.

Please welcome Nicole.

And so, so does that, does that make sense?

Alright. Thanks.

I wouldn't say it's so much like this industry or that industry, certainly, although I'd say there is general liens, probably more to do with customer size than industry.

With the bigger ones more willing to pay more upfront and smaller ones preferring a little bit more of the backside.

So maybe then wrapping up there.

Got it.

Thank you.

Good afternoon, everyone.

It's great to be here with you.

Yes, Patrick.

I'm Nicole Richards, CEO of Alonia.

I think the CDK inspired name right. So this is this is coming out of software development kit right.

Thank you.

And as I understand it.

Yes. This is part of the package you got as part of engaging with like a mobile phone ecosystem right. If you want to develop an app you get from Apple I can ask the U K and it helps you make put the button on the phone in the right place with its existing code that makes it easier to launch an application and in exchange for that because that's a valuable thing for developer Apple.

Yeah.

You can take a toll on those apps that get developed right and so.

Very much in line, even the naming of things here that this idea of the CDK. This is really we think the evolution of genetic engineering and cell programming, where we're taking lessons from software to do it and I think this is what I'm really excited about is these <unk>.

Thanks, Matt.

Okay.

And I wanted to start with something I wanted to share with you since you're all my closest, friends and family here.

It's a new brand that we're going to launch later this month, but it really represents, what we think of as our vision and who we are.

So just rounding out the capacity and Capex.

An important driver of our capacity is also just our operations and how well we function together as a team and I didn't think folks have seen our vision for the future and that involves a lot of growth.

So, I'm going to start off with this.

Let me know what you think.

So Matt I have.

Matt LaRue from William Blair.

What do you think?

Because I guess with my one question I Didnt get the minute I dislike it like talking about it yes, I'd love to just ask you what you see as the biggest kind of operational hurdles and how you think about scaling up an organization like kick out.

I'm opening up your line now.

Hey, good afternoon.

So 13 programs added in the quarter and sticking with 60 for the, year, could you maybe just describe sort of what the line of sight is to that number?

Over the next four five years.

And as you're having conversations with folks contemplating coming on board, are there any, customer categories by sector that are proving perhaps more or less sensitive to the macro uncertainty right now?

All right, it's a go.

And we really think about the challenges of scaling on two fronts. The first is it really around our culture right. So we have a lot of ink.

Yeah, so I can speak to the second part.

You still have to listen to me for a few more minutes, sorry.

But, but in terms of, I'd say, how the macro, uncertainty is affecting things, I think, one, I do think it's just like, generally, you're seeing less R&D dollars spent, right?

It's been 250 years since the start of the Industrial Revolution, and it has had profound, impact on our lives, in the quality of our life, in the technology that we have today, which has been amazing. Conversely, the impact on our planet has been devastating, with a long list of environmental, consequences from polluted land and water and climate change.

Like a lot of small biotech, say, in the pharma industry would be cutting, you know, programs two and three in their pipeline, right now, you know, and sort of like doubling down on program number one, well, that ends up hurting kind of the service providers that would be providing any, any sort of research services into those programs two and three.

The good news is that nature will heal itself.

And those are that, you know, like that, that that can affect Ginkgo, I would say.

The bad news, it will take thousands of years to undo just what's been done in the last, hundred years, and we simply cannot wait that long. We need to act with urgency.

The flip side of that is stuff like we saw with the bear deal, where, you know, market, pressures can also encourage companies to make that transition to move from having, you know, an in-house capability to really pushing that external.

And so Sasha and I didn't plan this, but according to the UN and the sustainability goals that, have set the challenge for what we need to accomplish as a planet for planetary health by 2030, Elonia is working with industry and government on the five that I've got highlighted here.

This is a challenge that we exist to solve.

That's a very, you know, to me, that's a more important trend long term for us, even if, we see some headwinds on kind of individual R&D budgets in the near term, I'd probably take that trade.

And that's because our mission driven company like Ginkgo, our team is fundamental and instrumental to us.

But let me tell you a little bit about who we are, and to understand that and to see, how we think is to know that we see waste as a failure of the imagination.

I think by and large, the much bigger issue for us is that ninety-nine percent of, you know, cell engineering is still just done in-house, right?

In nature, nothing is wasted, because nature is the original innovator, recycling everything, in a circular ecosystem.

Our ethos at Elonia is to work in harmony with nature and to fast forward the future, solutions to the present day.

So our mission is to leverage the power of biotechnology and advanced engineered systems, to help develop a waste and pollution free world.

Our mission against these three, our mission against this is in these three areas. So it's in remediation, which is using and finding organisms or enzymes that will break, contaminants and render them inert.

It's upcycling, which is taking a low value waste and upcycling it to a high value product.

And sensing, which is looking for biological sensors that will find where those contaminants, are and help inform the solutions of remediation and upcycling.

So we're not reinventing nature. We're collaborating with nature so we can hit fast forward.

And then they have impact it can have on our team is really fostering a culture here I think.

And this challenge is expanding if we think about how our world is changing and some of, those factors on the right, just as the chemical and mechanical solutions that exist today are reaching their limits.

So some of these trends are GDP growth or urbanization where 70% of our population will, be living in cities by 2050, creating super waste nodal points, right when land is at a premium and limited.

So we've got a long list of these new and contemporary challenges that are happening, that are demanding different and better solutions.

And this is a paradigm shift that Elonia is working on.

So that helps us attract the best talent and retain the best talent and really I think at the end of the day closer has a huge.

And so that's really what the battle I'm fighting, I would say.

On that appointment.

The oh, and then and then sort of path to, yeah, you know, we, you know, no update to, that.

And again keep requirement.

You know, we're, you know, continuing to scale on sales.

And now is the moment to make this shift, thanks to a confluence of factors.

And so we really like to think about our culture, it's not necessarily X days, that's what we aspire to be so continuing to grow our culture as we grow the company I think it's fundamental to being able to scale rapidly.

And I think you might see us focus a little bit around now.

So when we look at what's been done in the bioremediation field, and really it's been, over the last thousands of years, since 600 BC, microorganisms has been used in waste.

I don't know.

If we think about in the 60s, the first microorganisms were identified to clean up oil from some, of the oil spills.

It's a good it's a good question.

And some of you might be surprised to know that the first engineered biology was deployed, in the environment in the 70s and 80s.

I mean, I think we've seen we've seen good progress with startups.

But the progress has been there, but it's been slow. When we think about the progress that we've all heard about today, and we know from biology, and the development there with synthetic biology and reading, writing, editing DNA, the computational powers that exist today and haven't before, what Ginkgo is doing and the foundry, it really has made tremendous strides.

So we're looking at the solutions across these four areas.

We are seeing good progress in pharma.

And Jason showed a chart earlier today about the cost.

And if you think about the environmental field, it's kind of at the end of the process.

It's the place where nobody wants to spend money.

So to take this transformational biology, it has to be a cost effective.

And now is the time that we can do that, to take the biology that's been developed for, other industries and bring them into the environmental solutions.

And then secondly, Brian that we think about some of the operational challenges of scaling is really around all of the normal database organization, particularly when they scale right. They need a specialized roles they need an organizational structure.

Process right and you know I think Ben Horowitz actually gradually ultimately on this capex you talked about how you need to get great ground grudgingly.

And so I think we really try to balance like no I think we need to add specialization when you add process.

Yeah.

Sure.

But we don't want to get ahead of our skews on that because they had a constant and overhead.

Striking that right balance of giving rising rates, adding.

Thanks to our company I think is really important and really fortunate because the important members like Christian Henry Schein Hunker ladder back right now as a company as I said, they've been a great source of advice and guidance.

I kind of agree with Mark.

So in mining, it's upcycling metals.

Yeah, I totally agree alright.

And it's also cleaning up the waste from things like acid mine drainage ponds.

Kind of going back to Mark's answer earlier first firstly I'm kind of capacity that we actually have to go find demand. So in in January and that we're lucky to have you guys on the phone because you beat our commercial business.

In energy, we're improving the environmental footprint left behind.

Industry is really all about breaking down contaminants from things like you might have, heard of PFAS or perfluorinated compounds that are in your water or other emerging contaminants.

Maybe I'll start with you we got a question from from Barrow analytics that sweater, and saying how far into the future do you generally have visibility.

And that visibility and so I might just ask.

It's pretty spread around markets. It's not like one certain area is on fire relative to others.

Talk about kind of our sales cycle and process and what that looks like it can go and have an ability that merit is asking about.

So.

And plastics, we're working on upcycling plastics.

Yeah, I can give a little bit more color, Matt, just in terms of like how we think about the past, the 60s.

Yeah. That's a great question. Thank you for that.

So let me start with the deal process to really kind of provide a bit of context that question, Phil when we work with a potential customer on a project, we really start with a collaborative process.

So the there's really kind of three tiers almost when you were to look at our pipeline. So first of all, we've got existing customers that have already, in effect, earmarked money for Ginkgo programs.

So we heard earlier the sustainability manufacturing part of that.

But what we're looking at is those that haven't been manufactured sustainability that need, to be broken down.

We sit down with our customers to define what are their strategic requirements and from that we defined a specific technical needs and helicopters, we can actually support that.

And that's when we get kind of the early strive really figuring out what the project looks like then we enter into a parallel path. The technical teams really discussing with our customers technical team under specific requirement under what we call a technical development plan and in the technical development plan will define the deliverables and milestones.

Jeff gave the timeline et cetera, and the budget associated with those programs and at the same time. The commercial discussions are taking place and we have a cross functional team that really kind of drive those discussions forward going from figuring out what the framing of the deal looks like with the term sheet looks like all the way to negotiating the final terms of any.

Three men that includes all aspects ranging from economics and intellectual property terms. So once we complete that negotiation process and the technical teams had a defined and approved TEP in place we can kick off the project and that's where the commercial operations team are really kind of take center stage MBA.

But we haven't yet defined that program, nor have we launched that program.

And so that's money that's committed to Ginkgo.

But we still haven't launched a program and that so that's a source of new program growth in the future.

As with the customer to not only implement the collaboration internally. It can go but also to foster communication to make sure that the collaboration is that true.

As parents.

And as successful as possible so that process is not a two.

Can we process. It takes time to make that happen and so we have a number of deals there are moving through this deal process in any single point in time, and we're constantly monitoring and reviewing the status of these steel negotiations as it moves through the different stages in the pipeline.

And we're working on polyurethane foams and nylons.

So when we look at what we're working on and what Ginkgo is enabling us to do with, the synthetic biology development across those four areas and several projects we've been working on over the last year, we really believe that through this, waste is a failure of the imagination.

So we believe that we can help create a world where legacy waste has been remediated, where, post-consumer and post-manufacturing waste are upcycled into new products, and our climate is healthy.

The second would be an existing customer, where we they haven't yet earmarked money for a program. But we're in a conversation with them about what that what the next program could look like.

The pipeline includes deals that are ranging from very mature conversations where we are in deep discussions on the definitive agreement all the way to early stage conversations where we just signed a PPA with a customer and trying to figure out what the projects are that we will collaborate together and you have everything in between so during the.

All of this is collaborating nature with engineering systems to create those solutions.

And I'm incredibly fortunate and lucky to work with a team, and I'm going to ask them, to stand up and embarrass them, but really, I'm asking you, if you have any questions about what we're doing, we would love to talk for hours with you about it, so please, afterwards, let us know.

Process as we get more and more visibility into the technical development plan and understand what our deliverables would be we.

Have better indication.

What are what our revenues would look like because by the time the PDP in place we had a.

Very good visibility into the revenues that we would expect.

And so, so all of that sort of broadly speaking, falls into the category of really just expanding our presence within an existing customer.

Thank you.

Great. Thanks.

I think the first first half of the question, which is like how do we win customers and then we have to actually deliver for customers.

All right.

So Jan you in the past throughout our commercial operations team and now you've been both commercial operations of our fitness development and so and we got a couple of questions on scale up and for customer success from I'm, not even going to try to pronounce that person's name on sweater tops Guard I think what do you do to ensure a successful scale up to commercial production do you have pilot facility in Turkey.

And then and those are, you know, in sort of order of ease with which or confidence with which we can land a program in a quarter.

Next, we welcome John McIntyre, CEO of Motif Foodworks.

He's here to reinvent the way science is applied to make plant-based foods better tasting, more nutritious, and more sustainable.

Please welcome John McIntyre.

I love food.

The only thing I love more than food is science.

Every day, as the CEO of Motif Foodworks, I get to indulge my two favorite passions.

So I want to first start by thanking Jason Kelly, Jason Kak, Reshma, and the whole Ginkgo, team, as well as my early investors, Viking and Brian, Peter and GA, Max, Julian, for giving me the opportunity to lead and build what I think is going to be a transformative company in the food industry.

So thank you.

Now that I've said some nice things, could you approve that CapEx I sent out earlier, this week?

Just saying.

My company, Motif Foodworks, is totally focused on one mission. Our goal is to make plant-based foods taste better and more nutritious. We want to make them so good that people crave them.

All of that to the customers and then from Dominic go to the bottom line, how fast can you scale a molecule at what type of thing how many molecules have you scaled it what type of production. This is the bottleneck for synthetic biology.

And then the third tier would be a new customer that has never done a program with us before.

Not just say, it's a pretty good alternative.

And so we have a pretty significant pipeline of conversations like that. But that's the hardest to land and the least predictable to land in a particular quarter, because, first of all, we have to establish the beginning of a relationship, and then we have to define a program and then launch that program in a quarter.

I mean, really say, I cannot wait to eat this product that I know is good for me. It's good for the environment.

Sure. So a J as I mentioned earlier that we share in that piece of the value of our programs. We work on for our customers. So that means we don't just send over a mile of engineered organisms and say good luck.

So why is that important?

Consumers. I mean, when we're in the food industry, we talk about consumers.

And I see a lot of consumer-benefited companies being built here today.

The consumer is very interested and empowered in evolving how they interact with their food.

Food.

They are concerned where it's made, what's its impact, is it good for me, what, was the role of animal agriculture, was it a problem, is it something I'm concerned about?

But there's a fourth factor, and that's this.

You're saying, oh, it's an environmentally, thoughtful packaging.

Instead, we have to finance team that has expertise and fermentation scale up downstream process development QA QC and so they work both in the lab, we have here in Boston at headquarters also with <unk>.

It is that, but it's something else.

I'm putting it on me.

It's a badge.

Look at me.

I make decisions about sustainability.

In the consumer world, we call that badge value.

That means people are saying, it's cool.

I want you to see me do this.

So this whole plant-based food movement is cool, and that is a big driver in opportunity.

If it's so cool, you know, it's like the great money ball line.

If he's a good hitter, why doesn't he hit good?

So why aren't people buying more?

There's a lot of interest.

There's a lot of trial.

But we have not penetrated mainstream consumers to a great degree.

And if you ask the consumer, the first thing they will tell you is, I don't want to compromise on taste that much.

Our mid scale pilot partners that we have and also a contract manufacturing organization, we have a tolling arrangement for some products that we do rank ourselves and so that team has worked on a variety of our commercialization efforts to really scale, the number of compounds, including flavors and fragrance.

Early motivated consumers are buying, and they may repeat.

But the mainstream consumer buys, doesn't repeat, doesn't buy it every week. And then eventually, they'll try it again six months later, hoping it's better.

Our company believes you have to solve that problem.

If you look at the one product that is jumping over into mainstream, it's oat milk.

And why?

It actually tastes good, and it functions.

Now, longer term, I'm not so sure that oat milk isn't going to have some other issues, because it's really full of sugar.

So it's not so nutritious. But it does taste good.

Proteins other chemicals.

Elektron the market today.

When.

So that's sort of how we think about it.

You talked about what to what scale. So that's highly dependent on the product that we're making and for scale as a production status relative to that to the customer and the very high end with a scale that processes.

And it's less about kind of industry, I would say, I would say we have a significant amount of effort, across sort of all the industries that we play in.

But we may devote sort of more effort to one or to a particular sort of tier just based on sort of how quickly we can get a program launched.

Okay, and then Jason, as a follow up, you know, you walk through the Zemmerich and, Bayer transactions.

Well, both are different, both involve harnessing capabilities that were formerly internally focused at each company and leveraging them with your assets and turning them external.

So it's kind of curious, neither are closed.

But you referenced, you know, outside interest in the Zemmerich and Taylor spin assets, potentially, what kind of outside interest or kind of industry chatter or customer chatter?

Several hundred thousand years and.

And some higher value compounds production scale, it's something I think it's quite small.

Have you heard about those assets under your hood, and how customers might view working with you differently than perhaps they did before?

Yeah, I don't know.

So we work with customers in different ways, because our customers have a variety of expertise on.

Annamarie, do you want to speak to this?

I know you're, sure.

Yeah, I mean, obviously, fields haven't closed yet.

And so we don't want to get we don't want to speak for Zemmerich.

And but, you know, certainly, we've been speaking with our customers about both transactions.

Production themselves, so that might mean that we're transferring pat processes directly to them to air pilot facilities or their production facilities that might even we are partnering with them to find a sort of that supply chain.

And, you know, a lot of excitement, obviously, about both the expansion of capabilities, as well as the strengthening of our of our platform, in terms of the, you know, the event of interest you referenced, relative to the product portfolio, that that's about as much as we can and should say at this point, but certainly, real interest and an opportunity to see additional value there.

Okay, thank you.

With the with the bear asset, you know, I think what's really exciting about that is, you know, they had an in house team that was, you know, You know, this is a group that was originally acquired as a company called AgRequest.

Thanks.

All right.

These, are folks that have been doing this for, you know, 10, 15 years in the ag biologic space, real domain experts.

And they have a lot of assets, things like again, I mentioned manufacturing and, you know, formulation, all this sort of stuff.

But they also just know, you know, where the, you know, the things that have worked and not worked in ag biologicals over the years.

And so their domain expertise, then with our leverage of our automation robotics to sort of speed that up, I think that becomes a really compelling story.

Manufacturing company that would work for them in some cases, they're on the market Tobias if already themselves.

So that's, that's one of the things that's pretty, exciting about, it's not just facing it outward, that is part of it, it's also speeding it up by putting it on top of Ginkgo's platform.

So I think together, it's pretty cool.

And there's nothing like it, in my view on the market.

Yeah, thanks, Jason.

Awesome.

So a variety of models that we work with customers there.

Hi, I'm Kay Haas from Morgan Stanley.

Oriented around getting products to market and then you asked a question about how fast is that but I think China is highly dependent on scale familiarity with the processes what the capital requirements are.

I've opened your line.

Hey, guys.

Good evening.

Can you hear me?

Okay.

He themselves and so it because we've got such a wide variety of hard to answer that directly.

Perfect.

We do have a couple of tricks up our sleeve to speed that up one of that is that we have are iterative nature of engineering organisms. So often we're able to transfer.

Yet streams that they can start working with right away.

Both gives us feedback back into our engineering process as well as <unk>.

The scale up for commercialization.

Okay, great. Thanks.

So our goal is to solve both issues.

Once one small bit to it again to hammer home. This idea of the App store right, though what other things youre going to get on the tech side by participating in an app store ecosystem as they're going to help you with distribution right because they want you out to get out to as many customers as possible because the mobile phone companies going to be collecting AR value every time you sell that.

Or when someone does purchase threat.

Very much the same.

<unk> team on operations, we want these cells to go to market because ginkgo is going to get value back when they do so this isn't like an adjacent capability to our cell programming, it's kind of like yes, I will give you the program there.

The SDK and the distribution I think it's going to give you the CDK and we're going to help you with deployment in fermentation through our partner network right and Thats, a 100% in line with our business model here.

How about how about clarity things Nathan Youre.

Youre getting that up to like 32nd explanation.

Maybe we won't get that comment, but our next investor day.

[laughter] everyday lives.

And thanks, John for that kind of help understanding sort of how we.

How we work with our customers.

Come up with that collaboration maybe just thinking now touch on a couple of areas of growth that I think are really capturing everyone's attention and there are two sectors that sort of pharma, which is certainly a real growth area for us, especially over the past year and then bio security. So maybe starting with with pharma. We got a question also from Barrow analyzed a lot of questions.

So what are we solving for?

What areas concerns are the most readily applied to right now in the Biopharma sector and what if at all different vision Rins. Unfortunately, not here with us. So that worked there I'll be joining the board and let you know can you talk a little bit about how how we're approaching pharma quite pharmacies in our platform right now yeah definitely and thank you again for the <unk>.

We'll start with what I would call the usual suspects, which is, how do we make alternative meat products taste good?

How do we make alternative dairy products taste good?

But then even going further, how do we improve the nutrition of products that are plant-based?

And when I say plant-based, that's one option.

We're super excited to have already on the board.

So now, I'm going to throw myself under the bus here.

But you could even extend it to all meat free.

If you look at why the products don't taste good, you first start with the fact that the, proteins, the raw materials, the big bulk of what happens in making a plant-based food are with starting materials that are chemically and physically very different than replacing animals.

So for example, there's a lot of companies working on microproteins.

They still have taste problems.

We're really looking forward to working with them and getting his insights and advice into some of the areas that we're really excited about so this is just a huge breadth.

Our capabilities and technology will absolutely deliver against those as well.

There are many many areas in pharma that we're really excited about and it ranges everywhere from like the drug discovery and development process at the front end.

To the manufacturing process.

At the tail end, whether the drug candidate has been SBA approved I'm just to give you. An example of some of the projects that we've done so far so any areas mrna vaccines, which now we all know what how valuable they are and what they can do.

<unk> worked with military and we're working with others as well in this space in the production of key raw materials in the manufacturing of mrna vaccine.

It's going to be an area that we will continue to focus on and we're really excited about.

The different possibilities of using our platform to improve the manufacturing process.

Important therapeutics in life.

Life saving therapeutics in many instances, especially as those are being used for cancer.

We have a deal that we announced not too long ago with Biogen, where we're developing a nextgen AAV production platform for gene therapy, and that's a really exciting area for us is to be digging digging deep into them. We previously have signed a deal with Roche, where we use our genome.

<unk> platform to discover novel antibiotics.

That is left in the manufacturing side and more in the upfront drug discovery and development side and along the same category in drug discovery and development. During Covid, we worked with a small on AI.

AI enabled.

Discovery company called <unk>. They are now required by upside where we used our foundry to help expressed in screen thousands of antibody candidates that they haven't covered during their computational process and find those that are neutralizing against COVID-19. So that's an exciting area that we look to do more in.

And the antibody discovery and development area.

We're also working with others to improve the manufacturing of API small molecules and biologics.

And we're also excited about cell therapy. There is a lot. We can do in the area of cell therapy, whether it is to optimize the car construct to make them ultimately.

More efficacious and more manufacturable as well as working with.

Manufacturers of cell therapy to help make their processes more robust. So the way we see pharma is that as the apartment sector continues to use biology as a way to develop novel therapeutics or improve new or just discover or improve the newer modalities will continue to see new applications of the kimco pounds ready to help.

Specific biology cell programming problems and what we're seeing is it's precisely that there's there's <expletive>.

More of the new pharma companies and Big pharma companies are looking for specific ways to address the near term challenges. They now see that's how programming is a very very valuable enabler to help them get to their ultimate goals.

They don't work well.

As a near its never it never too late on the pandemic to figure out how to and get yourself.

So maybe one on biosecurity, Jason, or perhaps even Mark, have you given a samples per, week sort of run rate exiting the quarter?

So that's one really important growth growth area for us alright. Thank you.

The second area, that's obviously been.

Newer.

Really impactful.

Security specifically.

Perfect.

So Matt I'd Love you to talk about another elephant in the room I think it was like what happens if I'm getting my hope it's over I think we're all hoping and praying that might get back to normal.

What what happens to this business in 2000 22023.

I know you've given that in the past, just so that we can get a better sense of how things are trending through the year.

Here's where I throw myself under the bus.

Yes, Thanks, Anna Marie and look I think this is a.

You know, you did about 250 million year to date in revenue, your guide is sort of at least 260.

I say, for 20, 40 years, we've been trying to fix that by what I call mask and modify.

The first part of this is everybody has experienced right. So I.

I think it's very clear that globally Covid has shown us the need for this forward thinking technology first integrated approach to Biosecurity biology has caused massive massive damage over last year and it's something that we feel very strongly and have been working on as a team for the last 15 months that we can do something else.

But thats a pandemic moment right.

The second piece is really important if you think about building a biological engineering platform doing what we are doing building the app store.

The digital Revolution.

Revolution as a as a metaphor.

Metaphor right cyber security is a massive business.

To enable the digital ecosystem to work their.

There will be a massive industry at some point in bio security to power.

Biological manufacturing Revolution, and it is something that is that we feel very strongly about from a platform standpoint.

Because biology, so powerful we also need to be building the tools of Biosecurity for that purpose. So for us. There's this two sided.

Mission orientation to build the platform and it is.

Secure and transparent and caring way, whereby our security tools, but also to help respond.

To pin down makes this this is not the last pathogen that will have pandemic potential and so the direct question of what happens to the business is really an interesting one.

It's pretty clear to us, it's a matter of scale and timing not really of whether it will develop.

We're seeing indications that governments are taking the response to this pandemic very seriously private companies are thinking about biosecurity looks like.

In the U S alone we think.

The reports are 16 trillion dollars of economic output GDP loss due to this pandemic people are saying, we should spend $20 billion to $40 billion a year to protect the world from next Pandemics.

You know one of the major providers of K 12 surveillance testing across the country is something that's a new thing that people haven't done in the past. So we're excited about it but we're also cautious because we're still in the midst of the pandemic right. So from a from a standpoint of like what we're looking at how we're thinking about it how regarding our partners and otherwise.

It's both of those excited important long term mission component and being cautious about setting setting what.

And what time that will become a really large and robust market.

Ultimately something that were we care deeply about and we're spending a lot of time on.

Thanks, Matt.

And the second element of care, that's I think really important to us really really nice question that we got in the bag.

And where do you draw the line with requests either from and if it's for you Jason from either commercial or government sources that may raise ethical concerns.

Like you said from the resolved are you prepared to deny reclassify cross that line despite potential revenue locked it.

Yeah. This is a super great question and Matt touched on this but we do think it's really important to note that we do care how our platform is used in the world right.

We enter an era, where you can program it sounds like your program computers.

That's a big deal.

He is responsible for.

Our food our atmosphere clean water as we're living through this pandemic our public health.

And so starting from our footing that we do care what happens with our platform. It isn't just as simple as well in order for someone pays for it is an important is an important line to draw.

I'll point out one of the things that was really interesting during COVID-19.

I think it will actually I think governor Patrick touched on this.

During the Investor Day presentation, we said you know.

It is a false choice between like doing good and bad.

Making money being a successful company is not quite so simple.

I agree with that I think people frequently imagine okay. The thing you're not going to do and not make money doing but what we also saw during the pandemic is.

It was so volatile things are moving so quickly and there are all these questions of like can you do that and you would make these decisions to say well I don't know if they're going to get schools open is it going to help this they can society, yeah, right right and those are carrying how your platform is used to right. So can also be ways that would actually lead to expanding the business.

Yes.

If it if it's the right thing to do right and so I do think this is an important.

But going forward I'm not going to pretend we have it all figured out it's gonna be a collective question for society, how we want to deploy engineered biology in the future, but we want to start by saying we care how the platform is yours.

Thanks, Jason.

Just about out of time, so I'm just going to do a couple of more questions.

The next that are for me so can I just like the Twitter handle so I'm going to read them off.

And if it's around the prospects here.

The stock transaction.

Back Doggy dog wants to know when we expect to take care of the changed June DNA.

And then a couple of other folks ask them, what's the status of the S. Four when do we believe the final one will be filed.

Profit showing them.

One just expect it to close them. So nothing nothing at this point that would indicate any change in the timing, we're still expecting to close in the third quarter of this year. We have received the first round of comments from me and I would expect to file our first amendment sometime next week and obviously, we can't control the timing of efficacy.

You bet.

So expect that we'll be closing in the third quarter, but I can say at this point can't provide a precise date, but we'll update that.

Backup.

All right. So last question here is it's pretty near term.

There too that are related.

So cosmic <unk> wants to know how long until I can code up a full on fire breathing dragon in my garage. Because then I can launch nine Dragons and bagels business, and then Chris as well, but like to add if I can add if he can be the first one to fly by now.

Yeah. So.

20 years.

Yeah.

And are you making.

You're making crisp.

Or how to code base, Patrick but yeah.

And that is designed more for batik DNA that anyone on planet Earth, Patrick but what's your what's your estimates on dragging a lot of plus or minus five years, so that estimate of <unk>, but that is what.

What would it is it different.

Alright.

Gary cost that we'll be able to pet coke fire breathing dragon in his garage.

And Chris is going to be able to be the first one to fire dyno or youre going to run.

I think we'll have to have a charity auction for who gets too.

Alright, you're hurting our job here at <unk>, we have a yeah.

That'd be the first one out of the Dragon should be worked out here.

There's a diner flying dinosaur.

Okay.

Okay.

Alright, well I.

I know, we're about out of time here.

And everyone has spent a lot of a lot of time with us today are learning about the business.

I'm trying to say a heartfelt. Thank you to everybody for joining us today I'm spending your time learning about them.

Jason I don't know if you have any parting thoughts bagdad, but we're wrapping up wrapping up the day here and look forward to being able to hurt you guys first time hopefully next year.

Yes, thanks, everybody for the time today really.

Wonderful to have a chance to speak with you all.

Yeah.

Yes.

We just announced that we raised to $78 million steering day add to launch our cat to change the value chain in Australia.

Any industry, that's inspired by creativity and always looking for new ways to be able to express ourselves and there's a tremendous opportunity to change our supply chain and to also create ingredients and products that are aligned with modern consumer mountain.

I'm definitely not gone ahead, and this is ginkgo format.

So just curious as to what the exit rate was.

Let's throw a, bunch of flavors at it.

Welcome back everybody from lunch I'm Super excited about this session, we're going to hear a bunch of lightning talks from developers that are building new applications on top of again goes platform.

And I want to take a minute to introduce the person you have been hearing from all morning, Jake Wintermute down here, who is our new developer evangelists for the new role here at Ginkgo Bio X amount of bonds with Jake and he'll be you'll be seeing this session today, so take it away and Jake.

And perhaps, Jason, on your point on concentric and the 60 million plus that it could accrue over time, any sense of, you know, from the new CDC contract that is just curious as to any sense of the timeframe for that revenue to come in?

Let's try to figure out a way to cover up the taste.

Yeah, yeah, I'd be happy to take the first part of the question, the exit rate.

Alright.

Yeah, I know, what you're thinking first session after lunch low energy no no.

We're not doing that.

This session is special.

Ginkgo is not the start.

Right now our developers are the stars.

We're gonna be hearing from some very cool companies that use <unk> platform to create their own products with biotechnology.

Now I know the relationship between a platform and a developer can be complicated.

Kim.

I think I can capture it with this metaphor.

Are there any nerd in the audience.

Yes, do you know who you are you know who you are okay. So these companies.

Frodo Baggins and Sam was games.

They are Batman.

And we are Alfred.

And he knows their Princess Leia.

And weird Chewbacca.

That's what it means to be a platform, we got a play that supporting role well.

We want to empower these heroes so that they can go out and save the world and we can always be here with the biology that they need to do it.

So I think the, best way to think about it is Q1 was very strong. And the business to a large extent was really hitting on all cylinders across the states that we were contracted in.

And I was the head of R&D for the largest plant-based protein company, did that exact, same thing.

The first developer will be hearing from is it just me now I can know Vic.

She is the CEO of our Korea, where they are building an ingredient platform for beauty.

And, by the way, worked about this much, and it no longer has any more runway.

New category of ingredients powered by biotechnology.

Please welcome Jeremy.

[noise]. Thanks.

Both April and May were strong.

Alright that is an excellent excellent analogy. So so excited to be here to be sharing our kao with you.

And then the first half of June, in effect, performed as we would have expected it to, but then you see a very significant fall off as the school season finished. And so you end the quarter, or the latter half of June, at really sort of a de minimis level of testing in the K to 12 market.

Every other science in life sciences has embraced cutting-edge technology.

Special day yesterday, so we officially announced our theory days to $78 million. He started this company to change the entire value chain.

Now we have some testing that happens outside of the K to 12 market, it's relatively small, that was more kind of steady.

We were expecting the same really in terms of July and August, and then September is more of an unknown for us. But the exit rate in the quarter, just to answer your question, I mean, we saw as we expected a very significant fall off because the schools just don't have need for testing through the summer months.

Got it.

Right.

Thanks.

And.

It's also really incredible to think about the types of partners that we have the partners who are deep experts in various parts of the value chain. So finished products with iconic brands of course like none other than Chanel hard to compare to a brand like that.

<unk> incredible also iconic ingredient company and then fantastic partners with Kimco Viking Cascade.

So fortunate to have such incredible partners alongside to do this tremendous thing and today is actually like pretty cool to be doing this for me personally because my first job in the beauty industry I've told a few people here. So they already have the spoiler, but my first job in.

Food and nutrition is late to the game.

We as a company are interested in understanding fundamental issues with how foods perform. In doing so, we have the ability to create new discoveries.

The reason Motif can do that and others can't is because when I discover something, I don't, have to invest tens, hundreds of millions of dollars to generate technology to make those.

And the beauty industry without a brand called fresh which is an L. A M H on France.

And their office with literally right across the street from this building.

So it's an amazing full circle moment for me.

And I want to tell you why it's like especially impactful to think about started my career and then also the prospect of what our KAR is doing.

And as a reminder, right, you know, what we've been doing, I think we'll at least, continue this for a bit on the biosecurity side is just given it's political, we all understand this, you know, and so we've been conservative in our guidance to say, you know, tell you all what we kind of know we are, you know, have a sense, so we have a good shot of hitting, but let everything else be to the upside.

I have partners.

And so we've done that for, you know, a few quarters now, I think that's served us well, it just to be realistic about the kind of situation on the, ground with the schools and COVID.

So to understand our chaos, we need to back up a little bit.

Got it, that's helpful.

So I'm allowed to really be at the cutting edge of the science and then use my partnership, with Ginkgo to find and develop those new products.

At least two years ago.

So when I joined can go as an entrepreneur in residence.

There's a lot of people have asked me like entrepreneur and residents, but is that what did you do.

So I'm technical background I got my degree at M, I T and chemical and biological engineering.

It was not that long ago, but even walking into gingko and looking at this thing here that Carmen is looking at either a little tiny fermenter is just like a robot that do it all kind of in high throughput Super automated I didn't even have that in school and man do I wish with some of my Kennedy classes that we were working off of these babies instead of what we had in <unk>.

And then one related to foundry, and it's sort of a phasing question, but there's a near term component and a long term component, right?

We use a holistic approach to innovation.

Paul.

So.

My entrepreneur and residents started really with understanding what the heck is this thing called the foundry.

We analyze food with new tools from other industries.

I'll tell you right now right I'm technical chemical biological engineer, So I should have familiarity with this.

Believe me when I say, even for me it was really intimidating to understand what the foundry was so for anyone in the audience right now that like some of the foundry is like saying at this conference and it's like this sounds really cool, but like.

I'm not sure I understand 80% of what they are talking about that is totally normal and I think what's really exciting about what is so new and impactful and empowering about what is happening here.

So my office as an entrepreneur in residence, if you will it looks very different from my office when I worked at fresh when I first started my career and that is so so exciting to me.

So in the near term, Mark, I mean, you are calling for foundry revenue to, you know, I think you did about, and it was mid 60s or so in the first half, you're looking to, you know, do more than 100 in the back half of the year for your guide.

We discover new ingredients with new tools, like synthetic biology.

So just looking at sort of any color on the cadence of that ramp, you know, is it going to be sort of roughly equal across quarters, or is it sort of heavily back end loaded at this point of the year?

Yeah, I'll start it off with understanding the foundry what it is what does it mean to do biology and high throughput what does automation software biological cells, what does that all mean and then.

And then Jason, on that point you made earlier, around program choice, and that being an important lever for you to pull, especially in the current market context, and you know, the focus on cash and make even etc.

And we design simultaneously.

We are a food tech company, not a biotech company.

What does it mean for the beauty industry.

I'm, taking my industry perspective, and my interpretation of the industry, where it was today, where it needed to go tomorrow and coupling that with the foundry. The foundry is capable of today with the foundry is capable of tomorrow and many years in the future and how do you marry those two together and it really.

I'm curious as to if that has any implications for, you know, the foundry revenue ramp over the next, you know, 12 to 18 months or so.

So, yeah, so Tejas, in terms of second half of the year boundary revenue, I would look, at the, so first of all, there's a very meaningful contribution that we expect from downstream value share in the second half of the year.

So that's sort of the first important point.

And what that really means is, I can't tell you today what the sort of Q3 versus Q4 will, look like, because that, as you know, just by definition, can be very lumpy. And so, and there is uncertainty as to sort of when that lands.

And so, I think, you know, I would just look at it as a second half, as opposed to really, trying to kind of parse the two quarters because of that.

Powerful and impactful way.

With respect to boundary service revenue, I would expect that more or less to be executing, the rest of the year sort of in line with how we did in Q2.

We're solving food issues.

And Jason, do you want to chime in on the program choice?

Yeah. So, yeah, I mean, I think the point I was trying to get at there, I think there's an, opportunity to offer like sort of more standardized services that then lead to, you know, I would say like smoother ramping into boundary service revenue.

There's of course, the I'm going to start with a problem and I'm going to solve that problem using biotechnology in many many important problems are being solved actively by biotechnology, you're already seeing that earlier in this conference, especially with our response to the pandemic.

It comes with the challenge of like trying to sell a more standard service to a customer, versus more of a custom service, like the standard service could have the pricing be more standard, right?

So, instead of, hey, if a customer wants more downstream value share, that's not an option, you know, right?

It's just more upfront, it's more fixed, you know, right?

That would make it, you know, sort of easier to more smoothly ramp boundary service revenue, but it would come at the cost of two things, one, you know, probably some less downstream value share.

And number two, which is more significant that we want to make sure we don't screw up, is making it harder to sell, right?

You know, you don't want to make it where people say, well, I really want this, Ginkgo, but you're offering me this and you're telling me, you know, it's my way or the highway.

And they say, they'll take the highway.

So, you know, we do want to be careful that, you know, we're not getting too standardized, but that's what I'm getting at with that lever.

And we are seeing it.

I mean, we've been doing a bunch of these sort of protein CDK deals.

Those are really great.

Biotech is a great partner for us. From that, we generate ingredients, ingredient systems, and full products.

The beauty industry presents this other element that I talked about a little bit today, but it's especially present in this industry.

Creativity.

<unk> expression and self care.

It's in this vein.

How does Ginkgo help us?

And so as I was looking at the foundry as I was looking at the beauty industry. There was also this element of creativity.

They provide us strains that produce our targets at very, very high level, but maybe do something, nobody else could do, pass the complete opportunity of biology.

So I'm pretty bullish about where that could go, but I want to just be a little careful.

I don't want to overdo it.

And so.

Creativity as it relates to the functional building blocks of what this industry has to work with is really interesting because right now the building blocks for the industry. How ingredients are made come from things like that straight as an extractive relationship with our environment, We're taking things from petrochemicals from plants from animals and this is how we are cream.

Got it.

Egg whites are important in all kinds of food applications. There are companies that are trying to express ovalbumin, the main egg white protein, from, a hen.

Who says that that is the best protein for gelling, foaming, binding that you use egg, whites from?

Thanks, guys.

Real-time work between our two companies, hundreds of different species, dozens of proteins, tested in a matrix to get the best version to the market.

Very helpful.

Thanks, Tejas.

Steve, you'll be up next.

<unk> ingredients.

But first, I'm going to take a question that came in during the call into our investor, inbox.

Nobody can compete with that.

So then you look at something like fermentation and biotechnology and you can say Oh, but this is how we can create the next generation of ingredients.

The question is around Zymergen.

So we're in the market today with two products going commercial.

One is a protein that produces taste and color in meat called humami.

The other is apotex, a plant fiber that significantly improves the texture of meat.

You will get to taste it at the cocktail hour in meatballs that are going to be available, to you.

A question from Sean, how do you plan on managing Zymergen's debt if the acquisition is successful?

I'll go ahead and answer that question.

We have a portfolio of ingredients coming to market over the next three years, which, we're aggressively pursuing in partnership with Ginkgo, as well as our other avenues.

Absolutely.

And we hope you enjoy those meatballs.

But where are those further is our K it looks at something like that since that's how can this be a creative tool.

We had a slide.

All right.

How does this create something new how does this create something that was not previously accessible through the current toolset the smokestacks the extractive relationship.

We had a slide on that.

Yes.

And so our K exists actually to create something new to build around biology, rather than to try and fit biology in the existing construct of the beauty and personal care industry and that is actually a really big shift.

So the company actually repaid its piece of debt in the second quarter as planned. And the only other sort of long-term liability of size is around their real estate, their, long-term leases, which we addressed in the presentation today.

And we will be looking to consolidate our real estate portfolio on the West Coast now, that we'll have both our facilities as well as Zymergen's, so we'd hope to manage that over time.

Again, we haven't assumed that we can, but it's certainly something that we'll look to do.

Developers.

All right.

Developers.

What is this was the ingredient pilots that we were working with in the beauty industry right now, especially with where the beauty industry is going that pilot is actually getting smaller and smaller consumers don't want things from petrochemicals consumers don't want things from animals consumers want things from plant.

Anything you would add, Jason or Mark?

By the way if the entire beauty industry was going to switch to just plant based sourcing there would not be enough plants that could grow on this planet.

All right.

To serve its one multinational supply chain.

Steve, I'm going to open up your line.

So there's a very real supply problem, there's a finite source of resources, we will be forced to move out of that sort of thing.

So the industry right now is just been whittling itself down to just that part of the tree of life.

This is the part of the program where it's my job, to try to tie together all these developer success stories that we've just seen, and I think I can do it with this very elaborate metaphor.

But I look at that and the ZIP, replacing what we already have I think about expanding the pilot what if we could access anything in the tree of life ethically and sustainably.

Great.

Do you guys like ribosomes?

Can you hear me?

What kinds of functionality would we open up that we haven't even imagine for the beauty industry.

Oh, perfect.

All right.

What types of stories can we tell them.

And how can we fundamentally harness.

Iology our own biology is the next tool for self expression.

Any, ribosomes?

So that's what we're doing at our chaos.

Ribosome fans in the audience?

We think about this as the next foundation for the beauty industry last 200 years are built on industrial chemistry, that's how we constructed our ingredients that's how we constructed our formulation.

Yeah.

The next 200 years theyre going to be built on biology.

So a lot of ground already been covered, but I got a couple on biosecurity and then one on Bayer.

Right?

And so I started talking about this notion of biology as a tool of self expression, we are calling it expressive biology.

This term because first synthetic biologists that means literally expression of things outside of cells right you Express a protein for yourself for.

For consumers its about expressing yourself and I loved the duality of that language.

What else does it mean.

Industrial chemistry, our current product they think about coding your hair for example to make it feel a certain way to make it feel softer smoother shine here biology looks at your here from an amino acid perspective, and it looks at every single amino acid as something that it can influence and change in a way that aligns with how you want to express yourself.

So fundamentally different way of thinking about the tools that we have.

And so what we're doing is creating both ingredients and brands. So if we're going to create this shift we need to enable the industry by giving them the same tools, but.

We also need to push the boundaries and we're going to be doing that through products of our own.

And so the question that I pose as I am here is what can we re imagine can we change how we think about Sun protection can we harness the entire microbial ecosystem that exists on our skin to manufacture 24, seven what our skin needs when we want it.

Can we create proteins that memorize, how we style our hair. So that we can control how do you mean no assets within our hair follicle I'll start to respond.

So stay tuned, but really excited to be sharing this with you today. Thanks, everyone.

All right next we welcome Sasha colder Sasha is the head of sustainability at Juno Medica, where she oversees their efforts to bring the circular economy to plastics apparel cleaning cosmetic.

Yeah, we like ribosomes.

<unk> and nutrition.

Please welcome Sasha.

Okay.

[noise] Hi, everyone. My name is Sasha caldera, and I'm, the head of sustainability at Cana, Micah, Hey, Youre, probably thinking what.

But first on biosecurity.

So you look out, you go out in nature, right, and you say, oh, there's an oak tree, there's a human, there's a yeast, there's a sea squirt.

I know, Jason, you said that you're being conservative on the biosecurity guide, but what's your take on the anticipated return of flu this coming flu season?

And can you confirm if you have a combination COVID flu test offering available?

And it would be easy to say, well, they're all doing different things.

Yeah, so I think if you look, early signs are that we're headed for a pretty bad flu season. So and I think the challenge there is that's going to create sort of confusion around what is COVID, what's not, what's flu and so on.

And then I do think, like I said earlier, I think we will eventually look back at our current sort of approach to monitoring of infectious disease, kind of like we were all living in buildings without smoke detectors.

As the head of sustainability to hang up here with this incredible lineup at Ceos at Santa Monica, We do things a bit differently put sustainability regeneration and resilience at the center of our business model.

And that seems crazy today because we don't really have the technology for like simple passive monitoring, you know, like your phone just telling you if something new is in the room, but there's, there's no reason that technology can't get there eventually. Like, you know, the physics should allow for it. So, so the, so, you know, yeah, so I would say that, like, I think that that sort of thing will come at some point.

So I don't think we've commented publicly on what we're doing yet in flu so I don't want to say anything there but but I would say that eventually I do think that sort of thing should be present and I think it should help distinguish between, you know, flu and COVID, so that ultimately you can keep congregate settings open in the event you have these sort of waves of infectious disease.

Okay, got it.

They're all doing different things.

Talk about it for the next state minutes and what it looks like so before I get started I wanted to give a little bit of background in the late two thousands I found myself on wall Street interviewing concentrator is to understand how they perceived risk what matter to them I was studying the sociology of derivatives what matters most as we construct the financial models.

They have nothing in common. But my biologists know that under the hood, all of them are running on ribosomes.

That's helpful.

Right?

Maybe just a follow up to that, you know, you know what what's your read on the level of commitment by the by the US and other governments because, you know, I don't want to look back, you know, I'm using like COVID testing as an example, in 2020 and 2021 you know arguably the ball was dropped there in terms of deploying the COVID testing dollars and also, you know, tests which are bought, you know, just what's your sense on the on the commitment of the US government to bio surveillance going forward.

Well, you know, I can think of anything they announced today with the CDC is a great, you know, a great start.

So, so I think you know ports of entry seem again like another no brainer thing you know right like the idea that we wouldn't monitor infectious disease, at these nodes where people are coming in from all over the world seems crazy.

You know, I think the monitor and you're seeing around wastewater that that'd be, you know, that's more at the state and municipality level I think that sort of thing is going to stick around, right, so, so, and then I do think you're also seeing dawning awareness.

Okay, got it.

Right?

Just around on the unlike kind of the defense side of the house you know right like these are national security threats.

And so you also need from a defense footing to be monitoring just like we would have, you know, we'd be monitoring for, you know, missile, defense, right so you know we have satellites it's one you know we want to look out for weather natural events that could be bad we want to look out for missiles right you know human intent events that could be bad, you know, so I do think you'll see a sort of a mix where it's not just going to be public health you also see God from a readiness and sort of monitoring standpoint, getting into this as well.

To understand how companies understand their own risk and what I thought was so interesting well talking to these clients is that when I ask questions of what does it look like to have.

My chain resilience, how does the natural disaster impact here reading of the company's risk.

What does it came in right to be used to on our supply chain for a reputational risk and how are you thinking about an ever changing climate. The answer was often we haven't started thinking about that yet, but one day, we well so I'm really happy standing here 10 years later that we're really thinking about it with an ever changing environment and planet.

And then if I can sneak in a quick one on Bayer.

So I reckon sustainability and I promise you. This presentation, we will have no beautiful so it is a kid's halting plants.

And our thinking about the greening of our operations of course, do you imagine that world as well, but today, what I really want to talk about the sustainability.

Can we give it up for ribosomes?

So given the fermentation capabilities, of the Bayer facility, will Ginkgo be performing manufacturing for other customers?

Can we?

Is that enormous business opportunity that we have we all know that sustainability is more than just the environmental impact that we have thinking about having life on a habitable planet. It also relates to social justice and and social impact up and down and supply chains.

And is that getting away from the core business of Ginkgo?

Here at the Ferment Conference, if nowhere, else.

So for the institutional investors and multinationals and the room, you've probably seen that before the United Nations put together the sustainable development goals, which gives us a full spectrum understanding of sustainability. It goes far beyond just environmental sustainability and hits, the very interconnected nature of the.

And could there be any conflicts of interest with other partners from, you know, IP or competitive fronts?

It's not just ribosomes.

Yeah, so just for clarity, so it's sort of like a pilot, you know, it's a pilot scale, manufacturing.

It's not just ribosomes.

It's membranes and DNA and central metabolism.

There are a lot of these functions that biology does very well and the same in everything that lives.

The crises and the solutions that are required to get there.

So I think I think the large, I don't want to get it wrong, but it was a 300 liter tanks and sort of where we're at there.

Okay.

So and the big risks nerd and every year the World Economic Forum comes out with the top risks.

So it's not, it's, it's great for doing production of biologics to go into trials, it's good for very small volume things.

And that's what this risk profile it doesn't look very different than past years, but as we can see the top risks to business and to our planet are mostly related to climate.

But if you ultimately were going to go to large scale production, you would go to a different place.

So now to walk this metaphor over to business, to business, Ginkgo's business is to find the ribosomes of the biotech industry.

What does that mean for our business we have huge risks.

You'd probably see them, that's before and you know our climate is changing the IPCC put out a report that shows our climate is changing.

We can't build every, company just like we can't build every flower.

You need the genius, the care and attention of a designer to get all the details right.

And so whereas business business is responding to this changed we're in the midst of an incredible energy transition.

We're in the midst of a mobility a transition of food transition and why do we think Etsy in America, where do you believe that there is a library of transition happening just earlier this week at the Green energy has done that in Saudi Arabia, Larry. Thank the CEO of Blackrock said that his belief that.

So it's I know, I don't think it would be conflicting with our customers or any of our contract, manufacturing partners.

Okay, got it.

Thank you.

The next 1000 unicorns are not going to be social media or technology company is there going to be a company is solving for green hydrogen.

Thanks, Steve.

Green Agriculture, Green steel and green chemicals materials and infrastructure restructuring the world that we live in.

All right.

But what we can do is we can find the core foundry services that support an entire ecosystem and then do those very well for as many partners as possible.

This is a huge opportunity.

Okay.

And we're really proud to be leaving the materials transition.

We know it's a five four trillion dollar opportunity to replace ingredients and materials used in our products every day.

The shoes that you wear the clothes that you put on your body that every day as you're getting ready with care hopefully brushing your teeth souring.

The very infrastructure every life is being replaced and we have the solutions to do it.

The next speaker is here to bring forward one of these new foundry services.

I'm really proud to work at Santa Monica, where the sustainable source for rethinking what the material transition looks like sometimes when people talk about sustainability. It can feel super far out, but we have spent the last 20 years not just daydreaming about what this amendment looks like to deliver sustainable materials. It's been my team's day job for over 20 years and with this increase.

One moment in time.

And Rahul from Raymond James, I'm going to open your line.

Please join me in welcoming the head of code base at Ginkgo Bioworks and a man who loves, ribosomes even more than I do, Patrick Boyle.

I thought Jake was going to introduce me with a different metaphor, which is you've heard, from Frodo.

So military three case examples of products that we've already commercialized that are in market and walk you through a little bit about where we're going as well.

First is brought in tied it's a natural butylene glycol. We're currently producing over a thousand tonnes end market and it replaces.

<unk> made with Cornwall, carcinogenic Petro materials, it's a 100% renewable and side by sides are petroleum based product saves over 51% greenhouse gases.

And just so everyone knows, we'll be ending at 5.45pm Eastern.

Now I spent the last six years working in the beauty industry and clean beauty and this is a huge amount that the beauty industry customer and consumers are demanding traceability responsible sourcing and beyond they want sustainable packaging and with Brontide, We're able to show that it's not just what's on the outside it's what's on the inside that also counts.

So we'll, we'll try to get, everyone in before that if possible.

Hi, great.

Can you hear me?

Hi, my impact chunky and I.

1000 times is just the entry point I imagine.

Or does that magnitude of that.

Yep.

One for butane dial BDO, which is commonly is it's a precursor for things like spandex or maybe in the short falls of your shoes.

We're now producing and have a line of sight for 100000 ton capacity. It's a 5 billion dollar market with 2.5 million tonnes produced each year.

We currently have multiple chino plants currently and they're being felt.

And I love this land it saves over 90% reduction in greenhouse gases next to the harmful call based alternatives.

Next up is nylon and this is a really interesting case study for US we work with a lot of lifestyle portfolio of materials and we also work in the industrial space, but nylon is it Brexit that nylon touches everything from apparel, our apparel to outdoor performance to automotive industry and it's a <unk>.

<unk> 2 billion dollar industry.

Panic gene nomadic either earlier this year Lulu lemon and that's at M. D. In America as their first ever sustainable materials, plus disrupting and able to hope we're helping them hit their goal is to have 100% renewable ingredients.

Nylon is the number one.

The product in their portfolio from a volume perspective and were shifting it to 100%.

Good afternoon, Jason and Marie.

Biobased.

Great that's getting started and we're having a big impact and we know that we can't do it alone. We're so grateful for our partnership and collaboration.

Believe that many hands like work and it's with partnerships with folks like Gingko, who help us accelerate our thinking and bring these technologies to market at speed and scale.

So as we said that's really a golden intersection and crossroads in the industry. We know biotechnology can help us solve the climate crisis in new ways. It can help us in March and where we're going and where we've been but social justice at this center, if Sylvia sense and care about our neighbors partners person.

All health and the health of our planet.

I encourage all of us to elect in nature for the most beautiful design spent a lot of time thinking about sustainable packaging can you tell me out of the more sustainable package. That's been designed as we continue to move forward I hope that we continue to think about what impact looks like and how much more holistic way. Thank so much and join us and.

The transition.

[noise] [noise] alright.

Now you have to hear from Samwise Gamgee.

Mark, thanks so much for taking our questions.

Do we have Mike Gordon skiing in the house, yes.

Yes, we do Mike is the executive Chairman of Kronos Group, where he leads their mission to advance research technology and product development in.

So I want to start with a two part question about Xymergen.

So, you know, if you thought the ribosome thing was nerdy, it's going to get a little bit nerdier.

Cannabis.

Please welcome Mike Mike.

Yes.

First, are there any specific new capabilities that the acquisition brought, into Ginkgo?

And then we'll take it back to reality after that.

And second, you know, with the 13 new programs this quarter, Ginkgo is clearly on track to meet a target of 60 this year.

Alright, well, so I feel like everyone's starting off explaining what they do as a company. So I think that's probably where I should start I heard some references about it seems like it was lord of the rings.

So given that Xymergen had its own pipeline of potential projects, could you please talk about whether or how Ginkgo could leverage its own relationships to go out and find partners for those programs that in turn would potentially accelerate Ginkgo's own existing pipeline, so as to achieve the very large goal of 500 new projects in 2025?

So I'm Patrick Boyle.

Very excited to be here.

We've had a lot of developers speaking about how they use our platform.

Yeah, I can speak to those.

Today I want to talk a little bit more about the platform itself and how that can enable the next generation of developers.

So on the new capabilities front, so I spoke to this a little bit, and if you want to really do more of a deep dive, I do encourage folks to look at our, go to our IR page, look at our video specifically on the Xymergen acquisition when we announced it.

Star Wars, only a few people cheered so theres, probably some people here didn't really loved those movies and we would do is help you figure out a way to enjoy it so.

[noise] candidates is a pretty complex plant, it's something everyone jokes about it sounds very simple, but in actuality, there's a lot of different things. It can do and many of you probably heard of CBD over the past three years, but say five years ago, you only knew with THC was there's a lot of different cannabinoid that.

Can actually be found within the plant and that's why you get so many different effects, depending on what type of genetic youre ultimately consuming.

And so we want to do with Kronos is find a way to actually deliver differentiated and consistent effects and that really comes down to unlocking some of the rare cannabinoid th.

THC CBD and then there are six others and we want to know how can we find a way to accomplish that.

So, you know, we often talk at Ginkgo about our mission is to make biology easier to engineer.

So Fortunately we ended up running in the Gingko, a few years ago, and we had been looking for some way to design something that would specifically make.

One actual cannabinoid without having to get 50 and find a way to fractionate and it was really complicated and expensive.

One of the things I want to talk about is how do we actually make that platform easy, to engineer?

And so how do we go about doing that well I feel like here.

How do we make it more accessible?

Everyone Youll see a very simple diagram that explains what is it that a that the geniuses here in Boston and figured out how to do and that is start off by looking through all the different genetics that we had and figuring out what's the most efficient way what's the most efficient.

If you heard Jason Kelly talk, he's very good at talking about this in terms of there are two key parts of our platform, our foundry and our code base.

And the code base is really made up of reusable biological parts.

Great.

Pathways, where the cannabis enzymes that really matter that we could isolate and optimize how to actually produce the specific cannabinoid.

What does that actually mean?

How do you actually reuse biological parts?

And then finding out how we could take that DNA and put it into an engineered T cell and then of course that was a great thing to figure out now we have a process, but how do we actually make it because what's important to us at the company is delivering these products to consumers and so.

That's really what I'm here to talk about today.

The reason why this is important is if you think about where we're at with regards to engineering biology, we're still in the punch card era of cell programming.

We worked closely with ginkgo, we're very fortunate to identify an opportunity in Canada, where the majority of our operations are today to go and purchase facility that was belonged to a generic pharmaceutical company.

Genco helped us work training and there you can now see what the you know the fermentation facilities it looks familiar to everyone here.

And finally, a way to take that organism, which we've since shipped from gingko to Winnipeg, Manitoba, Kronos fermentation facility and actually began production of the rare cannabinoids.

So what does that all mean, when you think alright rare cannabinoid what happens so.

I think Jason you Might've mentioned earlier, Hey, there as you know there are some unintuitive gummies actually.

Looking at the colors I gotta check supply chain wise, though I hear a lot of laughter in the crowd.

Probably now know what it is or will confirm but ultimately we wanted to deliver something different because for those of you who go to the boring dispensary here in Massachusetts that don't have Kronos products, you, probably just wondering like.

When will I get fermented products when can I get something that's unique that's consistent and that's really what we wanted to do was finishes.

So my PhD advisor Pam Silver is here, so she remembers this, but when I did my PhD, and I know there are a bunch of other PhDs here, I spent six years basically putting small amounts of liquid together to smash pieces of DNA together, to hope that they would produce the thing that I wanted to make.

Talk to you about how we add products and how it makes you feel that's what's so exciting so we started off with I'm.

Show you here.

With the THC and CBD gummies. So this is the first ever a combination of a ph D. In fermented CPG product. That's been launched you can see the options of what we've done here, but we've taken two different flavors to different cannabinoid and for those of you who tried it you can see how we sort of combine these two experiences but ultimately it's about.

Modulating and balancing what that means and this is really just to start for us. So while we're excited for CPG, we start to look to the future as we bring out other products not just in gummies, but another formats, so anything from <unk>.

Vaporizer is from pre rolled products too.

Two different forms of edible food.

We really have a lot of optionality and a lot of opportunity and that's what I think is so exciting about the platform and the things. We've done is you may go in and Wonder what that's going to do when you go when you have a beer or a glass of wine you know what the effect is and you have an idea, but unfortunately the candidates that can be different each time.

One thing we're excited about there'll be cant give any any timing yet, but we will say like we're looking at in the near future as being able to introduce something with th television.

It would be very very difficult for us to get that actually cultivating and extracting.

You know some of the people here might want one of the some of the investors and ginkgo, but realistically unless anyone's willing to pay $10000 for a single gummy. It it's probably not going to be something that you see a lot, but because of the platform because what we've been able to unlock with fermentation.

We'll be able to deliver that to a consumer for a similar price point. If it was just extract THC and I think that really means a lot.

And if you look across the industry outside Ginkgo, this is really how it's still done today.

I think it's really important that we use organization of code-based assets to help more developers, move to the market faster by cleaning up the process of finding the right biological parts and putting them in the right place.

In order for this industry to grow up and move forward and we kind of are moving at a similar speed to synthetic biology right now.

It's important to have consistency.

As important from a regulatory perspective and from a responsibility that we can deliver the same thing each time. So you don't accidentally eat a gummy and by the way that they're not in fees that was joking.

And you have too much you don't know what it is that's one of the things that keeps people away. So I think that's important but also we have medical patients that need to know exactly what they're getting their doctors one of the reasons that theyre nervous about prescribing is you don't know what the exact amount is so if you're thinking your backup overall, what's this platform allow us to do it basically gives us a.

Precision.

To be able to make consistent branded products and to be able to deliver those at a cost efficient level. So that consumers can afford it so that medical patients can afford it and you unlock all of the benefits of cannabis.

And that allows us to develop cannabis as an industry similar to how you've seen different consumer product industries pharma everything you know we can get the same thing each time and for US I feel like we're able to leapfrog five or 10 years in the future having met ginkgo being able to do the work and I think one of the things. Most exciting is these products are actually already I would say.

But, you know, one of the things that we have to do here at Ginkgo is continue to drive the scale of our foundries and thus reduce the cost of doing the lab work of cell engineering.

On shelf, but they've apparently all sold out so it will be back on shelf soon Oh, we're able to produce whatever we need so that that's great and I hope some of you will be able to try them in Canada and for those of you who are politically inclined. Please help us push your are your local politicians to make sure that youll be able to try these great.

Product in the U S M.

Thank you.

[noise] Alright, So next we welcome Michelle Xu Ming.

You know, the Xymergen team has invested in really flexible automation. In other words, you know, sort of robotics that can serve many different types of lab processes and a really great software system on top of it.

So the question I want to ask the developers here, if people are thinking about starting new companies, is how many bench scientists does it take to build your first commercial strain?

Michelle is the CEO of Hugh a biotechnology startup dedicated to producing the world's most sustainable dies. Please join me in welcoming Michelle.

Okay.

Okay.

Yeah.

Yes.

Yes.

Yes.

Yes.

All right.

I think it's one of the things that can help us keep up with, you know, Knight's Law here at, Ginkgo to continue to scale our facility and reduce our costs, right?

It's usually a lot.

Okay, well Hello, everyone. So again my name is Michelle I am the CEO and co founder of Hugh.

I think working with Ginkgo, the correct answer is that it should be zero.

We started the company about two and a half years ago now our out of India Bio based on technology that my co founder and Chief Scientific Officer, Tammy was actually developing other do overlap at Berkeley.

I also think it's really exciting to have the team that designed that and built that, you know, coming on board to help further push that along.

You know, that, giving them, you know, them thinking about the next generation of that and having the resources of Ginkgo behind them to do it, I'm also hopeful helps us get to yet the next stage of what we need.

So those are the two things.

And essentially.

I do think that that is sort of, that automation is something that we would have had to, you know, ultimately develop at Ginkgo, but there's sort of a speed up here by bringing in the team and tech at Xymergen.

And it really has to be zero.

<unk> is a colored company, we are creating the next generation of dyes and pigments for the many industries that are shaping the health and future of the planet.

When it comes to their internal programs, you already mentioned there's interest in that, externally.

If you think about how much it costs to operate a lab, if you're a founder here and you're thinking about building a technical organization, let's say that you want four scientists to start working for your company. Four scientists, well, they're going to need a lab. You probably have to pay them.

Scientists like salaries.

And so that means right.

Colors that we put on a close on our faces in our hair, but we're also thinking about the color and our food or the paint on our walls I mean, if you think about it.

Color is literally infused into the products that we all use and consume every day.

And the history of that colors that thousands of years ago, These dyes and pigments where once.

Extracted from nature, you had to cross shop leaves the or in some cases even animals.

And to be able to kind of produce the specific colors of interests and that process was really laborious. It was really expensive and resource intensive and then the other thing is it didn't create very high performing or consistent colors that was a huge barrier to industrial viability.

So four scientists, that's going to cost you about a million dollars a year.

Which is why you had some colors like royal Purple that got its name because it was literally worth more than gold and how expensive the production processes.

And largely today those remain kind of the same barriers for the industrial viability of some of these plant based colors and so you can imagine how exciting.

Science really was when.

The German figured out how to create color from petrochemicals.

About 150 years ago, it really made colors suddenly.

Not just really cheap, but also highly functional to serve massive industries, but then of course that came at a trade off of an enormous amount of environmental and even in many cases carcinogenic harm.

So these guys that we're using in our products all around us.

Not only are fundamentally fossil fuel base and made in an extremely carbon intensive process, but the production process also involves a number of toxic chemicals and heavy metals that actually ended up at Tres material trade substances. Both on the products that were used.

And in many cases.

In soil and water ways and when you have 20% of global industrial water pollution coming from just textile dyeing alone is one example, it's really devastating many communities all around the world.

A million dollars a year is a lot, especially when you're a small company.

So that's the problem that Hugh is on a mission to change and we believe that synthetic biology really holds the key and the answer to do that we see a landscape and opportunity right now where there's this growing ecosystem of tools like CRISPR in platforms like kimco.

Well, the only thing I'll say is, you know, Ginkgo has a history of doing a lot of spin-outs and basically taking product-focused assets and getting them partnered up or in the hands of other people or into their own companies.

Really opening up a brand new possibilities to work with biology and go back to nature.

And so we are in right now we're in this time when consumers also are waking up to planetary health and the needs that are going on in climate change more than ever before and that's really created this opening for biology to kind of demonstrate its.

So hopefully we can be helpful there.

Possibilities and opportunities in reinventing it up rooting fundamental categories like food and oils and so for you. We are then harnessing that resolution in synthetic biology to culture, Nature's Rainbow and clean up the space of color.

We would, of course, love to then serve that spun-out entity as a customer on our platform where it makes sense.

You want to make sure that they are focused on the most important thing for your company, which is developing your product.

The way, we do that is probably a pretty familiar process to those of you in the room here, we really start by going back to nature as having the blueprint for color. So we look at the specific colors like deep red or Flamingo, Pink and we study the enzymes within those clients.

So yeah, so I do think that's something where hopefully we can lend a helping All right, Michael from BFA, I'm gonna unmute your line, although you just disappeared, there, you are.

I really like putting pieces of DNA together, but that's not product development.

And then we'll do one more question at the end before wrapping up.

Animals that are responsible for creating those colors, we identify and sequence then and then express them within our proprietary microbes. So that we can grow them in large fermentation tanks and then on the backend the experts at prototyping and purifying the materials. According to the specs.

If our customers to create a dropping solution to the supply chain.

Yeah.

Great.

That's building the factory to make your product.

But on top of that.

I think we really saw an opportunity when we first started as a it and we're looking and asking ourselves the question Tammy and I at the beginning of their gaze, how do we take advantage of the incredible technology that can he was working on but also this growing ecosystem to do things in a way.

It turns out there's a way of approaching this.

That's better and faster than ever before and that's really why we came a tick kimco in the beginning and how we really embarked on this partnership that we just announced in the last couple of years of really proud it used to be just one of the earliest companies should be taking advantage of this platform.

Can you can you hear me?

I really like abusing metaphors from the software industry.

Yeah.

Yeah.

An opportunity.

Okay.

We are kind of defining ourselves as what we're calling a thin bio to point out company. One that is able to create these super product focus and execution faster than ever before at lower capital costs than ever before to really define kind of the future of this.

Great.

Bio landscape.

And so that's that's exactly.

What we think is the opportunity here and we think that it's enabled by being able to separate on areas of expertise. So if Q is a color company focus on knowing exactly what colors are industrially relevant for our customers and knowing exactly how to apply it.

We can therefore be kind of the experts at identifying some of these initial pathways identifying the molecule and then on the back end being experts at the product validation and the application process and the delivery to our customers.

But we can save a lot of that little stuff with a bioengineering and the strain development in the tighter improvement that has really slowed the companies of the past down we can.

Farm all of that out to the ecosystem, that's developing and growing out there to really do it in a way that's faster than ever before so that's really kind of the vision that that we see and the opportunity here.

Mark, I want to go back to a comment you, made earlier discussing the foundry outlook for the rest of the year and how much is for milestones versus core foundry.

Yeah.

I want to make sure I heard you correctly.

And the result is that we're able to create a bio based platform solution for color, where we're able to create colors that are lower.

Lower in carbon and toxicity footprint compared to chemical they size, but also much higher in performance a more cost effective and more scalable than the traditional plant based solution.

So, again, remember I'm Samwise Gamgee, not Frodo, so I'm going to use a lot of nerdy metaphors.

So our starting point and what we're working with Ginkgo on now is the indigo for for your genes.

In the software world, how do you help developers use your platform in an easier way?

And it's a really exciting because indigo is actually the essential ingredient for making your teams, even though you don't need a lot of it it's the most visible ingredient and it's because of the way it fine to cotton that kind of creates the iconic natural stated look that we all know and love them in in our teams.

And so what we're able to make is basically a bio identical molecule and that's extremely important for the supply chain.

Because it means that we're able to plug in right at the point of dying, but the rest of the process from growing the cotton.

Dying the yarn and then weaving it into fabric and creating the garbage that all can remain exactly the same therefore, reducing the kind of pain and adoption and implementation that is often face by the supply chain.

And so with that and I promise I'm done.

We are.

Very proud today to be working with some of the best known names.

Names all around the denim industry and I can tell you that our genes cleaner genes powered by Hugh is coming soon but also I'm, even more excited about the future of color powered by this synthetic biology Revolution that is also very much on its way. Thank you.

Alright.

[noise] Alright. So today's next developer is Nicole Richards Nicole is the CEO of ammonia.

Well, you bundle together all the assets you need to put together, so you can get started working on your product faster.

Companies seeking solutions to the world's largest waste challenges they use micro organisms to remediate an up cycle waste streams into valuable resources. Please welcome Nicole.

So if you want to develop an application for the iOS app store, use the iOS what's called SDK or Software Development Kit.

Okay.

Okay.

Yes.

Good afternoon.

And everyone. It's great to be here with you on the call Richard CEO of ammonia and I wanted to start with something.

You said something along the lines of executing core foundry in line with 2Q.

Same thing if you want to develop for Microsoft Windows, use their SDK. An SDK is basically the collection of tools and libraries, documentation, licenses that you need to put together in one bundle to make an application for a platform.

One, I want to make sure I heard that right.

It's basically the instruction manual and tool set you need to make a new application quickly.

One thing I wanted to share with you since you're all of my closest friends and family here and it's a new brand that we're going to launch later this month, but it really represents what we think of as our vision and who we are so I'm going to start off with this let me know what you think.

And then if I did, and you know, we kind of look at 1Q core foundry about 22 million, 2Q about 26 million, that implies something like, you know, 100 to 110 million core foundry for the year.

So today at Ginkgo, I'm talking about our approach to SDKs.

[music].

Hi.

Yeah.

You still have to listen to me for a few more minutes sorry.

It's been 250 years since the start of the industrial Revolution and it hasn't had from found impact on our lives and the quality of our life and the technology that we have today, which has been amazing.

So that's a pretty sizable milestone in the second half, about 40 to 50 million.

Conversely, the impact on our planet has been devastating without long list of environmental consequences from polluted land and water and climate change.

The good news is that nature, well heal itself.

Bad news it will take thousands of years to undo just what's been done in the last hundred years, and we simply cannot wait that long we need to act with urgency.

And so fashion I didn't plan this but according to the U N and the sustainability goals that has set the challenge for what we need to accomplish at the planet for planetary health by 2030 alone yet is working with industry and government on the five that I've got highlighted here.

This is a challenge that we exist to solve.

So one, you know, if you can confirm the bridge there, and then is that a single milestone event?

Because we work in cell programming, we're calling them CDKs or Cell Development Kits.

But let me tell you a little bit about who we are and to understand that and to see how we think is to know that we see waste is a failure of the imagination.

Is that multiple events?

Just given it's in the guide, pretty critical that we kind of get a better sense of how that's going through.

In nature nothing is wasted because nature is the original innovator recycling everything in a circular ecosystem.

Thanks.

The essential idea here is that with CDKs, we can build the organism that you need, so that you, the developer, can focus on building your product.

Our ethos at alone Yeah, it's a work in harmony with nature and the fast forward the future solutions to the present day.

Yeah, yeah.

So our mission is to leverage the power of biotechnology and advanced engineered systems.

So it's not a single milestone event, it would be more than one.

To help develop a waste and pollution frameworks.

We, you know, as you know, we've been very careful, about not guiding to specific downstream value share versus foundry service revenue.

I mean, generally speaking, I would say directionally, your sort of math is correct.

I'm missing against these three.

Mission against this is in these three areas so its in remediation.

Fundamentally, we're not doing anything too different in Q3 and Q4 in terms of foundry service program execution than we did in the first part of the year. We are adding more programs.

Is using and finding organisms, our enzymes that will break contaminants and render them in there.

So keep that in mind.

So we will be adding programs.

Cycling, which is taking a low value waste and up cycling it to a high value products and sensing which is looking for a biological sensors that will find where those contaminants are and help inform the solutions of remediation and up cycling.

So we're not reinventing nature.

We're collaborating with nature. So we can hit fast forward.

And this talent is expanding if we think about how our world is changing and some of those factors on the right just as the chemical and mechanical solutions that exist today are reaching that limits. So some of these trends are GDP growth or urbanization.

We're at 70% of our population will be living in cities by 2050, creating super wasting a little points.

When land is at a premium and limited so.

So we've got a long list of these new and contemporary challenges that are happening that are demanding different and better solutions and this is a paradigm shift that alone is working on.

And now is the moment.

To make this shift thanks to a confluence of factors. So when we look at what's been done in the bio remediation field and really it's been over the last thousands of years and 600 B C.

Micro organisms has been used in waves.

Think about in the sixties. The first micro organisms were identified to cleanup oil from some of the oil spills.

And some of you might be surprised to know that the first engineered biology was deployed in the environment in the Seventy's and Eighty's.

But the progress has been there, but it's been slow.

When we think about the progress that we've all heard about today.

And we know from.

Biology, and the development, there with synthetic biology, and reading writing editing DNA, the computational powers that exist today and haven't before what ginkgo is doing and the foundry.

We had a nice contribution in Q2 from programs that were added in Q1 in terms of foundry services.

He has made tremendous strides in Jason showed a chart earlier today about the costs and if you think about the environmental field, it's kind of at the end of the process. It's the place where nobody wants to spend money. So to take this transformational biology, it has to be a cost effective and.

Now is the time that we can do that to take the biology. That's been developed for these other industries and bring them into the environmental solutions.

So we're looking at the solutions across these four areas. So in mining it's up cycling metal.

And it's also cleaning up the waste from things like asset mine drainage ponds.

In energy, we're improving the environmental footprints left behind.

Industry is really all about breaking down contaminants from things like you might have heard of P. Foster perfluorinated compounds that are in your water or other emerging contaminants and plastics were working on upcycling plastics. So we heard earlier the sustainability manufacturing part of that but what we're looking at is.

Those that haven't been manufactured sustainability that needed to be broken down and we're working on polyurethane foams and nylon.

Yes.

So when we look at what we're working on and what Ginkgo is enabling us to deal with it synthetic biology development across those four areas and several projects we've been working on over the last year, we really believe that through this waste is a failure of the imagination.

So we believe that we can help create a world where the legacy waste has been remediated, where post consumer and post manufacturing waste are up cycles into new products and our climate is healthy.

All of this is collaborating nature with engineering systems to create those solutions.

And I'm incredibly fortunate and lucky to work with the team at ammonia I'm going to ask him to stand up.

[laughter] and embarrass them, but really I'm asking you.

If you have any questions about what we're doing we would love to talk for hours with you about it. So please afterwards, let us know.

Thank you.

And so you can sort of extrapolate that thinking a bit to the kind of general math that you were doing.

[noise] Alright next we welcome John Mcintyre CEO of motifs food works. He's here to reinvent the way science is applied to make plant based foods better tasting.

More nutritious and more sustainable please welcome John Mcintyre.

[noise] I love food.

But yeah, it is there is a significant contribution that we are anticipating from downstream value from from sort of multiple potential sources of downstream value sharing in the second half of the year.

[laughter].

The only thing I love more than food.

As science.

Every day is the CEO of motive food works.

Just to indulge my two favorite patches.

Okay, and then that foundry service.

And our first CDKs are focused on protein production.

So I want to first start by thanking Jason Kelley.

Jason CAC Rushmore and the whole ginkgo team.

As well as my.

My early investors, Viking and Brian Peter and G. A Max Julien.

For giving me the opportunity to lead and build what I think is going to be a transformative company.

In the food industry. So thank you.

Now that I've said, some nice things.

Could you prove that Capex I sent out earlier this week.

Just.

Thanks.

I mean, I think we we calculate, we call it, you know, revenue per active programs, but I think, we're kind of getting at that same point.

I don't have a lot of time today to go through the details on each of these CDKs, but there are a number of events coming up where developers can meet with us and learn more.

My company motive food works is totally focused on.

Is that, you know, you're in the, that run rate you had in 4Q, 1Q and 2Q now has been pretty consistent.

But just to give you a preview, the first CDK I'm talking about is the Pekia CDK. This is a yeast that is naturally very good at making protein.

What we've done in the CDK is we've combined best-in-class parts and designs, to help you enable the use of a yeast like Pekia to make your product faster.

Is that sort of settling in at a level we should expect going forward?

One example for this, for the, you know, former iGEMers and synthetic biologists in the room is promoters.

One mission our goal is to make plant based foods tastes better and more nutritious we want to make them. So good that people crave them.

Just, you know, not looking for 2023 guidance, but we're always looking sort of look for KPIs.

We've got your KPI on new programs, active programs, but that revenue per program, is that zoning in on a region that you're comfortable with?

So there are industry standard promoters that people use in these kinds of yeast systems.

Using Ginkgo's foundry and machine learning and a lot of tools, we've been able to develop better promoting systems for these yeast. So we have promoters developed in our fermentation systems that enable more than 20-fold increased expression of your protein in the system versus the industry standard.

I was actually going to spend some time walking through a case study on how we actually made this happen.

Not just say, it's a pretty good alternative I mean, really say I cannot wait to eat this product, but I know it was good for me it's good for the environment.

This is work that we did in partnership with Motif to produce their product.

Yeah, it's, I think so.

So why is that important well consumers. So I mean, when we're in the food industry, we talk about consumers and I see a lot of consumer benefited.

I think if you take the court, like just the quarterly, the sort of sort of top level math that you're doing, and annualize, that, that is a reasonable average in terms of like how we think about it, for the annual amount you might expect from a program.

And then as you know, our programs might be two to three years in duration.

Company is being built here today.

The consumer is very interested and empowered and evolving how they interact with their food.

They are concerned where its made what its impact is it good for me.

What was the role of animal agriculture wasn't a problem is it something I'm concerned about.

But there's a fourth.

Factor.

That's this.

You're saying Oh, it's an environment buyer of mentally.

Thoughtful package here it is that but it's something else I'm, putting it on me. It's a batch look at me I make decisions about sustainability in the consumer world recall that badge value.

That means people are saying, it's cool I want you to see me do this so this whole plant based food movement is cool and that is a big driver and opportunity.

If it's so cool.

It looks like the great money, our money ball line.

If he is a good hit or why doesn't he hit good.

So why are people buying more there's a lot of interest there is a lot of trial.

But we have not penetrated mainstream consumers to a great degree.

And if you ask the consumer the first thing. They will tell you is I don't want to compromise on taste that much early motivated consumers are buying.

And they may repeat but the mainstream consumer bias.

Does it repeat doesn't buy it every week.

Then eventually they'll try it again six months later, hoping its better.

Our company believes you have to solve that problem.

If you look at the one product that is jumping over into mainstream it's oat milk and why it actually tastes good and it functions.

Now longer term I'm, not so sure that oat milk isn't going to have some other issues because.

It's really full of sugar.

So it's not so nutritious, but it does taste good.

So our goal is to solve both issues.

So what are we solving for.

Let's start with what I would call the usual suspects, which is how do we make alternative meat products Pittsburgh, how do we make alternative dairy products taste good.

Then even going further how do we improve the nutrition of products that are plant based and what not.

So your plant base, that's one option, but you could even extend it to all meet three so for example, there's a lot of companies working on micro proteins.

They still have taste problems, our capabilities and technology will absolutely deliver against those as well.

So now I'm going to throw myself under the bus here.

If you look at why the products don't tastes. Good first start with the fact that the proteins the raw materials to build big bulk of what happens in making a plant based food or with starting materials that are technically and physically very different than replacing animal they don't work well.

Here's where I throw myself under the bus.

I say for 'twenty 40 years, we've been trying to fix that by what I called Maskin modify let's throw a bunch of flavors at it let's try to figure out a way to cover up the taste.

And I was the head of R&D for the largest plant based protein company did that exact same thing.

And by the way worried about this much and it no longer has any more runway.

Every other science and life Sciences, his embrace cutting edge technology food and nutrition is late to the game.

We as a company are interested in understanding fundamental issues with how foods performed.

In doing so.

We have the ability to create new discoveries.

The reason motiva can do that and others can't.

Because when I discover something I don't have to invest tens hundreds of millions of dollars to generate technology to make those I have partners. So I'm allowed to really be at the cutting edge of science.

And then use my partnership with Pimco to find and develop those new products.

We use a holistic approach to innovation.

We analyze food with new tools from other industries, we discover new ingredients with new tools watch synthetic biology.

And we design simultaneously.

We are a food Tech company not a biotech company, we're solving food issues biotech is a great partner for us.

From that we generate.

Ingredients ingredient systems and full products.

How do you think it will help us.

They provide us strains that produce our targets at very very high level, but maybe do something nobody else could do.

Pat.

Complete opportunity of biology.

Egg whites are important and all kinds of food applications.

There are companies that are trying to express over albumin. The main egg white protein from Manhattan.

Who says.

That is the best protein for gelling foaming binding that you use egg whites from real time work between our two companies.

Hundreds of different species dozens of proteins.

In a matrix to get the best version.

The market.

Nobody can compete with that.

So we're in the market today.

With two products growing commercial one is a protein that produces taste and color in my coffee mommy.

Other is after tax.

Fiber that significantly improves the texture of me you will get to taste. It its a cocktail hour and meat balls that are going to be available to you.

But in the interest of time, I'll just say, go taste the meatballs.

We have a portfolio of ingredients coming to market over the next three years, which we're aggressively pursuing in partnership with didn't go as well as our other avenues.

We hope you enjoyed those meatballs.

And so it sort of gives you a general sense of the size of the program.

And in the break, I'll talk to you about more about how we made that.

[noise] [noise] alright, yes developers developers.

This is the part of the program, where it's my job to try to tie together all of these developer success stories that we've just seen.

And I think I can do it.

This very elaborate metaphor.

Do you guys like ribosomes.

Ribosomes.

Ribosome fans in the audience, Yeah right, Yeah, we like ribosomes. So you look at it you got in nature right and he said Oh, there's an oak Street, there's a human.

There's a use there's a sea squirt and it would be easy to say well, they're all doing different things, they're doing everything that they have nothing in common.

But my biologists know that under the Hood all of them are running on ribosomes.

Right right can we give it up for ribosomes tenure here at the <unk> conference if nowhere else.

It's not just ribosomes, it's not just ride with them.

Membranes in DNA and central metabolism. There are a lot of these functions that biology does very well and the same and everything that lives.

So now to walk this metaphor over to business to business <unk> business is to find the ribosomes of the biotech industry.

We can't build them every company.

Just like we can't build every flower.

You need the genius, the care and attention of a designer.

To get all the details rates, but.

But what we can do is we can find the core foundry services that support an entire ecosystem.

And then do those very well for as many partners as possible.

The next speaker is here to bring forward.

One of these new foundry services. Please.

But yeah, I would say, there's nothing that I'm seeing, Michael, that's sort of surprising in that number.

Please join me in welcoming the head of codebase, a single buyer works and a man who loves ribosomes.

Even more than I do.

Patrick Doyle.

[noise] I thought a J code is going to introduce me with a different matter for which as you've heard from Frodo.

Now you have to hear from Sam Wise. So you know if you thought the ribosome thing was nerdy, it's going to get a little bit earlier, and then we'll take it back to to reality after that so I'm Patrick Boyle are very excited to be here. We've had a lot of developers speaking about how they use our platform today I wanted to talk a little bit more about the platform itself.

It could trend differently in the future.

So that's the PQS-CDK. So a engineered yeast for producing protein with best in class parts put together on top of the Ginkgo platform to enable people to make protein faster.

I have another CDK to talk about, which is in beta.

That can enable the next generation of developers. So we often pocket ginkgo about our mission is to make biology easier to engineer.

But right now, it's sort of where I think we'd expect it to be.

It's the fungal CDK.

Okay.

One of the things I want to talk about is how do we actually make that platform easy to engineer, how do we make it more accessible.

You heard Jason Kelley talked to is very good at talking about this in terms of there are two key parts of our platform, our foundry and our code base and the codebase is really made up of reusable biological parts.

Great what does that what does that actually mean, how do you actually reuse a biological part so that's really what I'm here to talk about today.

So a lot of people also use fungi to produce proteins.

The reason why this is important is if you think about where we're at with regards to engineering biology, we're still in the punch card era of cell programming. So my Phd advisor Pep Silver is here. So I should remember this but when I did my my ph D and I know there are a bunch of other phds here I spent six years basically putting small amounts of illiquid together to smash pieces of DNA.

And this is a new CDK that we're developing here at Ginkgo. This actually came via a partnership and now acquisition of a really great team in the Netherlands called Dutch DNA. So these folks are all experts in developing fungal systems for industrial production.

They're developers themselves. So we brought them on board the Ginkgo platform to help us develop better code-based assets like the fungal CDK for producing proteins at even higher levels.

Other to hope that they would produce the thing that I wanted to make and if you look across the industry outside outside ginkgo. This is really how it still done today.

I think it's really important that we use organization of codebase asked us to help more developers moved to market faster by cleaning up the process of finding the right biological parts and putting them in the right place.

The only thing I might remind you of, Michael, is as we discussed a bit in the last quarter as, well, depending on the stage of a program and therefore like the mix of earlier stage programs versus later stage programs and the structure of those programs, you know, the revenue per program active in a particular quarter could vary and that's not really what we're managing towards.

So the question I want to ask the developers here if people are thinking about starting new companies is how many bench scientist does it take to build your first commercial strain.

We're managing for program execution, so I did just want to make sure that that's clear.

No, of course, recognize that.

It's usually a lot.

I think working with ginkgo the correct answer is that it should be zero.

And it really has to be zero, if you think about how much it costs to operate a lab if you're a founder here and you think about building a technical organization let's.

Let's say that you want for scientists to start working for your company for.

<unk> scientists, while theyre going to need a lab, you probably have to pay them scientists.

Scientists like salaries, so for scientists that that's going to cost you about $1 million a year.

A million dollars a year is a lot of especially when you're a small company you want to make sure that they are focused on the most important thing for your company, which is developing a product.

I really liked putting pieces of DNA together, but that's not product development. That's building the factory to make your product.

It turns out there's a there's a way of approaching this ah I really like abusing better for us from the software industry. So again remember I'm Sam was Graham G. Not Frodo somebody who's a lot of nerdy matter for US is in the software World. How do you help developers use your platform in an easier way.

More Samwise Gamgee content.

You bundle together all of the assets you need to put together. So you can get started working on your product faster. So if he wants to develop an application for the iOS App store use the iOS, what's called SDK or software development kit same thing if you want to develop for Microsoft Windows user SDK.

SDK is basically the collection of tools and libraries documentation licenses that you need to put together in one bundle to make an application for a platform. It's basically the instruction manual and tools that you need to make a new application quickly.

And yeah, it's just that over the last couple quarters, that number, has started to normalize a little bit, so we're always trying to get a sense of is this the more appropriate point.

So for folks who don't know what a fermenter looks like, normally when you produce proteins with filamentous fungi, it's very challenging because filamentous fungi, they're known for producing protein.

So today it ginkgo I'm talking about our approach to SD case because.

But yeah, totally get that, Anna-Marie.

That's great.

Because we work in cell programming, we're calling them C D k's or sell development kits.

Thanks.

The central idea here is that with CDK is we can build the organism that you need so that you'd the developer can focus on building your product.

Thanks, Michael.

All right, we're going to sneak one more in because I always like to get everybody, in if we can.

And our first CDK is our focus on protein production.

So, Vivian from VTIG, you'll close us out.

I don't have a lot of time today to go through the details on each of these C. D case, but there are a number of events coming up where developers can meet with us and learn more.

Perfect.

Hey, guys, can you hear me okay?

But just to give you a preview of the first CDK I'm talking about is a peak.

Yeah.

They're also known for, as the name suggests, filamenting.

P. J C. D. K. This is a use that is naturally very good at making making protein.

Okay, hi.

That's not so great if you're trying to grow things in tanks.

Done in the CDK is we've combined best in class parts and designs to help you enable the use of our youth like did you have to make your product faster.

Thanks for taking the question.

One example for this for the.

Former Ige Emerson's synthetic biologists in the room is promoters.

So there are industry standard promoters that people are using these kinds of your systems using ginkgo is foundry and machine learning and a lot of tools, we've been able to develop better promoting systems for these for these deals. So we are promoters are developed in our fermentation systems that enable more than twentyfold increase expression of your protein in the system versus the industry standard.

So, just one really quick one.

I was actually going to spend some time walking through a case study on how we actually made this happen. This is work that we did in partnership with most he used to produce their product, but in the interest of time I'll, just say go tasting meat balls and in the break I'll talk to you about more about how we made that so.

That's the peaking at CDK. So a engineered you used for producing protein.

With best in class parts put together on top of the ginkgo platform to enable people to make protein faster.

I have another CDK to talk about.

Which is our it's in beta as the fungal CDK. So a lot of people also use a fungi to produce proteins and this is a new CDK that we're developing here at kimco.

This is actually came via a partnership and now acquisition of a really great team in the Netherlands called Dutch DNA. So these are these folks are all experts in developing fungal systems for industrial production.

Their developers themselves when we brought them onboard the ginkgo platform to help us develop better codebase assets like the phone call CDK for producing proteins at even higher levels.

More sand wise games content.

So for folks who don't know what aforementioned looks like normally when you produce proteins with filamentous fungi, it's very challenging because filamentous fungi, they're known for producing protein. That's great. They're also known for as the name suggests still a mentoring that's not so great. If you're trying to grow things attack. So what the definitely networks did is that they engineered.

So what the Dutch DNA folks did is that they engineered their fungal systems to produce high amounts of protein without producing large amounts of filamentation. That means you actually get yeast-like fermentation performance with a fungal system.

They're fungible systems to produce high amounts of protein without producing large amounts of the limitation that means you actually get used like fermentation performance with a fungal system. So what you're seeing here on the top is a engineered pongolle system that basically grows like you spend a bioreactor, which means higher oxygen transfer rates higher biomass.

So what you're seeing here on the top is a engineered fungal system that basically grows like yeast in a bioreactor, which means higher oxygen transfer rates, higher biomass rates, higher protein production.

It's higher protein production.

So those are the two CDKs.

So those are those are the two CDK is as I said, we'll have some sessions coming up for developers to learn more about using them just a few different highlights for for the features that are enabled here again. The you know the fungal system isn't beta because we're working to integrate into our foundries and the PTO system is available to work with today.

As I said, we'll have some sessions coming up for developers to learn more about using them.

Just a few different highlights for the features that are enabled here.

Again, the fungal system is in beta because we're working to integrate it into our foundries, and the PQ system is available to work with today.

Okay, so how are we actually going to use these systems and Ginkgo's platform to develop a better product with Ginkgo?

Okay. So.

How are you actually going to use these systems and getting those platform to develop a better product with ginkgo. So again, you know think about those four scientists with you. If there are doing the work of putting a strain together to make your product the journey from the beginning of starting R&D to developing a full scale product can be complicated.

So again, think of what those four scientists would do if they're doing the work of putting a strain together to make your product.

The journey from the beginning of starting R&D to developing a full-scale product can be complicated. There are many different paths to success.

And in fact, many of the products that came out of, say, generation 1.0 of synthetic biology basically navigated this path through many, many person hours of work.

There are many different paths to success and in fact, many of the products that came out and played generation one point O of synthetic biology, basically navigated this path through many many person hours of work.

What we're doing at Ginkgo with CDKs is that we've developed better work plans for using our foundry to develop these commercial strains faster, based on all the lessons we've learned across dozens of projects over the last few years.

What we're doing at ginkgo with CDK is is that we've developed a better work plans for using our foundry to develop these commercial friends faster based on all the lessons we've learned across dozens of products over the last few years, so rather than saying, let's see what let's try a few things a few bench scientists were using our foundries and automation to iterate through Hunter.

So rather than saying, you know, let's try a few things with a few bench scientists, we're using our foundries and automation to iterate through hundreds and thousands of different designs in the time that your four scientists, doing the best they can, would be working on tens of designs.

And thousands of different designs in the time that your four scientists doing the best they can would be working on tens of designs.

And ultimately, we want this to be a way for new developers to get on board with the platform, use our initial Phase I CDK to develop a useful commercial strain, and then stay with Ginkgo as we help them develop ever increasingly improved versions of that strain as they go to market.

And ultimately we want this to be a way for new developers to get onboard the platform use our initial phase one CDK to develop a useful useful commercial strain and then stay with ginkgo as we help them develop ever ever increasingly improved versions of that strain as they go to market.

You mentioned, international expansion and the biosecurity front.

Again, you know, we're focusing on protein production today because we've had a lot of, success recently with partners to develop really great protein products.

Again, we're focusing on protein production today, because we've had a lot of success recently with partners to develop a really great protein products you've heard about both of them are today. One is the default that you'll be trying a later from Ot food works.

Could you just elaborate on how those conversations are progressing in the pipeline there?

You also mentioned expansion to new pathogens as well, so just wanted your long-term outlook on durability beyond COVID.

We've heard about both of them today.

Thanks.

Sure.

One is the meatball that you'll be trying later from Motif Foodworks.

And before I do that, I will mention I said 300-liter.

It's actually 3,000-liter tanks, in West Sacramento at the facility.

And the other we heard about this morning with respect to vaccinating a capping enzyme.

And the other we hear about this morning with respect to vaccinia capping enzyme this is a protein.

Nicely corrected by Emily Greenhagen, who has that up for us.

This is a protein that is essential for manufacturing mRNA vaccines.

So, yeah, on the international front, our general view is this type of kind of airport monitoring and things like that, that should be happening all over the world.

That is essential for manufacturing.

And our program with Aldebaran enabled them to produce 10 times more of this protein, which is extremely important as we try to manufacture enough vaccines for the entire world.

RNA vaccines in our program with without that run enabled them to produce 10 times more of this protein which is extremely important as we try to manufacture enough vaccines for <unk> for the entire world.

I think our model, I think, goes to do this through lab networks, right?

Okay, so in terms of using the CDK, again, I think this is really impactful for those, new developers who are trying to start a company, want to create a product with synthetic biology to help them focus on developing their product faster.

Okay. So in terms of using the C. D. K again I think this is really impactful for those new developers who were trying to start a company wants to create a product with a synthetic biology to help them focus on developing their product faster and to do that we want to make this offering accessible to those companies. So in terms of what does it cost to use the key.

So, we've done that in the US.

We think we can expand that internationally.

So, I think you'll just see us follow our same, playbook to sort of build the same infrastructure out as much as we can internationally.

So, not a lot more to it than that.

And to do that, we want to make this offering accessible to those companies.

I think we're going to learn as we go as to what's different.

So in terms of what does it cost to use the CDK, our introductory, you know, introductory, pricing for the Phase I work is $100,000.

CDK our introductory.

Our introductory pricing for the for the phase one work as a $100000. So remember again for scientists working for a year. It was gonna coffee a million dollars. So for a 110th of the cost. We think we can do more than 10 times the amount of work and help you focus those scientists working on to work on your product rather than putting pieces of DNA together to make yourself. So.

So remember, again, for scientists working for a year, it's going to cost you a million, dollars.

So for one-tenth of the cost, we think we can do more than 10 times the amount of work, and help you focus those scientists to work on your product rather than putting pieces of DNA together to make your cell.

Again, highly political, right?

So we're really excited about this, looking forward to talking to new developers about, that product.

We're really excited about this looking forward to talking to developers about about that products and today. In fact, we've we've been doing some outreach with different companies to try to get them on the platform and to give you. An example of the type of company that we're able to bring on the platform with CDK is for the first time I'm really excited to tell you a little bit about humblebee bio so.

So, it really varies based on different countries.

And today, in fact, we've been doing some outreach with different companies to try to, get them on the platform.

But we, have the experience of doing many states in the US.

To give you an example of the type of company that we're able to bring on the platform with, CDKs for the first time, I'm really excited to tell you a little bit about Humble Bee, Bio. So this is a company where the founders were really inspired by the lack of biodegradable, high-performance materials.

And each one of those, as you may notice, runs almost like a little country here in the US.

And so, we have a little bit of sense of that.

And then I think the other thing you asked was about the – what was it?

The new – Emerging pathogen. The emerging pathogen.

This is a company where the founders were really inspired by.

Adult the lack of biodegradable high performance materials.

Thank you.

Yeah.

They're also great scientists, and they identified really interesting proteins that are made, in, you guessed it, bees.

They're also great scientists and they identified really interesting proteins that are made and you guessed it bes.

I mean, look, again, the idea is once you have this, infrastructure in place, you could use it for monitoring for multiple pathogens. I think that's exactly the future vision here. Yeah.

And what they need is they need Ginkgo's platform to help express and optimize the, production of those bee proteins so that they can start to do applications testing and make sure that they have a usable material.

And what they need is they need ginkgo platform to help express and optimize the production of those be proteins. So that they can start to do applications testing and make sure that they have a usable materials. So you know this is just the first of many companies do have to introduce two of the platform via via the CDK.

So, I think you would expect us to do that over time.

So this is just the first of many companies we hope to introduce to the platform via the, CDK.

And hopefully, that's something that governments would be interested in.

It seems, again, to me like a no-brainer.

Okay.

I didn't really explain as much as I really wanted to about the CDK.

Okay.

I didn't really explain as much as I really wanted to about the CDK. This is a there's a lot more to talk about a few ways to do that one the CDK team is here. So all the folks on the flight here are going to be sitting in in the back I think they're wearing red hats to make them easier to identify and these are the these are the actual scientists and business development folks who had been.

There's a lot more to talk about.

A few ways to do that.

But yeah, that would be the direction we'd like to take it.

One, the CDK team is here.

Thanks so much, Vivian.

So all the folks on the slide here are going to be sitting in the back.

And thank you to everyone for joining us for our Q2 earnings.

I think they're wearing red hats to make them easier to identify.

And we'll, see you next quarter.

Thanks, everybody.

And these are the actual scientists and business development folks who have been working with, customers over the last couple months to make sure that this is the right product for them.

All right.

Working with customers over the last couple of months just to make sure that this is the right product for them and then on November 11th myself, the CDK team and Jacob interviewed of course, we'll be doing in developers online events.

Welcome back, everybody.

And then on November 11th, myself, the CDK team, and Jake Wintermute, of course, will, be doing a developer's online event called Grow with Ginkgo. And this is actually going to include hands-on sessions with our technical teams to help, new developers understand how to use the platform better.

Called grow with Ginkgo and this is actually going to include hands on sessions with our technical teams to help new developers understand how to use the platform better.

And thanks for staying with us for the last few hours for our, very first Investor Day.

So with that, thank you, and thank you, Jake.

So with that.

Thank you and thank you Jake.

I'm thrilled to be here with my friends and colleagues at Ginkgo, who you just heard from over the past few hours, who are going to answer some of the questions that have come in through the platform and via Twitter.

All right.

And so, Jason, there was one that came in that was one of my favorites.

So now we've got to sum up what we've seen this afternoon.

And so, I'm going to throw the, first one to you.

Vince on Twitter says, listening to SRNG at Ginkgo's Investor Day, pretty sure 95% of investors have no idea what these people are talking about, even though they're trying to explain the science.

We have a lot to, talk about.

I'm going to ask Patrick to stay on stage with me.

Offering each of you your own personal CDK. Please look under your seats.

[laughter].

No I'm just kidding [laughter], we can't do that we can't do that nobody looks.

[laughter] nobody looked.

That would be looked at.

But directionally Directionally, that's where we want to go that's right, that's where we want to go and we need more.

Programs like the CDK <unk>.

Plug and play they are ready to wear they reduce the friction between knowing what you want to do.

And making it happen on.

On the platform.

So I'd tell you what they know over in software.

And so we're over in regular tech Yeah, all tech over an old tech over a nonliving attack I want to tell you what they know.

They know you've Gotta love.

Your developers you have to love your developers.

If you're making an operating system, if you're making a platform it lives and dies by the people who choose your your platform for their creations.

You have to love your developers you have to shower them with with technical documentation, that's right and licensing.

Can I give it can we give it up for licenses license isn't documentation.

And supports and supports yet don't forget standards and what standard and standards can we give it up our standards.

Yes, yes.

Yes.

And last one at least can we give it up for the developers.

But the developers.

[noise].

Everyone is waiting to hear the business, revenue, potential, as opposed to the science behind Ginkgo.

So one of the questions that I get most frequently from investors once they feel like they understand a little bit about cell programming and what that's going to do for the world is oh, okay, but what is it the ginkgo actually dies in the foundry when it when is the work that you do and we think are the best way to to help explain that was to just show you directly to walk you.

Through the foundry, we'd obviously love to have you in Boston in person to walk through that in the meantime, I'm going to ask Barry to take you through a video tour of the foundry and introduce you to some of our leaders across software and automation, who help make what we do in the foundry possible. He is also going to introduce you to Patrick Boyle Who's our head of codebase, which incorporates all of the biological.

Data and parts and strains that we use in conjunction with our foundry to enable projects for our customers across the entire cell programming landscape Barry take it away.

And then, Kasa Mikulita says, can you cover the basics in your own words?

I need your energy.

So you've already heard a lot today about the foundry, but you may well be wondering what do we mean when we talk about our foundry well first of all the foundry is one of the key pillars of our platform that we've been building a kimco over the last 13 years and I'm really excited to be able to show you. Some more of the detail about that today ordinarily I'd love to be bringing you on a physical tour of our <unk>.

What does Ginkgo sell to which customer for what cost? Like, what's the business model in a couple of sentences?

We need some big developers energy for this session.

So, I'm going to give you 30 seconds.

I need it.

Let's see if you can do it there.

I need it from you.

Foundries and showing off the people the technologies the instruments the robots that we've been developing over the past number of years, but today I hope to still be able to bring you inside the foundry as best as we can and expose you to all of those incredible technologies, you're also going to get to hear from some of my wonderful colleagues youre going to hear from Kristen <unk>, who is our head of.

Awesome.

Please give it to me.

Give it to me.

Developers.

All right.

You ready, Patrick?

Automation, you're going to hear from Jamie Cho, who is our head of software and you're also going to hear from Dave <unk>, who is our head of Dev ops and Youre.

Developers.

Developers.

And you're going to hear about how all of those different disciplines and technologies come together to power. The ginkgo foundry one of the first questions that we always get from folks is what is our foundry and what do we do in there and that's a very reasonable question because foundries and this concept of programming biology is foreign to almost.

I love it.

Developers.

Everybody, who hasn't been doing it for 20 years like like the team at Ginkgo, So I'm going to start there and let's talk a little bit about what what actually happens in our foundry and what is the overall process of programming biology for us. It typically starts with an interaction with a potential partner or a customer where we jointly.

So yeah, so the core idea behind Ginkgo is cells run on digital code in, the form of DNA, kind of like computers run on zeros and ones, cells run on ATCs and Gs.

Developers.

Because you can program them, we should expect there's going to be app developers, right? Folks, who want to program cells to do new things, take those to market and make money doing it.

Developers.

Ginkgo, simply, we're an app store, right?

We provide tools to folks that want to program cells to do new things to make it easier and faster for them to do it.

Good.

<unk> the concept of a cell program that will help that customer make a new product or a better version of an existing product through those conversations we will develop a specification for the cell program that we're going to build with them.

And then we help them bring those cells to market. In exchange for that, they pay us, they pay us both while we're developing the cell.

Okay.

And we get just like you would in a mobile phone app store, we get a piece of the value of the app.

Cut it off.

Cut it off.

Once we've reached that agreed upon specification work is turned over to our cell designers, who will refine and develop the concept and the specification of how we're going to make that sell program and they'll continue to develop that using codebase from our collection as well as Nature's code.

And that's how we make money.

Stop.

That was pretty close to 30 seconds, but I'll give it to you.

What, have we seen?

And then on StockTwits here, Odd Marketable Security says, fancy video with lots of fancy words.

Some fancy words I haven't heard them say.

What have we seen?

Ginkgo is here for the developers.

15 billion and 150 million of revs.

Some of these companies they've already launched.

They're doing a lot of talking to not address the elephant in, the room.

They're out there transforming industries.

Base, the cells and genetic assets that are out in nature, and our designers will bring those different pieces of kobe's together to develop a detailed design, we put all of our best learning accumulated over many cell programs into those early designs. Once we have those detailed designs.

So let's address the elephant in the room.

But that's not enough.

How do we get to a $15 billion valuation with 150 million of revenue this year?

We want more developers.

Yeah.

That are specified at the level of DNA sequences all in our computational manner. Those designs are handed over to our DNA synthesis and our build teams their task is to take those conceptual and computational designs and turn them into reality in the in the lab. So that starts typically with D.

So this comes back to, I'll touch on this app store idea again here.

So there's two ways we get paid.

We get paid while we're developing a cell for a customer. They pay us effectively fees for using the facility I'm sitting in front of and that Barry and Kristen walked through earlier, our foundry on a usage basis. And so in 2021, we guide towards 100 million out of that 150 is foundry revenue from using that facility.

Straightforward to understand.

The app store side of the business though, ultimately we are going to get a piece of the value of those program cells for customers back to Ginkgo.

So now we've got the CDK. It's going to make it faster and, cheaper and easier to become a developer.

In a synthesis, where we print out the new DNA sequences that are sell designers have come up with.

And that's a new idea in biotech.

But that's still not enough.

It's actually been a very, very successful business model in tech, but in biotech, you haven't really seen it.

It's not enough.

Once we have those new DNA sequences are build teams will take those DNA sequences put them into the genomes of cells that we want to work with we will finally at this stage of the process use sequencing technology DNA a reading in order to make sure that we've made all of the right modifications.

People tend to develop their own apps, right?

I want hundreds of developers.

If you're a Genentech or a Roche, you've got a drug, you own that thing a hundred percent.

You're really a product company.

Well, Ginkgo is not a product company.

I want you to be a developer.

We're a platform. And so when these apps get developed, we get a piece either through royalties or through equity, in the companies that are developing those applications.

And that comes back to us in the long run, right?

I want you to be a developer.

So in the near term, that's not where the revenues are coming, but over time, as those apps go to market, that's going to be, in my view, the lion's share of the value of the company.

The DNA inside the cells that were working with now we have a real lifestyle in the lab that is the physical instantiation of our designers concept and now. The next question is how does that self perform.

And that's not included.

I want you to be a developer.

If you look at our projections in the financial model, you know, you and Mark walked through this in the video, that's all foundry revenue.

And so that's why, surprise announcement, I did not clear, this with Patrick.

It doesn't include that value coming back to us through royalties or equity in the applications.

We are today offering each of you your own personal CDK. Please look under your seats.

And so, you know, if you look at our numbers, we ended last year with 48 sell programs like that. We're adding 23 new programs this year, seven just in the first quarter.

The rate we're adding, these is going up dramatically.

And when you see news, for example, last week, Motif Foodworks announced a more than $250 million fundraise.

That's great news for Ginkgo shareholders because we have a good chunk of equity in Motif because they're an app developer on our platform.

No, I'm just kidding.

We can't do that.

We can't do that.

Nobody looked. Nobody looked.

Nobody looked.

But directionally, directionally, that's where we want to go.

Answered that question, we hand, those newly program cells over to our test teams, who bring together a wide array of different capabilities that we use in order to understand how those new cell prototypes that we've been building perform do they meet the customers specifications.

That's where we want to go.

Do they nearly meet the customers specifications do we still have a lot of work to do so those test teams use technologies like mass spectrometry liquid chromatography.

We need more programs like the CDK.

Plug and play.

They're, ready to wear.

They reduce the friction between knowing what you want to do and making it happen on the platform.

High throughput screening next generation sequencing in order to understand what's happening inside the cells that we've built and to measure the performance of those cells.

Typically we will find that some of those prototypes cells perform really well and some perform soco and some don't perform well at all.

All of that information across many different designs, we will integrate together and use it to come up with a new round of designs and then we will iterate through that process of designing building cells testing, how they perform until we meet the customers specifications and a lot of the technology in our foundry is oriented.

Entered towards making that process as efficient as possible and investing in the tools and technologies that allow that process to happen faster and with a higher probability of success than has been possible previous so when you see inside our foundries and when we're able to bring you physically.

When Cronos says they're going to market with a cannabinoid, that's good news for Ginkgo, right?

So I tell you what they know over in software.

And so that's the part of it that ultimately is justifying the $15 billion valuation.

You know, over in regular tech.

So our site at Kimco, what Youre going to see is first off what looks like kind of like a lab, but also a little bit different from a normal lab.

Yeah, old tech.

Over in old tech.

Just because for our foundry to be efficient, but we've had to do is start with a conventional lab and then bring a lot of concepts in from manufacturing from operations research in order to build scalable high throughput automated processes that allow us to.

Over in non-living tech.

More quickly and effectively program cells for our partners.

It's, really where the majority of the value of Ginkgo is going to come from in the future, that app.

I'll tell you what they know.

They know you've got to love your developers.

And so what you will see in our foundry is not the typical row after row of benches with a scientist working at each bench you will see some of that in our foundries, but what you will see more and more of is sophisticated instrumentation.

Store.

You have to love your developers.

If you're making an operating system, if you're making a platform, it lives and dies by the, people who choose your platform for their creations.

Thanks, Jason.

You have to love your developers.

<unk>.

And so a bunch of questions have come in on the on the platform around I think, folks who are building their models and trying to kind of get get under the hood and get under the weeds. And so, Mark, I was hoping, you know, one of the topics we didn't cover in the last session was really some of the underlying drivers of the model.

You have to shower them with technical documentation.

Liquid handling instruments.

The wide array of sophisticated and complex machinery and instrumentation that we use to amplify and multiply what our scientists are able to do in our foundry, we bring the best in robotic and software automation together.

That's right.

Together with the unique skills and insights that humans have in order to be able to program cells more effectively a higher probability of success than would ordinarily be path.

So what you'll hear in our lives what you'll hear in our foundries as youll hear relatively loud hum of equipment of robotic arms of instruments, moving liquids back and forth will hear that harm of activity that is largely consisting of robots and instruments scaling up empowering the work of our foundries, it's essential to our fee.

And in both the Foundry business and the downstream, how would you guide people towards their sort of modeling endeavors around this Yeah, so I guess the way that we think about it is we start with Foundry capacity, and our ability to improve throughput in that capacity.

And licenses.

And so, as you know, and as we've discussed, one of the tenets of our strategy is to get more programs on the Foundry as we get more programs on the Foundry. That drives a Foundry scale economic.

<unk> that we'd be able to run many many designs are prototypes through every step of that process in order to minimize the overall timeline of a project or a cell program to develop a cell that meets the customer's specification.

So not only do we want to be able to look at thousands or tens of thousands of prototypes.

For every cell program.

We also want to be able to work on many cell programs at the same time.

Today, we work on tens of cell programs in the ginkgo foundry at any point in time.

In the future, we want to be able to work on hundreds of cell programs at any given time when you put all of that together.

You find you have a complex multi step process of designing building and testing cells.

You want to be able to do that process at scale with tens of thousands of prototypes within each program and we want to be able to do many programs at let's say at the same time.

The result of that is that scale logistics operations, the throughput of our foundries becomes really really important those robotic.

Our robotic and software automation paired with what humans can do means that overall, our foundry can do way way more work and way way more cell program, then we'd be possible by people alone.

It also pushes us to make investments in technology, which gives us productivity improvements.

And so this really leaves in nicely for you to hear from Kristen Tran our head of automation will tell you about all of the incredible robotic automation that we used throughout the ginkgo foundries.

And so you start with Foundry capacity and how much of that do we have and how quickly can we add to that. We were then, sort of focused in getting more programs on the Foundry that drives a scale economic that builds code base.

At Ginkgo, we try to automate as much as we can.

All of that, in turn, enhances the value proposition that scale economic results in a cost savings that we can pass on to our customers.

And so we do do that. It also, like I said, enhances the code base, which makes what we're offering more valuable and it makes the next project easier and faster.

And so collectively over time, and we've talked about that flywheel, what you see is the revenue is increasing and us taking on more programs and the profit, the overall company profitability starts to improve.

And as you've seen, we're expecting to start approaching break even on the EBITDA line around end of 2024, sort of roughly speaking.

We start with small scale automation are really accessible stations for scientists and engineers to walk up to I'm really easy for them to start using once we actually start scaling up we can actually start stringing. These operations together seamlessly on an integrated works now which really is.

And what you're seeing there in terms of a driver is really we're just leveraging, our R&D and S&G infrastructure on a higher revenue base.

And none of that includes the downstream value shares.

Laos us to kind of really take off on that scale.

So the other sort of core driver of the business is that you will start to see the monetization of either royalty or equity interests also contributing to the bottom line.

It really allows the scientists output to increase 10 X 100, <unk> thousand acts and really that's that's our goal we want to maximize that we want to automate as much as we can.

Great.

Thanks, Mark.

And really whatever theyre going to let us do well, we'll try it instead of having a scientist go from station to station we have the centralized robotic arm, that's going to handle all of the samples and it's also going to record everything and it's going to produce that valuable data that we need for our cell program.

So you mentioned that the sort of first element of the model is capacity.

Barry, you talked a lot about Knight's Law.

I think folks find that concept really interesting, but how the hell do we keep Knight's Law going and what gives you confidence that we can maintain that going forward?

And for our economy.

My team and I do as automation engineers, we like to look at what the act physical activities people are doing in the lab were engineering cells and that requires a lot of precise handling of samples. What my team does is we take these activities in the lab that scientists are Emmanuel.

What are the top challenges that you see?

Great question.

Doing such as tight padding and we actually make a custom integration. So we integrate these in a works out with that customer integration not only can we really control the timing and the precision of the activity, but we can actually track everything within our software.

So that all of the data can be collected and all of that can be reused for future engineering projects for automation. In addition to automating manual processes that.

One we always like to talk about.

First of all, I have to say that neither I or, anyone at Ginkgo can predict the future.

But I'll note that neither could Gordon Moore in 1965 when he made the prediction that ultimately became the Moore's Law that we know today.

Instead, he saw a trend, which we have seen and we have shown you all.

And he saw no fundamental physical reason why that trend could not continue. All that was required was continuing investment driven by tremendous commercial opportunity. And we believe that the exact same conditions are true today in synthetic biology. So we just need to do the work.

The Intest would normally do with the bench, we can actually go beyond human capability and miniaturize certain reagents and certain reactions. So an example of this is with our acoustic liquid handler that can actually defense nano liter droplets of like lead with one of our core process.

To be more practical about the answer, Knight's Law is driven by automation and miniaturization of the way we do the work, in our foundries.

We have a lot of low hanging fruit still to be captured or still to be collected in terms of how we do that work and how we automate it. And that's just using the technologies that are mature and available to us today.

We were actually able to miniaturize reaction 50 X. In addition to that it increases the speed and output. So our scientists are able to produce.

Hundreds to a thousand X more output that they can trust and that Theyre able to go back to one of our flags and really iterate on their process and on their design I think there is a misconception that you know were trying to replace you know the activities that certain people do in the lab, but the way that we look at it is.

We really want to augment the ability of our scientists we want to increase their ability to perform experiments in the lab, we want to give them. The peace of mind that it's going to be done safely that it's going to be done with high precision and high quality.

And with these different scales of automation, they can actually increase their output and create more valuable data for them to iterate on their process something that's really special about <unk>. Five is an addition to the large scale that it provides.

Actually all of this really interesting new technology, where we're able to sense. The success of each operation. So you can tell whether or not in operation failed was successful and record. It we use different types of sensing technology, including acoustics slight scattering sensing.

The flight proximity sensors and pinhole cameras.

And what's really great is we implemented this empire X five and our latest facility, but we can actually take that technology and apply it to all the different scales of work that we do huge route in the foundry. So all of this technology that we're developing and buyer X fives, we always have an eye, unlike well where else can we leverage that.

What else can be automated warehouses is going to be valuable for us really that's how we develop our automation. We are always thinking about it in like what are these new tools and how can they be even more helpful to ginkgo and two our science.

Lot of resources went into building fireworks fives, but something that's really unique about the automation at kimco is that we have our own custom integration and software integration. So we work really closely with our colleagues in digital technologies, we have a great <unk>.

<unk> and what we do is we try to think like how can we leverage all of that technology, that's already out there and make it really useful for ginkgo and leverage it in a flexible way to apply to multiple programs.

Our infrastructure through custom automation and custom software can actually be applied throughout the foundry. It can be applied for a different cell programs. It cannot be applied for different organisms, and it's kind of amazing the diversity of scientific processes that can be performed on a same store.

Out of infrastructure I think we're only really able to do that because we have the in house development team both on the automation side and on the software side as well as the Dev ops side, we all work together really collaboratively to make sure that that integration is as seamless as possible.

And we're constantly thinking about how can we scale how can we believe more efficient we always have to pair that with flexibility, which is always quite the challenge, but it's a really fun challenge all of our engineers that ginkgo are really interested and being the ones that solve that problem and it's been pretty amazing.

To see what the teams are capable of we get to work really collaboratively with our engineering partners to create new technology to create new capabilities on existing robotics and in addition to that sometimes we even have custom partnerships, where we're able to create something truly unique for <unk>.

Go fireworks five Israeli Prime example of this where we leverage existing high throughput manufacturing technology, but we're able to apply it to the synthetic biology space.

Can we give it, up for licenses?

The process of designing DNA, which must seem like a very abstract concept.

Licenses and documentation?

Really involves using computers to go from ideas down to detailed DNA sequences that can be thousands or tens of thousands of letters of DNA Lac la <unk>, because those DNA sequences are very long.

And supports?

And because we'd like to be able to design many of them at the same time, we've built a suite of design tools computational design tools that our designers can use in order to come up with the best possible DNA designs for every cell program. They are working on when you see our designers working but they're really doing is interacting with software tool.

And supports?

Yes?

Don't forget standards.

And what?

Rules, many of which are proprietary that allow them to stitch different pieces of DNA together computationally and a quick and efficient way almost as easily as you can drag and drop objects in a software package, but those objects are actually DNA sequences that were subsequently going to print out so.

Standards.

And standards?

Can we give it up for standards?

Once we've done that computational design process, which really looks like almost like an architect and engineer interacting with computer aided design.

Yes.

Yes.

And last but not least, can we give it up for the developers?

For the developers.

Then we move over into the lab DNA printing.

Again, that's a very abstract concept well does it look like a desktop.

Printer that you might have at home or what does it look like.

So one of the questions that I get most frequently from investors, once they feel like they understand, a little bit about cell programming and what that's going to do for the world is, okay, but what is it that Ginkgo actually does in the foundry?

Well, it's a lab operation.

But it uses increasingly advanced sophisticated technology in order to make the operation of printing DNA is cost effective and reliable as possible.

As we work with our partners, folks like Twist and Berkeley Lights, and as we see how their technologies are improving, we can see how, we're going to be able to continue to increase the scale and drive down the unit costs of the of the work in our in our foundries.

What is the work that you do?

So we work with.

Partners, such as twist Bioscience.

So in the in the midterm, we look at those kinds of technologies for better DNA printing, better measurements of how cells are performing greater miniaturization as being the drivers of knife flow.

And we figured the best way to help explain that was to just show you directly, to walk, you through the foundry.

To use their proprietary technology for printing out literally using inkjet printer technology to <unk>.

And then as we look to the to the longer term, the reality is that cells and DNA are really, really tiny, and they make copies of themselves very easily.

We'd obviously love to have you in Boston in person to walk through, but in the meantime, I'm going to ask Barry to take you through a video tour of the foundry and introduce you to some of our leaders across software and automation who help make what we do in the foundry possible.

He's also going to introduce you to Patrick Boyle, who's our head of code base, which incorporates all of the biological data and parts and strains that we use in conjunction with our foundry to enable projects for our customers across the entire cell programming landscape.

Place individuals' DNA bases together in the right sequence, so that we get the new DNA sequence that corresponds to what our designers are developed in our computer aided design tools. So DNA printing really looks like a very very complicated printer.

And so what that points to is the ability for us to really miniaturize our operations and our work down to the scale of individual cells and molecules.

Barry, take it away.

So you've already heard a lot today about the Foundry, but you may well be wondering, what do we mean when we talk about our Foundry?

And in the kind of multiplex library based work we do already, we're able to we're able, to realize that potential in certain cases today and in the future, in many cases, or most of the cases of the projects that we that we work on.

Well, first of all, the Foundry is one of the key pillars of our platform that we've, been building at Ginkgo over the last 13 years, and I'm really excited to be able to show you some more of the detail about that today.

Ordinarily, I'd love to be bringing you on a physical tour of our Foundry and showing, off the people, the technologies, the instruments, the robots that we've been developing over the past number of years.

Thereafter, once we have short printed DNA sequences.

But today, I hope to still be able to bring you inside the Foundry as best as we can and, expose you to all those incredible technologies.

You're also going to get to hear from some of my wonderful colleagues.

Say 100 basis long, we next need to stitch those hundred base sequences together into a thousand or a 10000 base sequence of DNA that encodes a gene.

So we see both near, mid and long term ways to continue to drive the the scale and the efficiencies that are going to drive knife flow.

Great, thanks.

Thanks, Barry.

For a protein or set of genes for metabolic pathway.

And, and, you know, Patrick, you know, I think codebase, is always a I think, an interesting topic for folks.

And, you know, it definitely is part of knife law, but we don't have the same kind of historical metrics that we've been able to, you know, kind of plot out for people around codebase.

And that operation stitching, those short pieces of DNA together is again, a lab operation and it looks like a lot of liquid handling it looks like a lot of moving small volumes of liquid from one source to a destination and mixing lots of different liquids together and so that's a process, where we rely very heavily on liquid handling automation to scale the amount of DNA Mark.

And so, you know, I think we get a lot of questions around, how do you measure codebase?

Like, what metrics should we be looking for?

You're going to hear from Kristen Tran, who is our Head of Automation.

<unk> that we can build at the same time for many cell programs. Once we put that DNA into the cells and that process again really just looked like a liquid handling process. We take a little chose cells, we've taken a little to the DNA, we make some of the DNA into the cells, we treat them with some heat in some chemicals and that helps us.

What are you going to what are you going to report on?

<unk> take up the DNA inside them and integrate the new DNA into the genome of the cells.

Once we have that operation done. We then grow the cells. So we start with a tiny tube with just a handful of cells in it that have the new DNA and we allowed those cells to grow so that we have millions or billions of copies of that of that newly program sell those cells grow in either.

And so we'd love you to just talk a little bit about how you as the head of codebase, how you think about measuring codebase and really what matters there?

Yeah, that's a great question.

And I think, you know, we're still trying to wrap our heads, around around codebase and how best to quantify it. But you know, for us, there are kind of two key factors that we try to keep track of one is just sheer quantity.

And that's really where we leverage the scale of the foundry to make sure that we're basically sourcing generating and characterizing as much unique biology as we can, year over year, right.

So So from my perspective, we actually rely a lot on nice law to say, if we are actually scaling the ability of the foundry to improve the number of operations we can do year over year, from my perspective, that means we can continue to drive the quantity of new codebase that we can that we can develop.

Now, how do we use that to actually help our customers achieve their goals faster?

That's where quality comes in. And one of the metrics we use for quality is how often are we actually reusing particular codebase assets, right? Some really important stuff sits on the shelf for a year or more before we find the right, opportunity to reuse it.

But certain things we go back to over and over again. And that's what we're trying to really quantify into what we're calling cell development kits, basically playbooks that we can apply over and over again, reusing valuable codebase that has been proven over the course of multiple projects.

So again, you know, nice law means that we can really deliver on quantity and mine through that for useful information and useful new strategies and designs, but ultimately reuse is how we measure quality and something that we pay a lot of attention to.

Right, thanks.

Mall Bioreactors that looked like miniaturized versions of.

And so maybe then wrapping up the, Oh, just a small addition, you know, Patrick, the I think the CDK is an inspired name, right?

Fermentation systems at our brewery.

So this is coming out of software development kits, right?

And as I understand it, you know, this is part of the package you get, you know, as part of engaging with like a mobile phone ecosystem, right?

If you want to develop an app, you get, you know, from Apple, like an, SDK, and it helps you make, you know, put the button on the phone in the right place. It's existing code that makes it easier to launch, and Applications.

Or it happens in place that have hundreds of individual wells in them. So that we can grow many different populations of cells or many different prototype cells at the same time. Once we have those cells grown up we have lots and lots of cells. Then the next step is often to sequence them. So DNA re.

And in exchange for that, because that's a valuable thing for developer, Apple's getting to take a toll on those apps that get developed, right.

And so this is very much in, line, you know, even the naming of things here, this idea of the CDK, this is really, we think the evolution of genetic engineering and cell programming, we're taking lessons from software to do it.

And I think this is what I'm really excited about is these CDKs.

Thanks, guys. And so just rounding out the capacity topic, an important driver of our capacity is also, just our operations and how well we function together as a team.

Obviously, folks have seen our sort of vision for the future, and that involves a lot of growth.

So Reshma, you know, I'd love to, this is my own question.

<unk>, that's the process by which we read all the DNA that's in the cell and make sure that we've put the right DNA into the cell that's an operation that happens on very sophisticated instruments and the machine.

This one didn't get submitted.

I just like it, like talking, about it.

Streams data to our proprietary databases in our data Lake here at Ginkgo nut data contains all the DNA sequences that are found in those cells. That's again, a computational or a digital process. Once we know that those DNA sequences are right and we move on to measuring the performance of those cells and what that looks like is.

Taking the cells.

Observing them via instrumentation that can say look at the levels of particular molecules or identify a particular molecules that are being made by those cells and really allow us to look inside the metabolism of the cell or the on the behavior of the cells. So that we can understand how its performance matches up to what we expect.

And I'd love to just ask you what you see as the biggest kind of operational hurdles and how you think about scaling up an organization like Ginkgo over the next four or five years.

So when you see our testing operations in our foundry what Youll generally see our collections of instruments that are 24 seven taking.

Taking small samples from a culture of cells and chemically analyzing those samples to understand what's in there. So that we can understand how those cells are performing youll see in the ginkgo foundry, if there's enormous amount of work happening across many different cell programs at the same time all of those physical operations all of that work that's happening is very hard to track.

Yeah, I think we really think about the challenges of scaling on sort of two fronts.

The first is, really around our culture, right.

So we have a lot of here at Ginkgo about growing our culture.

And that's because for a mission driven company like Ginkgo, our team is fundamental and, instrumental to Ginkgo success overall, right.

And again, team performance equals Ginkgo success.

And the biggest impact we can have on our team is really fostering a culture here at Ginkgo that helps us attract the best talent, retain the best talent.

And so we really like to think about our culture as not just who we are today, but who we aspire to be.

And really, I think, at the end of the day, culture has a huge outside influence on that team's performance, right.

And so continuing to grow our culture as we grow the company, I think is fundamental to being able to scale effectively.

I think the second front that we think about sort of the operational challenges of scaling is really around, you know, all the normal things like organizations have to do when they scale, right, they need to specialize roles, they need to add organizational structure, they need to introduce process, right.

But we don't want to get ahead of our skis on that, because there's a cost and an overhead to, all of those things.

And, you know, I think Ben Horowitz actually writes really eloquently on this topic, he talks about how you need to give ground grudgingly to this stuff, right.

And so striking that right balance of giving ground grudgingly to adding those things to our company as we grow is really important.

And so at Ginkgo, we really try to balance like we know, as we grow, we need to add, you know, specialization, we need to add process, we need to add, you know, structure to our organization.

And we're really fortunate because we have board members like Christian Henry and Sean Funker, who have led fast growing technology companies.

And so they've been a great source of advice and guidance as we grow.

Unless you have really good software tools to manage the operations of the foundry and also to collect all of the data and meta data that is being produced across all of those operations and bring all of that data into a location like a database and into a format that our science.

<unk> can analyze what's happening and decide what to do next.

We've invested an enormous amount of energy and time over the last 12 years building proprietary software tools that are completely critical to the operation of our foundry. So that we can operate at a scale that would be hard to operate it otherwise and at a level of quality and.

Sophistication that would be impossible without dedicated software tools that were built specifically for our operation who better to tell you about that that our head of software Jamie Zhou.

Yeah, I totally agree.

You're going to hear from Jamie Cho, who is our Head of Software, and you're also going, to hear from Dave Treff, who is our Head of DevOps and IT.

You're going to hear about how all those different disciplines and technologies come together, to power the Ginkgo Foundry.

All right.

One of the first questions that we always get from folks is, what is our Foundry and, what do we do in there?

The sulfur rebuild is uniquely tailored to kinko's foundries needs. Our software team has a lot of the same traditional skills that you see on other software teams. They know how to program in Python, and Ruby rails and react and all of those skills, but what's really special about our team.

And that's a very reasonable question because Foundry's and this concept of programming, biology is foreign to almost everybody who hasn't been doing it for 20 years, like the team at Ginkgo.

So I'm going to start there and let's talk a little bit about, well, what actually happens, in our Foundry and what is the overall process of programming biology?

For us, it typically starts with an interaction with a potential partner or customer where, we jointly develop the concept of a cell program that will help that customer make a new product or a better version of an existing product. Through those conversations, we'll develop a specification for the cell program that, we're going to build with them.

Once we've reached that agreed upon specification, the work is turned over to our cell designers, who will refine and develop the concept and the specification of how we're going to make that cell program.

<unk> is we are all passionate about biology and in fact, our mission is to make to like for software that makes biology easier to engineer kinko's.

And they'll continue to develop that using code base from our collection, as well as, nature's code base, the cells and genetic assets that are out in nature, and our designers will bring those different pieces of code base together to develop a detailed design.

We put all of our best learning accumulated over many cell programs into those early designs. Once we have those detailed designs that are specified at the level of DNA sequences, all, in a computational manner, those designs are handed over to our DNA synthesis and our build teams. Their task is to take those conceptual and computational designs and turn them into reality, in the lab. That starts typically with DNA synthesis, where we print out the new DNA sequences that, our cell designers have come up with.

Once we have those new DNA sequences, our build teams will take those DNA sequences, and put them into the genomes of cells that we want to work with.

We will finally, at this stage of the process, use sequencing technology, DNA reading, in, order to make sure that we've made all of the right modifications to the DNA inside the cells that we're working with.

Now we have a real-life cell in the lab that is the physical instantiation of our designer's, concept, and now the next question is, how does that cell perform?

To answer that question, we hand those newly programmed cells over to our test teams, who, bring together a wide array of different capabilities that we use in order to understand how those new cell prototypes that we've been building perform.

So kind of going back to Mark's answer earlier, you know, first input is capacity, then we actually have to go find some demand.

Do they meet the customer's specifications?

So Ina and Jen, and Matt, we're lucky to have you guys on the phone because you lead, our commercial business.

Do they nearly meet the customer's specifications?

So maybe Ina, I'll start with you.

Do we still have a lot of work to do?

<unk> focus on engineering biology at scale means that we have to build a software platform that can handle that level of scale, we have powerful workflow systems that allow us to generate.

We got a question from Xero Analytics on Twitter, saying, how far into the future do you generally have visibility on, bookings?

So those test teams use technologies like mass spectrometry, liquid chromatography, high-throughput screening, next-generation sequencing, in order to understand what's happening inside the cells that we've built and to measure the performance of those cells.

And what are the limits on that visibility?

Typically, we will find that some of those prototype cells perform really well, some, perform so-so, and some don't perform well at all. All of that information across many different designs, we'll integrate together and use it to come up with a new round of designs. And then we will iterate through that process of designing, building cells, testing how they, perform until we meet the customer's specifications.

And so I might just ask, like, you know, you to talk about kind of our sales cycle and process and what that looks like at Ginkgo and the visibility that bears up.

And a lot of the technology in our foundry is oriented towards making that process as efficient as possible and investing in the tools and technologies that allow that process to happen faster and with a higher probability of success than has been possible previously.

Yeah, that's a great question.

So when you see inside our foundries and when we're able to bring you physically to our site at Ginkgo, what you're going to see is first off what looks like kind of like a lab, but also a little bit different from a normal lab.

Thank you for that.

And that's because for our foundry to be efficient, what we've had to do is start with a conventional lab and then bring a lot of concepts in from manufacturing, from operations research, in order to build scalable, high-throughput, automated processes that allow us to more quickly and effectively program cells for our partners.

And so let me start with the deal process to really kind of provide a bit of context to that question.

And so what you will see in our foundry is not the typical row after row of benches with a scientist working at each bench. You will see some of that in our foundries, but what you will see more and more of is sophisticated instrumentation, robotics, liquid handling instruments, and a wide array of sophisticated and complex machinery and instrumentation that we use to amplify and multiply what our scientists are able to do in our foundry.

So when we work with a potential customer on a project, we really start with a collaborative process. We sit down with our customers to define what are their strategic requirements. And from that, we define the specific technical needs and how a foundry can actually support that.

And that's when we get kind of the early start of really figuring out what the project looks like.

Then we enter into a parallel path of the technical teams really discussing with our customers technical team on the specific requirements under what we call a technical development plan. And in that technical development plan, we'll define the deliverables, the milestones, the objectives, the timeline, etc., and the budget associated with those programs.

Great.

We bring the best in robotic and software automation together with the unique skills and insights that humans have in order to be able to program cells more effectively with a higher probability of success than would ordinarily be possible.

And at the same time, the commercial discussions also take place, and we have a cross-functional field team that really kind of drive those discussions forward, going from figuring out what the framing of the deal looks like, what the term sheet looks like, all the way to negotiating the final terms of the agreement that includes all aspects ranging from economics and intellectual property terms.

And so what you'll hear in the labs, what you'll hear in our foundries, is you'll hear relatively loud hum of equipment, of robotic arms, of instruments moving liquids back and forth. You'll hear that hum of activity that is largely consisting of robots and instruments scaling up and powering the work of our foundries.

So once we complete that negotiation process and the technical teams have a defined and approved PDP in place, we then kick off the project.

And that's where the commercial operations team really kind of takes center stage and liaise with the customer to not only implement the collaboration internally, it can go, but also to foster the communications to make sure that the collaboration is as transparent and as successful as possible.

So the deal process is not a two-week process. It takes time to make that happen. And so we have a number of deals that are moving through this deal process at any single point in time.

And we're constantly monitoring and reviewing the status of these deal negotiations as it moves through the different stages in the pipeline. And the pipeline includes deals that are ranging from very mature conversations where we're in deep discussions on the definitive agreement, all the way to early stage conversations where we just signed a CDA with a customer and trying to figure out what the projects, are that we will collaborate together and you have everything in between.

And execute really complex laboratory workflows for actually manipulating that DNA.

So during this process, as we get more and more visibility into the technical development plan and understand what our deliverables would be, we have better indication of what our revenues would look like. Because by the time the TDPs are in place, we have very good visibility into the revenues that we would expect.

And transforming it into organisms. This.