Twist Bioscience (TWST) Goldman Sachs 45th Annual Global Healthcare Conference summary

Business overview and product innovation

• Miniaturized DNA synthesis on silicon chips enables production of 1 million DNA pieces at once, supporting diverse product lines in SynBio, NGS, drug discovery, and data storage.

• Express Genes launched, offering gene synthesis in five days for all orders, with premium pricing and strong customer uptake; 15% of Q2 gene revenue was Express.

• Continuous process improvements have doubled capacity, reduced costs, and enabled new products like 500 base pair gene fragments.

• NGS segment growth driven by high-quality DNA, customizable panels, and responsive supply chain, allowing customers to reduce sequencing per patient.

• New launches include a high-efficiency ligase, self-normalizing NGS kits, and expansion into AgBio and mRNA markets.

Competitive positioning and market dynamics

• Express Genes offers a unique advantage: 100% of genes can be delivered express, unlike competitors who can only expedite a small fraction.

• IP and software moats, plus diversified product applications, create barriers to entry and business resiliency.

• BioSecure Act and related investigations have increased awareness of supply chain security, with all manufacturing based in the US, positioning the company as a reliable partner.

• Pricing strategies vary by customer segment, with higher premiums in industry and promotions to drive academic adoption.

• Blanket purchase orders and volume commitments for Express Genes provide higher revenue visibility, though actual revenue is recognized upon shipment.

Financial performance and outlook

• Gross margin improved from 31% to 41% in one year, mainly due to revenue growth and operational leverage.

• Targeting over 50% gross margin by Q4 2025, with further gains expected from process improvements and product mix.

• Capacity expansion is now more efficient due to process improvements, allowing for growth without significant new investment.

• Blanket orders, especially in Q2, provide annual tailwinds but may introduce quarterly order volatility.

• Product development is disciplined, focusing on top opportunities with small incremental investments leveraging core technology.