SOUTH SAN FRANCISCO, Calif. - Twist Bioscience (NASDAQ:TWST) Corporation (NASDAQ: TWST), a synthetic DNA company, has announced a new financial agreement with XOMA Royalty Corporation (NASDAQ: XOMA). The deal, which involves a $15 million upfront cash payment to Twist, grants XOMA the right to receive half of the potential future milestone and royalty payments from Twist's existing antibody discovery and biopharma services collaborations.
The agreement does not affect Twist's current revenue from upfront payments, services, or other earnings from these collaborations, nor does it include any future biopharma collaborations that may involve milestone and royalty payments. Revenue streams from synthetic biology (synbio), next-generation sequencing (NGS), or data storage are also not part of this agreement.
Emily M. Leproust, Ph.D., CEO and cofounder of Twist Bioscience, expressed that the capital will contribute to the company's balance sheet and support ongoing innovation for profitable growth. Brad Sitko, chief investment officer of XOMA Royalty, highlighted the partnership's alignment with their strategy to support promising biotech ventures and share in their success.
Twist Bioscience specializes in manufacturing synthetic DNA and has developed a proprietary technology that writes DNA on a silicon chip. This technology is utilized in a broad range of products for various industries, including healthcare, industrial chemicals, agriculture, and academic research. The company's long-term goals include digital data storage in DNA and biologics drug discovery.
This financial move is based on a press release statement and involves forward-looking statements that carry risks and uncertainties, which could cause actual results to differ materially from expectations. These risks include the company's ability to achieve expected benefits from its restructuring activities, market competition, customer retention, and the protection of its proprietary technologies.
Investors and interested parties are reminded that the information is based on statements from Twist Bioscience and that the company's actual future results may vary due to a range of factors.
In other recent news, Twist Bioscience reported a significant 28% year-over-year increase in revenue for the fiscal third quarter of 2024, totaling $81.5 million. The company's gross margin also improved to 43.3%, with an aim to exceed 50% by the end of fiscal 2025. Projected Q4 revenue for the company is estimated to be between $82 million and $83 million, indicating a 27% expected increase in total revenue for fiscal 2024.
Baird has maintained its Outperform rating on Twist Bioscience, citing consistent demand for the company's Express Genes service. The firm noted that the average premium charged to academic institutions remained stable at approximately 42% in October, slightly down from around 43% in September.
In personnel updates, James Thorburn transitioned to a Strategic Advisor role, providing consulting services at $25,000 per month. Additionally, Mike Fero, Ph.D., was appointed as the new Chief Information Officer, leveraging his three decades of experience in startups, software development, and deep-tech industries.
Twist Bioscience also expanded its DNA synthesis capabilities, now offering gene fragments up to 5.0 kilobases in length. In collaboration with bitBiome Inc., the company launched a Transaminase Enzyme Screening Kit, providing a more environmentally friendly alternative for synthesizing chiral amines, key components in drug manufacturing. These are the latest developments in the company's operations and strategic initiatives.
InvestingPro Insights
Twist Bioscience's recent financial agreement with XOMA Royalty Corporation comes at a time when the company is experiencing significant growth and volatility. According to InvestingPro data, Twist has seen a remarkable 170.75% price total return over the past year, with a 53.99% increase in the last six months alone. This surge aligns with the company's focus on innovation and growth, as mentioned by CEO Emily M. Leproust.
Despite the impressive stock performance, InvestingPro Tips reveal that Twist Bioscience is not currently profitable, with analysts not anticipating profitability this year. This context adds importance to the $15 million upfront cash payment from XOMA, as it strengthens Twist's balance sheet during a period of expansion and development.
The company's revenue growth of 25.37% over the last twelve months, reaching $295.21 million, demonstrates Twist's expanding market presence. However, with an operating income margin of -64.34%, the company is still investing heavily in its growth and technology development, which is typical for innovative biotech firms.
InvestingPro Tips also indicate that Twist operates with a moderate level of debt and its liquid assets exceed short-term obligations. This financial positioning may provide the company with the flexibility to continue its research and development efforts in synthetic DNA and biologics drug discovery.
For investors interested in a deeper analysis, InvestingPro offers 7 additional tips for Twist Bioscience, providing a more comprehensive view of the company's financial health and market position.
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