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BTIG Initiates Coverage of Ginkgo Bioworks With Buy Rating

NEW YORK – Investment bank BTIG on Friday initiated coverage of synthetic biology company Ginkgo Bioworks with a Buy rating and a price target of $12 on its shares.

BTIG believes that Ginkgo's cell programming platform will enable less expensive and more sustainable nucleic acid vaccines, antibiotics, and cell and gene therapies. Beyond pharma, BTIG expects Ginkgo to be able to increase global food availability and crop yields, help grow fermented cannabis, and produce materials and chemicals more sustainably.

Ginkgo's revenues come from usage fees for its Foundry lab and from royalties paid on sales of its customers' products, milestones, or equity stakes used to capture downstream value.

Foundry is a biology lab with custom software, robotic automation, data science, and analytics. In addition to Foundry, Ginkgo maintains a proprietary genetic database called Codebase, which contains 440 million proprietary gene sequences and over 3.4 billion unique gene sequences pulled from public databases.

BTIG estimates that by spreading its services across diverse industries, Ginkgo will have access to a total addressable market for bioengineered products that global consultancy McKinsey expects to grow to $2 trillion-$4 trillion annually by 2040.

Ginkgo currently runs over 70 major cell programs, including a novel antibiotic discovery cell program with Roche, a cell-based nitrogen fertilizers production program with Bayer Crop Science, a cannabinoid production partnership with Cronos Group, and an animal-free protein food products cell program with Motif FoodWorks.

Ginkgo was founded by five MIT scientists including Tom Knight in 2009, following Knight's earlier work on BioBricks, a standardized way to combine interchangeable segments of DNA.