NEW YORK – Ginkgo Bioworks is making investments in artificial intelligence and has closed on several new acquisitions aimed at bolstering future growth opportunities, CEO Jason Kelly said on a conference call with investors and analysts following the release of the firm's fourth quarter and full-year 2023 financial results.
Revenues were down for both periods. For the three months ended Dec. 31, Ginkgo reported $35 million in revenues, down 65 percent from $98.3 million in Q4 2022 and missing the consensus Wall Street estimate of $42.5 million. The decrease was driven by the expected ramp down of K-12 COVID-19 testing and equity milestones in cell engineering that did not recur in 2023.
The firm has already begun assessing its spending to look for cuts, CFO Mark Dmytruk said on the call; however, it plans to continue to invest in AI and machine learning, along with expanding its pharmaceutical business development and mammalian cell engineering platform. Part of those investments include the three acquisitions announced earlier this week of Patch Biosciences, Proof Diagnostics, and Reverie.
"Patch is going to bring in large datasets ready to deploy, animal models, and downstream assays for promoter and RNA stability and expression," Kelly said on the call. "We do a lot of work in RNA right now, so that's very exciting and a pretty good fit."
Proof, a firm offering RNA-programmable nucleases, will bolster Ginkgo's microbiology and genome editing capabilities. "Importantly, it's also a great data asset," he said. "Lastly, Reverie is an AI company focused on leveraging computational chemistry and machine learning to accelerate drug discovery programs."
Kelly added that he was excited about the teams associated with those companies that would be joining Ginkgo. "It's a real speed up in terms of our human capital," he said. Ginkgo will be issuing restricted stock grants worth $4.3 million to eight Patch Bio employees and $3.5 million to four Reverie employees.
"Biopharma customers repeatedly tell us what they care about is increasing probability of success, reducing the time to results, and reducing R&D costs," he said. "Large AI models and big datasets in the hands of the scientists, at our customers, we think, can really increase the odds of success in drug development."
AI capabilities will be more important as Ginkgo aims to increase the amount of data generated with automation. Kelly noted that the firm is building "Biofab1," a new facility the firm plans to open in Boston in 2025. It will house modular automated labs, and he compared it to a digital data center. "That's very much what we're doing here, except instead of a bunch of servers, what we're going to have is a bunch of [reconfigurable automation carts]," a modular lab technology acquired by Ginkgo through its Zymergen deal.
The Boston-based synthetic biology and biosecurity firm said it started 78 new cell engineering programs in 2023, below previously issued guidance of 80 to 85 new programs, compared to 59 in 2022.
Cell engineering revenues were $27.0 million, down nearly 50 percent from $53.3 million a year ago, attributable to lower downstream value share. Cell engineering service revenues were also down year over year, Dmytruk told investors. Biosecurity service revenues were $7.8 million, down 76 percent from $32.6 million a year ago, while Ginkgo did not record any biosecurity product revenues compared to $12.4 million in Q4 2022.
Ginkgo's net loss for the quarter totaled $211.7 million, or $.11 per share, compared to a loss of $175.5 million, or $.10 per share, in the prior-year period, missing the consensus Wall Street estimate of a $.10 loss per share.
Its R&D expenses for the quarter were $117 million, down 34 percent from $177.5 million in Q4 2022, while G&A expenses fell 27 percent to $89.2 million from $121.4 million a year ago.
Ginkgo's full-year revenues of $251.5 million, down 47 percent from $477.7 million in the prior year, were in line with preliminary results announced in January but missed the consensus estimate of $258.7 million.
Cell engineering revenues for the year were $143.5 million, nearly flat compared to $143.7 million last year, though cell engineering services were $139 million, up 31 percent over the prior year. Biosecurity services revenues were $79.0 million, down 74 percent from $298.6 million in 2022, while biosecurity product revenues were $28.9 million, down 19 percent from $35.5 million.
Ginkgo Bioworks' net loss for 2023 totaled $892.9 million, or $.46 per share, compared to a loss of $2.1 billion, or $1.25 per share, in 2022, missing the consensus Wall Street estimate of a $.44 loss per share.
As of Dec. 31, Ginkgo had $944.1 million in cash and cash equivalents.
For full-year 2024, Ginkgo expects total revenue in the range of $215 million to $235 million, with cell engineering revenue in the range of $165 million to $185 million and biosecurity revenue of at least $50 million. Ginkgo also expects to add 100 to 120 new cell programs in 2024.
In Friday morning trading on the New York Stock Exchange, shares of Ginkgo Bioworks were down 11 percent at $1.36.