SAN FRANCISCO (GenomeWeb) – Twist Bioscience said this week that it plans to open a manufacturing facility in China to help grow its business in the Asia-Pacific region. The San Francisco, California-based company focuses on synthetic biology but earlier this year also entered into the next-generation sequencing sample prep space with kits for exome and custom target enrichment.
During the firm's first conference call to discuss its quarterly earnings since going public in October, Twist CEO Emily Leproust said that the company recognized record revenues in both the fourth quarter of fiscal year 2018 and the entire fiscal year and was poised to continue that momentum in 2019. In particular, she noted that the firm's NGS sample prep products have done very well. To further expand this market, as well as its synthetic biology business, Twist plans to open a wholly-owned production facility in China.
The plant will help serve the Chinese market and will also protect Twist from potential tariffs, Leproust said. The company plans to determine the location of the facility in the current quarter and expects it to become operational in 2019. She noted, however, that in order to protect its IP, Twist would only move part of the technology to China.
While Twist's core business has been in the synthetic biology space, using technology it has developed that involves a silicon chip to synthesize DNA, it has also leveraged this technology to move into other markets, including NGS, drug discovery, and DNA data storage.
On the NGS side, Twist has not disclosed details of its sample prep products. Leproust previously noted that its technology, while based on hybridization capture of targeted DNA, is different from others in that it uses double-stranded rather than single-stranded DNA probes. It is also able to amplify pools of oligos more uniformly, which enables customers to do less sequencing, thus saving money.
On the conference call, Leproust said she expects the NGS business to grow significantly in 2019 as a number of customers that are currently testing its products in pilot and validation studies will convert to production-scale customers.
Jim Thorburn, Twist's CFO, said during the call that the firm has about 10 NGS customers that are using the targeted NGS kits regularly in production, as well as 20-odd customers who are in validation stages and around 22 customers in early-stage discussions or pilot studies. The firm expects the majority of these customers to eventually convert to production users, and Leproust noted that none of the customers who have tested Twist's NGS sample prep products thus far have ultimately opted for a competitor's technology.
Sometimes, there is a significant delay between a customer testing the product and scaling up, but that is mainly due to the customer already having a workflow validated that uses a different product. In some cases, the "cost of revalidating [a workflow] is too high compared to the sequencing savings that we provide," she said. But users who tested Twist's products on new assays they are developing have all ultimately chosen the Twist technology, she said.
Thorburn added that there is particularly strong growth potential for its NGS business in both Europe and Asia and that Twist's new facility in China would help drive NGS growth there.
Twist also launched two new business initiatives this year. One is the Twist Biopharma business, which will seek to leverage the firm's technology to get into the biologics and drug discovery market. "The measure of success will be the completion of a partnership deal or out-licensing of assets, which will enable us to participate in the long-term economic value of drug discovery and development without the large deployment of our own capital," Leproust said.
The second business initiative Twist is exploring is the use of DNA to store "cold data," or data that is not read often, Leproust said. The firm has forged partnerships with Microsoft and the University of Washington in this area and is working with them on projects such as the Arch Mission to encode photos into DNA that will be sent to the Moon.
Leproust noted that although data storage in DNA has good long-term benefits, its costs are still too high for routine use. However, Twist's use of a silicon chip to synthesize DNA has the potential to lower the cost and the company is currently investing in its DNA writing platform to increase its density and move from being able to store megabytes to terabytes of data. The firm is currently working with UW researchers and is pursuing a grant to help fund its efforts to make DNA data storage commercially viable.