NEW YORK – Shares of Twist Bioscience fell 17 percent in Friday morning trading on the Nasdaq after the firm issued fiscal second-quarter revenue guidance that fell below the consensus Wall Street estimate.
The South San Francisco-based synthetic biology firm expects fiscal Q2 revenues of $56.5 million, with $24 million in synbio revenues, $25 million in next-generation sequencing revenues, and biopharma revenues of $7.5 million. Wall Street analysts, on average, had expected revenues of $61.9 million.
Twist said it also expects to reduce its fiscal year 2023 operating expenses from previously issued guidance, mainly due to a decrease in stock-based compensation expenses. The firm now anticipates R&D expenses to total $130 million, down from $138 million, and SG&A expenses to be $204 million, down from $227 million.
The announcement came as the firm reported its financial results for the first quarter of fiscal year 2023. Revenues for the three months ended Dec. 31, 2022 increased 29 percent year over year to $54.2 million from $42.0 million a year ago and beat the consensus Wall Street estimate of $54.1 million.
NGS revenues were $24.4 million, up 24 percent from $19.2 million during the year-ago quarter. On a conference call following the release of the results, Twist CEO and Cofounder Emily Leproust said that the firm does not plan to file a 510(k) application with the US Food and Drug Administration for its SARS-CoV-2 panel that received emergency use authorization. "Revenue was not material for this product," she said. "We believe the opportunity across cancer continues to grow while COVID products are decelerating."
During the Q&A portion of the call, Leproust spoke about a price increase initiated last month. "We tried to price on value," she said. "And I think there's an understanding that costs are going up, and so we were able to put in a price increase, based on the quality of our product, based on the strength of our product, which has been quite well received."
CFO Jim Thorburn added that several larger customers pushed shipments originally slated for December into January, and the firm was negatively impacted by COVID in China.
Synbio revenues, which include genes, libraries, and oligo pools, totaled $21.7 million, up 21 percent from $18 million a year ago. Revenue from genes was $16.2 million, up from $13.5 million last year, and the company shipped approximately 134,000 genes during the quarter. Oligo pools revenues were $3.7 million, Thorburn said.
Biopharma revenues were $8.2 million, up from $4.8 million a year ago. "Biopharma orders have been impacted by an overall weaker environment, and we did not see the 'pharma Christmas' in the quarter as we've seen in past years," Thornburn said.
By end market, healthcare revenues were $30 million, industrial chemicals revenues $13.6 million, and academic lab revenues were $10 million.
By region, Europe, Middle East, and Africa revenues were $16.3 million, Asia-Pacific revenues totaled $4.3 million, and revenues from the Americas were $33.6 million.
The company shipped approximately 134,000 genes during the quarter to 2,060 customers, compared to about 1,800 customers during the year-ago quarter.
For Q1, the company reported a net loss of $41.8 million, or $.74 per share, compared to a loss of $45.6 million, or $.91 per share, in Q1 of FY 2022, beating the average Wall Street estimate of a net loss of $1.13 per share. The weighted average number of shares used to compute net loss per share was 56.4 million in Q1, compared to approximately 49.9 million a year ago.
Twist's Q1 R&D expenses rose nearly 40 percent to $31.2 million from $22.6 million in the year-ago quarter, driven by increased compensation costs of $5 million. SG&A expenses fell 17 percent to $42.3 million from $51.1 million a year ago.
As of Dec. 31, 2022, the company had $316.7 million in cash and cash equivalents, and $122.0 million in short-term investments.
Full-year fiscal 2023 revenue guidance in the range of $261 million to $269 million remains unchanged. Thorburn said that net loss for the year is now expected to be $225 million, down from $260 million.
In Friday morning trading on the Nasdaq, Twist shares were down 17 percent at $25.25.