NEW YORK – With the Agilent litigation behind it, Twist Bioscience is focusing on growing its business, in the near term from synthetic biology and next-gen sequencing, and longer term from drug discovery and DNA data storage.
Agilent and Twist settled their 2016 intellectual property litigation on Thursday, with Twist making a one-time payment of $22.5 million. Commenting on the settlement in a call with investors to discuss Twist's fiscal Q1 financial results, Chief Legal Officer Mark Daniels said that the company was prepared to take the case all the way to trial but decided that settling was the better option, and not unusual since more than 90 percent of cases like this end in settlement.
"It was the right thing to do for the company and it was the right thing to do for our stakeholders," he said. "We look at this settlement as a victory for Twist. It eliminates uncertainty and legal expenses, there are no royalties associated with the settlement, and the legal claims were resolved."
While the majority of Twist's current revenues come from its synthetic biology and NGS businesses, which both continue to grow strongly, longer term the company sees even larger opportunities in biopharma drug discovery and DNA data storage.
To accommodate the growth of its synbio business, which received $12.3 million worth of orders in fiscal Q1, Twist plans to bring two additional DNA synthesizers online during the first half of 2020 to increase capacity, CEO Emily Leproust said during the call. In addition, the firm is devoting additional resources to "pinchpoint processes" in order to reduce order turnaround times. "While we have improved turnaround time continuously over the past two years, we continue to focus on improving this metric to stay competitive and gain additional market share," she said.
The company also remains on track to release new synbio products in mid-2020 that she said "will allow us to meet the need of large pharmaceutical companies that require large quantities of DNA." Also in 2020, Twist plans to launch clonal-ready gene primers, which she said will allow the firm to expand into sub-segments of the market it is currently not serving.
Twist's NGS target enrichment business also remains on a growth curve, increasing 86 percent year over year in fiscal Q1 and receiving $11.8 million in orders during the quarter. The company shipped products to 187 NGS customers in fiscal Q1, of whom 37 now use them in their regular production.
It also has 33 NGS specialists on its field sales team now and continues to pursue large customers in the liquid biopsy, cancer diagnostics, and rare disease space. In addition, Leproust said, it is aiming to convert customers that have been using SNP microarrays to its NGS solution. Later this month at the Advances in Genome Biology and Technology meeting, she said, Twist customers will talk about how they have used the company's products for this and other new applications.
With regards to its biopharma antibody drug discovery business, Leproust said the firm has already booked $700,000 worth of orders in fiscal Q1 and is "very excited" about its progress in this area, though it expects biopharma revenues to be lumpy from quarter to quarter.
To validate its approach and convince pharmas to work with it, the company has been generating data on antibodies targeting seven G protein-coupled receptor (GPCR) targets that are involved in a variety of disease areas, including cancer, asthma, inflammation, infertility, diabetes, and rare metabolic diseases. As an example, she pointed out TBO1-3, an antagonist of the GLP1R receptor, which has shown complete receptor inhibition in preclinical studies and in vivo efficacy in a study with glucose-tolerant mice, and which may have applications in rare disease indications, such as severe hypoglycemia.
Last month, Twist also announced a technology collaboration with Schrödinger, which offers a physics-based computational platform. "We’re bringing our two companies’ platforms together to discover new antibody therapeutics against GPCR targets and sharing any potential economics," Leproust said. "This is an excellent example of the way we may access complementary technologies to develop better therapeutics in a wide range of disease areas," she added.
As Twist generates more validation data for its approach, it expects to sign more pharma contracts that include milestone and royalty payments. "We do expect this to take some time but we’re encouraged by the progress we’re seeing so far," she said.
Regarding DNA data storage, the company's other long-term growth area, Leproust pointed to Twist's involvement in a project led by the Georgia Tech Research Institute (GTRI) that won $25 million in funding from the Intelligence Advanced Research Projects Activity (IARPA) last month.
As a subcontractor, Twist will synthesize DNA for the project and will receive up to $9.15 million. Twist and its collaborators aim to make a commercially viable DNA data storage device within three to five years, she said, adding that another $5.5 million of the contract to GTRI will benefit the commercial development at Twist. GTRI and Twist will design a CMOS chip for the new device and will work on the design and prototypes of the device.
Being part of this project "is an important step in securing financial backing for our data storage vertical, and working with these collaborators will be integral for our effort to build a commercial offering," Leproust said. She added that updates on this project will likely become less frequent as each cycle to design and build CMOS chips takes about 18 months.
Going forward, Bill Banyai, a cofounder of Twist and until recently the firm's chief operating officer, will lead the DNA data storage effort. Previously, Banyai had been vice president of hardware engineering at Complete Genomics. Patrick Weiss, formerly senior VP of R&D and general manager of data storage at Twist, has taken on the role of COO.