Welcome to Twist Biosciences Fiscal 20 21 Third Quarter Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be
a question and answer session.
As a reminder, today's conference call is being recorded. I would now like to turn the conference over to Angela Bidding, SVP of Corporate Affairs.
Thank you, Valerie. Good morning, everyone. I would like to thank all of you for joining us today for Twist Biosciences' conference call to review our fiscal 2021 Q3 financial results and business progress. We did issue our financial results released this morning, which is available at our site at www.twistbioscience.com. With me on today's call are Doctor.
Emily LaProust, CEO and Co Founder of Twist And Jim Sorburn, CFO of Twist. Emily will begin with a review of our recent progress on Twist businesses. Jim will report on our financial and operational performance, and Emily will come back to discuss our upcoming milestones and direction. We'll then open the call for questions. As a reminder, this call is being recorded.
The audio portion will be archived in the Investors section of our website and will be available for 2 weeks. During today's presentation, we will be making forward looking statements within the meaning of the U. S. Federal securities laws. Forward looking statements generally relate to future events or future financial or operating performance.
Our expectations and beliefs regarding these matters may not materialize and actual results and financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include those set forth in our press release we issued earlier today as well as those more fully described in our financials and our filings with the Securities and Exchange Commission. The forward looking statements in this presentation are based on Information available to us as of the date hereof and we cannot at this time predict the full extent of the impact of the COVID-nineteen pandemic and any resulting business or economic impact. We disclaim any obligation to update any forward looking statements except as required by law. With that, I'll now turn the call over to Chief Executive Officer and Co Founder, Emily Leproust.
Thank you, Angela, and good morning, everyone. We continued our positive momentum into the Q3 of fiscal 2021, reporting increased revenue across our businesses And solid orders moving into our final quarter of the year. We remain focused on expanding our customer base and driving increased revenue day by day Across these businesses, while advancing our DNA data storage commercialization plans, we reported record revenue Of $35,000,000 for the quarter, an increase of 65% year over year. For the Q2 in a row, we have no single customer accounting for This again indicates broad and diversified strength across our businesses. And we reported $39,100,000 in orders.
This is an increase of 58% over the Q3 of fiscal 2020, a strong signal for the remainder of fiscal 2021, Particularly as of sorry, fiscal Q4 covers the summer months, which are slower for European customers. Zooming out a bit to put into context both our current results and our future opportunities, we continue to believe in the promise of synthetic biology, The ecosystem of companies working on diverse applications of SymBio provides not only validation of the industry today, but also offers incredible opportunity for the future. There will be setbacks within the industry and not every application of synbio will work or resonate with customers. However, Wherever the science and the commercial application go, Twist provides a sensitive DNA for the research, discovery And development as well as even production. Essentially, we provide a picks and shovel for our customers who are leading for goal.
Whether or not they find goal, we sell the tools that enable their success. There will always be a market for the peaks and troubles. Specifically for healthcare, we see our rich opportunities. At every stage of the healthcare system, from diagnosis to treatment to surveillance and prevention, synbio has a role to play. New tests are available for a wide range of inherited diseases.
We can use gene drives to eliminate Mosquito borne illnesses like malaria and dengue and gene editing can be used to treat specific diseases. Conferencingly, We can use Sensitive DNA to read a particular cancer mutation and then write DNA to deliver a personalized treatment. And this is just the tip of the iceberg of what is possible by combining sensitive biology with technology to improve healthcare. In addition to healthcare, we see our growing customer base pursuing unique applications in a wide variety of industries, including materials, chemicals, food, farming and more. We had a vision 8 years ago when we founded the company that Sensitive DNA We'll change the world, drive new industries and disrupt the existing market.
We are delivering on the promise by building a robust and dynamic business with Solid revenue growth quarter over quarter. Now to drive into our results for the Q3, starting with synbio. We reported record revenue of $14,300,000 with orders coming in at $15,700,000 We shipped 107,000 units in the quarter as we continue to expand our customer base. We are actively preparing for the opening of our factory of the future with early production expected in mid Canada 2022. As the factor of the future comes online next year, We believe it will allow us to tap into new customers who need their sensitive DNA products very quickly, An important next avenue to convert DNA makers into DNA bio.
Turning to Genomics and targeted MGS. We reported $18,700,000 in revenue. Orders were $18,600,000 for the quarter. We closed our acquisition of iGenomics, bringing multiplex library preparation tools for NGX workflow into our folder. We believe this acquisition will accelerate conversion from Smith Macquarie to Twist plus sequencing.
We're working to twistify the product and expect to relaunch it before the end of the calendar year. In addition, we launched a SNP Diversity Panel, The Regeneron design product that leverages Twist best in class V and incentive platform to cover over 1,000,000 SMEs. It can be used alone or to augment our larger exam panel. This is an important panel for Twist as it provides researcher And ethnicity neutral gold standard rather than a typical bias of 80% Western European coverage. We have taken multiple steps to mitigate the supply chain risk we discussed last quarter, including the introduction of our Antibiotic Framatation 2.0 kit.
This is an all in one solution designed to maximize accuracy and efficiency in library construction and amplification and a nice addition to our portfolio. We launched 4 new positive synthetic arm controls for new variants of COVID, including Delta and Keapaa. It's important to continuously evolve this product line in tandem with new strength. We see that our sales for controls are relatively constant over time, Though sales of the controls introduced early in the pandemic have been replaced by the new controls for the latest variant. Importantly, the emerging variants and escalating cases worldwide remind us that COVID remains a public health crisis.
This is likely to be the case for quite some time. We will need to learn to live with COVID, which requires both diagnostic tools and effective therapeutics that addresses a wide range of variants. The surge of variants, the lack of worldwide vaccination and a school age population that is not eligible for vaccines Next, surveillance is a very important tool to measure spread and evolution of the virus. For biopharma, we reported $4,800,000 in orders and $2,000,000 in revenue. This was a great quarter for biopharma.
We saw a continued increase in repeat business with many of our long standing partners. As a reminder, our biopharma revenue only include a portion of the up from all licensees associated with our partnerships as we recognize revenue over the course of each project. In addition, orders Directly convert 1 to 1 into revenue, most often in the following few quarters depending on the timeline of the project. Milestones and relatives represent additional potential financial upside and are not calculated in orders or revenue. During the quarter, we signed several new partners for our Twist antibody optimization solution that utilizes Fully human antibody sequences.
This collaboration showcase our capabilities to improve the qualities of a particular molecule. As we expand our data package with additional examples of our successful partners, we see an increased interest in this particular platform for both humanization and affinity maturation. We do not typically get milestones or royalties for these collaborations and yet we believe they are 2 critically important as an entry to larger partnerships with key pharma and biotech companies. I'm very glad to report that we now have 31 partners and 43 active programs, 26 of which have milestones and are rarotives associated with them. In addition, 19 programs are complete and now in the hands of our partners.
In addition to the partner programs, we continue to advance our internal compounds, generating additional preclinical data. Concurrently, we continue to pursue many avenues to expedite the path for our Twist Antibodies to reach Moving to data storage. We continue to make solid progress as we drive towards Commercialization working with a proof of principle chip at 1 micron pitch. We are building an integrated chip That includes both the CMOS and MEMS components needed to commercialize the product for data storage. Once the integrated chip is working, our next step is to create an integrated alpha silicon chip, miniaturizing the feature size even further.
We expect that once the Alpha Chip writes Finne consistently, this chip will support our first early access commercial offering. The target customers will be those who preserve cultural heritage as well as media and entertainment organization. The DNA Data Storage Alliance is now 34 months strong. There is an active website and the group released its First white paper on the state of DNA Data Storage in June. They meet monthly and are making great progress in educating the larger storage community on the benefits of DNA as a storage medium.
At this time, I'd like to turn the call over to Jim to review our financial results for the quarter.
All right. Thank you, Emily. As Emily noted, our results continue to demonstrate the advances we are making in executing our business strategy and investing in our Revenue for the Q3 was $35,000,000 a new record for Twist and up sequentially 12% and year over year 65%. Orders were $39,100,000 for the quarter, a sequential decline of 6% and year over year increase of 58%. Gross margin for the Q3 was 40%.
We shipped to approximately 1800 customers in the quarter and approximately 2,600 customers year to date And we ended the quarter with cash and short term investments of approximately 519,000,000 Now, I will provide more details on orders for our Q3. NGS orders for the Q3 were $18,600,000 And that's comparable to the 2nd fiscal quarter and 113% higher year on year. This reflects our larger customer base, Increasing adoption and increasing NGS applications, including liquid biopsy, diagnostics, RNA controls and other applications, clinical applications included. During the quarter, we received orders from approximately 700 NGS customers And the top 10 accounts placed orders of approximately $7,000,000 as compared to approximately $8,000,000 for the top 10 in the previous quarter and highlighting the continued diversification of our customer footprint in quarter 3. Our pipeline for larger opportunities continues to scale And we're now tracking 182 accounts, up from 170 we noted in our last earnings call, and 79 have adopted Twist, which is an increase from 65 last quarter.
Now turning to synbio. Our synbio orders, which includes clinical, Genes, DNA preps, IgG libraries and oligo pools were 15,700,000 In the Q3, up from $14,900,000 in June 2020 and down sequentially, primarily due to decline in industrial biotech orders. Now to biopharma. Biopharma orders in the quarter 3 were a record 4,800,000 as we continue to build our pipeline of customers, projects and opportunities. And as noted earlier, we now have 31 partners with 43 active programs and 26 of which have milestones and or royalties.
Please note, we provide orders not to directly translate into revenue, but to provide a trend line for each product group. Now moving from orders to revenue. As noted earlier, revenue for the quarter was $35,000,000 and brings our cumulative revenue for our 1st 3 quarters $94,400,000 which compares to $57,700,000 for the same period in FY 2020 and that's approximately 64% Year over year growth. NGS products continue to scale and climbed to $18,700,000 for the quarter as compared to $9,100,000 for the same quarter in Prior year, year over year growth has more than doubled and with sequential growth of 10%. This reflects expansion Our pipeline and increasing number of applications such as liquid biopsy scaling up.
Our synbio product revenue for the quarter was $14,300,000 and that's up sequentially from $12,900,000 last quarter, an increase from $11,800,000 in quarter 3 FY 2020. Some of the highlights include shipping to approximately 1707 bio customers In quarter 3, and that's up from $13,000,000 in the previous quarter, our Q3 jeans revenue was $11,200,000 Sequentially, up from 9,200,000 and up from 9,600,000 in quarter 3 FY 2020. We shipped a record number of genes in the quarter of approximately 107,000 and an increase from 90,000 genes shipped in quarter 2. Please note as Ginkgo is now less than 10% of our revenue, we're no longer breaking out Ginkgo activity. And this also highlights our growth and continued success in expanding our customer base.
Biopharma, Our revenue for the quarter was approximately $2,000,000 in upfront services on our antibody project activities. Now I'll briefly cover our regional progress. Our investment in building out our international commercial organization capabilities is reflected in strong international growth this quarter. EMEA had another terrific quarter with Q3 revenue of $12,700,000 versus $6,400,000 in the same period last year and now accounts for 36% of our worldwide business. APAC had a strong quarter as well.
Q3 revenue was $3,100,000 versus $1,200,000 for the same period last year. And U. S. Revenue was $19,200,000 versus $13,600,000 for the same period last year. I'll now quickly give an update on our segment revenue.
All segments showed strong growth. Healthcare is now our largest segment And accounts for approximately 50% of our business with the revenue of $17,400,000 in Q3 versus $8,500,000 in Q3 fiscal 2020. And that's reflecting strength in our NGS. Industrial Chemicals was $9,400,000 in quarter 3 as compared to 7,500,000 Q3 FY 2020. Academic revenue in Q3 2020 was 7,700,000 versus $4,600,000 in Q3 FY 2020.
We noted in the call last quarter, academic was continuing to recover or increase. Agriculture revenue was $500,000 Now moving down the P and L, our gross margin for the quarter is approximately 14,000,000 40% of revenue, up from 39% in the prior quarter and up from 22% in Q3 of fiscal 2020. Our operating expenses for the quarter, which includes R and D and SG and A was $54,200,000 R and D for the quarter was $19,800,000 as compared to $10,400,000 in the Q3 of FY 2020 $15,800,000 in Quarter 2 of FY 2021. Over the last year, we have invested in our R and D resources and capabilities And our headcount has increased to 189 from 125 in quarter 3 of fiscal 2020. We're seeing the benefit of this investment in our product launches and our innovation.
And consequently, the major increase in spend was compensation And also outside services, primarily our data storage technology development activities. It's worth highlighting in Q3 FY 2020, This included $1,400,000 of grant reimbursement as compared to $300,000 in Q3 FY 2021, both are netted against our R and D spend. Just quickly on the sequential growth, the increase in spend was primarily compensation and the increase in outside services of $2,300,000 And that's for our data storage technology development activities. Our SG and A in quarter 3 was 34,500,000 as compared to $34,300,000 in Q2 $22,500,000 in Q3 FY 2020. Year over year, SG and A expenses increased by approximately $12,000,000 due to higher compensation of approximately $7,000,000 which includes stock based comp of approximately $2,700,000 and that's primarily associated with increased investment to build out commercial organization and the headcount is increasing at commercial organization to 195 And that's up from 161 in Q3 FY 2020.
And this includes our expansion in both Asia and EMEA. In addition, in the quarter we incurred higher outside professional services of approximately $3,000,000 due to audit and SOX fees as we've been Continuing to invest in enhancing our control environment. Also during the Q3, we hired Kevin Yankton as our Chief Accounting Officer. Kevin brings significant industry experience and depth of knowledge in technical accounting matters, and I'm thrilled to have Kevin as part of our finance team. Our loss from operations before interest and taxes for the quarter was $40,200,000 which includes stock based comp of $9,200,000 $2,700,000 depreciation.
CapEx in the quarter was approximately $7,000,000 which brings total year to date CapEx to approximately $19,000,000 And we concluded the quarter with cash and short term investments of approximately 519,000,000 As Emily highlighted, we closed our acquisition of I. Genomics in June and this reflects on our balance sheet with an additional Intangible assets of approximately $17,000,000 and the balance is goodwill offset by a deferred tax liability. In April this year, we extended the lease of our Portland facility and started to record the amortization lease payments. Total amount in the quarter was $700,000 and future quarterly expenses will be approximately $1,000,000 for lease payments. I'll provide an update to our financial guidance for fiscal 2021.
As Emily noted, we are seeing strong growth in our customer base, strong market growth, and at the same time, there remains uncertainty associated with the pandemic. And we're also approaching a time of year where we have seasonality in Europe. As noted earlier, Europe is now a larger part of our revenue. However, we are increasing our revenue guidance for the year and now expect revenue in the range of $129,000,000 to $132,000,000 This is up from our prior guidance of $121,000,000 to $129,000,000 and we're estimating quarter 4 revenue would be in the range of $35,000,000 to 37,500,000 synbio is estimated to be in the range of $54,000,000 to $56,000,000 and this comprehends ginkgo revenue. NGS revenue is estimated to be in the range of $69,000,000 to $70,000,000 and biopharma revenue is estimated to be approximately 6,000,000 Our gross margin range for the year is expected to be between 38% 40% as compared to 36% to 38% in our last guidance.
Operating expenses, which includes R and D and SG G and A are expected to be approximately $200,000,000 for the year as compared to $192,000,000 in our prior guidance And this reflects higher stock based comp charges, rental expenses for the Factory of the Future, investments in R and D and sales and marketing organizations to support growth in FY 2022 and beyond. Our R and D investment for the year is approximately $70,000,000 up from $66,000,000 due to outside services, primarily associated with data storage technology investments. Our net loss guidance for the year is expected to be approximately $150,000,000 as compared to $144,000,000 to $150,000,000 in previous guidance. Stock based comp is expected to be approximately $37,000,000 and depreciation is expected to be $10,000,000 and we anticipate CapEx to be approximately $40,000,000 for the year. In summary, we'd like to thank all Twisters for delivering another quarter of record growth, We're executing on our strategy, enjoying broad demand from our customer base, our new products are being well received, and we're investing in our platform as we continue to tap into new revenue streams.
With that, I will now turn the call back over to Emily.
Thank you, Jim. In conclusion, we continue to build our business, our customer base and revenue stream. This quarter, we have accomplished a lot, even more than envisioned at the beginning of the year in the midst of COVID-nineteen. As we move into the final quarter of our fiscal year, we expect to continue to take market share in synbio, growing more rapidly in the market while we prepare our factory of the future for production in 2022 to position us to accelerate our growth. For NGS tools, we'll continue to grow revenue and increase adoption as well as the number of large accounts we funnel into the pipeline.
In addition, we plan to relaunch the iGenome Calabrio Prep Kit to drive snipaccharide conversions moving into 2022. For Biopharma, we intend to sign additional partnerships and add programs as well as pursue opportunities to participate in the greater share of wallet and rapid clinical advancement. For DNA Data Storage, we will drive to have an alpha commercial product offering, Execute on our IRPA contract and actively advance market adoption of this new storage medium in concert with the IRM. With that, let's open up the call for questions. Operator?
Thank Our first question comes from the line of Doug Schenkel with Cowen. Your line is now open.
Good morning, everybody, and thank you for taking my question. So on Illumina's Call last night, and in talking to them, I think a little bit after the call, they talked about a lot of progress they're seeing With assay development in the industry combined with the fact that guidelines and the reimbursement environment Coming out of the pandemic, at least we hope coming out of the pandemic, is driving increased demand for sequencing Consumables within the clinical end market, especially in oncology. Based on your results in the quarter and what you talk about in terms of Backlog, it sure sounds like you're seeing the same thing in your business. I just want to make sure that's the case. And if As we think about the implied fiscal Q4 guide, would you say the bias, especially when it comes to this Part of the clinical business is to the upside?
And then by extension, how should we be thinking about momentum as we start to look ahead to fiscal 2022?
Thanks, Doug. Maybe I'll start and Jim can continue. So as a reminder, so first of all, I totally agree with what you say. We see something similar. But as a reminder, there is kind of 2 stages with when we work with customer in the clinical space.
The first stage is in the development of the asset. And so in that stage, customers work many different panels to try different content. That's where frankly we shine because we can make panels very quickly and very cost effectively. And then once the customer has finalized the content that we need, then we go into a more of a scale up, where the revenues can run. And so depending on where they are In their asset development and validation, some customers are still early in the trying different Content and some customers are more or in that more skilled version and we are seeing strength in both areas.
Jim, is there anything else you'd like to add?
Yes. So Doug, yes, it's definitely an area we're seeing strength in. If you look at the backlog of the large NGS customers we're tracking over the pipeline, we're now tracking 182. So, just look back in perspective, that's twice the number we're tracking approximately this time last year. Number of adopted means Twist has been assigned into their assay.
That's now increased to 79. I mean, as opposed to about 50 this time last year. So we're seeing momentum in the back and the pipeline. Overall, we had another strong bookings quarter. The number of larger accounts is increasing.
So all the signs are we're going to have a very we've got strong momentum building up in this area. If you look at our guidance For the year for NGS, we've upped our guidance again and we continue to have a very strong showing And we expect to continue to deliver strong growth in the NGS space. Hello?
Yes, thank you. No, that's real helpful. Thanks to both of you for all that. I mean, I think importantly, right, there's when you run through all those metrics, Jim, I mean, there's not a single thing trending in the wrong directions. And I say that not to be a cheerleader.
I say that because as I'm thinking about the outlook for fiscal 2022, There's nothing you're seeing that would suggest the building momentum is going to slow out.
And what's interesting is You look at the breadth of coverage or the breadth of adoption, it tends to increase. I mean, it has been lumpy as we've scaled for the last two quarters. I mean, the top 10 have accounted Roughly about say 40% of our orders and that's a really good sign. That shows that Number of customers increasing, the volumes they're placing is also increasing.
Okay, that's great. And then if I could ask, I guess, if I could ask or actually just really talk a little bit more about something else on the biopharma side and specifically on cell lines and antibodies. Libraries of libraries is a great capability, but there does seem to be a movement Towards increasingly sophisticated cell engineering efforts for antibody development and targeting, Is there any change in how you feel about your positioning in this context? If so, how does that impact Existing and future partnership development efforts and of course embedded in this question is Really just a question about how you're thinking about your efforts to increasingly advance internal sophistication in this context.
It'd be
great to hear about your thoughts on the competitive environment and your efforts.
Thank you, Doug. Again, I definitely agree Thank you. With your assessment of the market, the great thing around cell engineering is that you need A lot of DNA and you also need DNA, custom DNA in production. It should go to A mode where every patient gets a different engineered cell, then there is payload that needs to be made For each patient. And so what that means is that typically in synbio, we only participate in the research and development.
And typically, we don't participate in the production, because once you have the one genetic material, you can Propagated by amplification. Whereas in cell engineering, again, if every patient gets their own payload, Then we can participate in a production mode. And so at that point, we have the chance to not only do the R and D, but also be in production. So definitely, that is an opportunity for us, especially since we have a great Just on genetic material payload production system. I think that's the first thing.
The second thing I'll say is around the fact that our biopharma team is kind of like the bleeding edge of science And we sell to our customers on the scientific prowess that we have. And what that means is that as our biopharma team gets, let's say, dragged into cell engineering, There's a very great virtual circle because the Panasonic team creates a tool that Solve the customer problem. And then that tool get, I'll say, productized and scaled up And then it becomes a tool that the symbiotic team sells. And so for instance, we've seen that with IGG, High throughput LNG production, as well as initially a capability that our biopharma team develops on their own because they needed it. And then when we saw it could be applicable to many other customers, we prioritized it, scaled it up, moved it into Regular Syn Bio Production and now Twist Biopharma is a customer of the tool, even though they were the original developer of it, We can want customers and we can sell that product to many other customers.
I think something similar Could happen with cell engineering, where as our biopharma team gets involved in that business, Tools are going to get developed. And one of the great thing with Twist is really scale up, industrialize Those 2. So I think we have those 2 good things going for us. 1 is we have a great platform. And 2 is we have with Almost a applied science team that is a great developer of future tools that will drive future growth.
Okay. Thanks again. Have a great weekend. Thank you.
Thank you. Our next question comes from the line of Matt Sykes with Goldman Sachs. Your line is now open.
Hi. Good morning, Emily and Jim, Angela. For taking my questions. Kind of similar along the lines of Doug's question, just on the NGOS business. Jim, you mentioned 182 customers you're tracking and 79 adopted customers.
I was wondering if you could get any more color on the mix between existing versus new customers and what you're seeing in NGS and maybe the Frequency and quantity at which they're ordering?
Yes. So the mix In terms of new customers, don't break that out, but the mix in terms of new customers over the last year has certainly expanded. In terms of volume, I think the thing that's very encouraging for us is the pipeline keeps increasing, Also, the breadth of customer ordering keeps increasing. If you go back in maybe a year ago, it tended It'd be rather lumpy, where the top 10 was about 60% of the orders. Now the top 10 is about 40% or less.
So that's encouraging sign. The number that keep adopting increase is increasing as well. We've now got 79 of the doctor, that's up from 65 last quarter. And those assets are obviously Going into production, so as we talked about earlier, all the signs are positive. We continue to see the overall pipeline increase And the new applications such as liquid biopsy are starting to take off.
Although we don't break that out, We see a number of large liquid biopsy customers working with us, and It's certainly an exciting product for us.
Great. Thanks for that color, Jim. And then just on EMEA, you had a good quarter. It sounds like momentum is building there. Maybe any of the drivers that are driving growth in that region for EMEA?
Yes. I mean, we saw synbios doing well. What's interesting is we had a record number of Gene shipments, Gene's business doing well. In terms of Mia, we're seeing good strong NGS. We're seeing good strong synbio orders, particularly in genes with pharma, The usual suspects of large pharma in Europe, they come in with some larger orders at the end of the March quarter.
So that pickup in our revenue. What's interesting is book to bill in Syn Bio is still about 1 for this quarter. So Good encouraging sign as we enter the summer period, but we've got lots of strong momentum in the business.
Great. Thanks. Appreciate the color.
Okay. Thanks. Our next question comes from the line of Catherine Scholes with Baird. Your line is now open.
Hi, congrats on the quarter and thanks for the questions. First, last quarter you mentioned you were experiencing some headwinds with a key supplier for NGS. Have those issues been resolved? Or are they still a bit constrained?
Thank you, Catherine, for the question. We've made very good progress on that front. We have launched an additional kit that is actually an improved kit, Which enables us to move new customers to that kit. So there is very little constraint from new customers. For existing customers, we've moved some existing customers to the new kit, which relieves some of the pressure.
So we're not completely out of the woods yet, but the team has done a great job to mitigate. And And we anticipate that we will be able to get more material from our supplier to accommodate the growth More growth of existing customers. So we are cautiously optimistic, but that's definitely something that we keep A close watch on.
Okay, great. And how do you feel about your course in bio Pricing as we stand here today, is there a path to lowering price to unlock incremental demand or the potential for dynamic Pricing based on premium turnaround times?
Definitely the latter. As you know, we're making a big investment in our factory of the future in Portland. And what That does is will give us not only more capacity, but Oslo is going to give us The opportunity to add attractive features to our product, including speed. And so we believe that we will have the opportunity to I have more dynamic pricing where there's a premium component available. And our COGS, especially our COGS should be about the same.
And so there's definitely an opportunity to Improve margins for the section the segment That will get faster speed.
Okay, great. Thank you.
Thank you. Our next question comes from the line of Vijay Kumar with Evercore ISI, your line is now open.
Hey guys, thanks for taking my question. Maybe first one on The order trends here, it looks like Synbio orders were down sequentially. Is that just timing, Sequentially flattish NGS orders, I was curious, I know last year, Q4, we had some timing elements. Is there something like timing element that happened this
Order. Yes, Vijay. Yes, what's interesting is that last quarter, your point is noted on the Orders for Syn Bio, one of our industrial biotech customers orders were down sequentially. Also, at the end of the March quarter, we had a number of large orders from large pharma that Come in the end of March. So those orders didn't come in, in June, but that's just a timing issue because of where they fell at The end of March.
In terms of NGS, we continue to build on the NGS business. We are up to our revenue forecast. So we feel good about both synbio and NGS. And Although, the orders are worth talking about, the highest I would highlight that last quarter was the highest gene shipments ever, 107,000 genes. We've got a lot of momentum in genes, Number of synbio customers expanding, gene customers increased by about roughly 200.
We shipped to almost 1200 gene customers this last quarter. So we are seeing good demand From our Syn Bio customers, and it was a little bit lumpy from the March to the June quarter.
Understood. Then Jim, maybe one related on the updated guidance here. So the Q4 revenues, The headline, the optics look like it's 10% growth year on year. Now I know last year you had the Pull forward of NGS customer, I think adjusting for that, I'm getting to perhaps maybe mid-30s growth for Q4. Given we've been tracking at north of 60% growth year to date, any reason why On an underlying basis, except one off orders, growth should slow down here in Q4?
The only comment I would make is, we got a lot of momentum. Europe is now a larger part of our business, So we're going to take that into account. We do also have we're also put the impact of the pandemic. If you do go back to revenue this time last year, revenue in Q4 last year was $32,000,000 $32,400,000 Maybe take out the $9,000,000 for the Regeneron order. You can see therefore that we're down to about $23,000,000 So if you look at that versus our forecast of 35 To $57,500,000 we're up substantially.
And I mean the only calibration I would say is that we're Accommodating higher European revenue this year. We've got broader customer base, number of customers keep increasing And
we're looking
at the potential impact of seasonal implications in Europe. So I think it's just a matter of working through the summer period And the impact of the delta variant right now.
Just to clarify, Jim, the region, Ron, was that 6% or 9%, I thought for some reason I had a 6% as being above plan
Yes. So the overall Regeneron was $9,000,000 in the quarter. I'm just clarifying how much was Regeneron Last year. So 3 would have come in last year, correct, but 6 would have come in this year. So I just took it out, 2.4, Lesson 9, just to give you a frame of reference from Q4 last year to Q4 this year.
Understood. Thanks guys.
Okay. Thank you. Our next question comes from the line of Matt Larew William Blair, your line is now open.
Yes. Hi, good morning. On the Syn Bio side, number of customers up about 30%. Maybe just talk about where you're seeing most interest from new customers and maybe any of the impact from The recent launch products like DNA preps, clonal ready gene fragments, IgG, could you just get a more color there?
Yes. No, it was a strong quarter for us. Jeans, a strong business, strong had another strong quarter. Number of genes we shipped, 107,000 was a record for us. For Syn Bio, you just take a look at the orders.
Industrial Chemicals was down sequentially And that's driven by 1 large customer. But overall, Industrial Chemicals is still It's a very strong business for us. Healthcare was strong in the quarter. We saw a pickup in academic. And although Pharma was down sequentially, that was due to a number of Customers that had large orders end of the March quarter, with strong pharma quarter for Syn Bio.
So our focus on expanding customer base, targeting large pharma is working. And you can see we had record gene shipments this last quarter.
Okay. And then in terms of biopharma partners, there's a big step up. I think you said the number is 31 here. And it seems like maybe you're seeing an inflection point. So just Curious if there's anything to call out in terms of some sort of network effect or the way the product is being received in the market?
Yes, I think thanks for noticing it. A couple of things. Number 1, As we get more and more paid projects that we have completion, we have more data that we can share In an anonymized manner, and so basically we have more proof point and that definitely helps to get new business. Another point is we have built a little bit the commercial team. And so now we have boots on the ground in each Regents of U.
S, EMEA and APAC, so more people with great data.
Okay. And then speaking of data,
Sorry?
I apologize. I have cut you off there.
Yes. So we are seeing repeat business. And so in a way, you get the that's the flywheel effect of the repeat business is almost for free. And so you can compound that repeat business with new customer. And so that is the results of and that's what we see.
Okay, great. And then sorry, just the last one was asking, in terms of the white paper that was up in June in terms of DNA data storage. Just curious, if there's anybody's feedback or reaction you've gotten from customers or potential partners potential customers or potential partners?
Yes. So I think the so today's on the potential partners, The number of people, of groups, companies in the Alliance, it keeps growing. Actually, almost I'm losing track, but that means there's more and more partners available. So that's one aspect of it. We don't necessarily need partners.
We should be able to be self sufficient, But to the extent that partners accelerate, we are definitely keeping our options open. And then with the number Our partners are growing and with the white paper as a first step, There is, I think, the outcome that we are looking for is working, Which is there is more and more realization in the minds of our customers That DNA Data Storage is real. DNA Data Storage is coming. And so the growing mind share That the end of the first data storage is something to be on the lookout for. So Yes.
I think our strategy of being a leader and getting that Alliant Started is working. I expect acceleration. We're still early in the game, but I think things are definitely going to the right direction.
Thanks, Amay.
Thank you. Our last question comes from the line of Tycho Peterson with JPMorgan. Your line is now open.
Hey, thanks. I want to start with maybe a higher level question just Around the competitive environment, there's a wave of companies better than us around some are leveraging semiconductors, some are leveraging informatics, Some have a decentralized bench top approach. So as you kind of look across the landscape, can you maybe just talk about how you think about competitive dynamics? How you think about pricing going forward? To what degree maybe you're evaluating some of these technologies?
That might be helpful. And customer stickiness as well, I think is a question we tend to get a lot to.
Yes. Thank you, Tycho, for the question. I think we're In a technology company in a high-tech field. And so I think we have a healthy dose of paranoia ourselves And make sure that we don't miss anything. So from that point of view, we are definitely a Student of the market and we look very carefully.
As you pointed out, there's different ways to slice and dice. One way is centralized versus decentralized. And There is a company that's sitting now with Kodak decentralized Okay. Frankly, we never see them in the market. So I think there's plenty of fish in the water.
There's plenty of needs. And I'm sure there is a need for a decentralized approach, but we don't Pete at all impacting our customer base. Our customer base are interested in the high throughput, in the dynamic throughput And then in the low cost, another aspect is the enzymatic synthesis. And I think we've said in the past that Our technology is compatible with enzymatic synthesis if and when it's better. I think all of those methods, they'll never be cheaper.
And so I think we'll always have the cost advantage. And so we are certain to the market, but at this point, We don't see a competitive pressure and frankly, we are focused on executing what we are doing. I think it's ours to lose. We have our futures in our hand and our investment in the sector of the future It's a key one for us to fuel the growth and move us to the next stage.
Okay. That's helpful. And then thinking a little bit on the near term, we get a number of investor questions around just the COVID opportunity. I know you're launching the RNA reference controls. Are you able to Just kind of think about how you're sizing that opportunity in the near term?
Yes. So we've said that It's non material. So it's less than 10% of our revenues. But it's great revenue. We love it and it's Amazing margin.
And we keep launching RNA controls, one because it's useful To the scientists and the health care system that do testing. And Beth, what we have seen is, frankly, the revenues of our early controls have, by and large, disappeared. But the revenues from the new control have kept the momentum. And so it's a pretty stable revenue stream for us. Again, not material, but I'm very glad that we have it both for the contribution we provide and the revenues it brings.
We have other opportunities. As you know, through our antibodies, We contribute to the development of antibodies. And I think as COVID is going to be with us for a long time, I think there is opportunity for in the therapy area where there will always be people that are not vaccinated and that need Therapies and then there will always be the antibodies that are needed for testing. So we will keep pushing on the diagnostic and therapy Axies, as well as we think we have opportunity to out license some of the antibodies that we have found.
Okay. That's helpful. Lastly, maybe 2 quick ones unrelated, but I'll put them together in The iGenomics deal, can you just talk a little bit about what that brings to the NGS workflow for you guys? And then separately on the factory of the future, I'm wondering to what degree you Start to kind of pre sell some of that capacity ahead of that coming online. Thanks.
Thanks. So on iGenomics, As you know, we've put a target that we want to convert the SPIP macro market into sequencing. We think we have a unique solution there. There are proof points that it is possible Regeneron would not have moved If it was not cheaper to use NGS at the same time, so the proof point is there that it is cheaper. At the same time, we recognize that there is some buyers to switching.
1 is the content. Which content do I use? Because with Twist, it can be any snips you want, which can be a bit daunting. And so in that area, We have licensed out the regional content, which is available for sale. And then the second friction to switching It's around automation and being able to process thousands of samples a day.
As you know, the ligation based process of Doing shearing and repair on polyethyl and ligation, and it's a very heavy process to automate. With the iGenomics process, we have a PCR workflow. And so that is that makes the automation, I don't want to say trivial, but a lot easier. And so what Agemix brings us is a very easy to automate workflow that's based on PCR That should help us in that snip to microarray conversion. And then on your second comment around pre selling Of the fact that the future capacity, I'll say probably not.
We know The demand is there, but it will initially be a synbio product line. And so in that product line, people they give us a sequence, they want their DNA now. And so there's not a lot of pre setting to be done. But at the same time, it's not a let's build it and they will come. We are pretty certain that there is a demand for it.
So We're not too concerned about demand generation once the capacity is there.
Okay. Thank you. That's helpful.
Thank you.
Thank you. There are no further questions at this time. I would now turn the call back to Doctor. Emily Leproust for closing remarks.
Thank you very much. Thank you for joining us today. We are, as you know, at Twist, we are bridging the promise of synthetic biology and genomics with the reality of building an exciting business. We maintain our momentum moving into the remainder of the year. We have the team in place to foster innovation and we hold ourselves accountable to execute aggressively.
We look forward to sharing our progress with you in the months ahead. And with that, this concludes today's call. Thank you very much.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.