Welcome to Twist Bioscience Fiscal 20 2nd Quarter Financial Results Conference Call. At this time, all participant lines are in a listen only mode. After the speaker presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to turn the conference call over to Jim Thornburn, Chief Financial Officer.
All right. Thank you. Good afternoon, everyone. First and foremost, we hope each of you is safe and healthy wherever you are during this time. I'd like to thank all of you for joining us today for Twist Bioscience conference call to review our fiscal 2020 Q2 financial results and business progress.
We did issue our financial results earlier today, which is available at our website at www.twistbioscience.com. With me on today's call is Doctor. Emily Leprost, CEO and Co Founder of Twist. Emily will begin with a review of recent progress in Twist's businesses, and I will report on our financial and operational performance. Then Emily will discuss our upcoming milestones We will then open the call up for questions.
And 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 1 week. During today's presentation, we will make forward looking statements within the meaning of the 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 in 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 the press release we issued earlier today as well as those more fully described in 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 results, businesses 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 our Chief Executive Officer and Co Founder, Doctor. Emily Leprost.
Thank you, Jim, and good afternoon, everyone. I'd like to add my wishes that we find you safe and healthy at this time. The global pandemic has changed our lives substantially since our last Q3 in February. And at Twist, even before the state of California called for a shelter in place, we quickly transitioned the majority of our employees to working from home. We wanted to ensure that our production workers who do not have the option of working from home stay safe and healthy that we will be able to continue to deliver our products to customers, collecting important research.
Despite the challenges posed by COVID-nineteen, we reported record revenues of $19,300,000 for the Q2 of fiscal 2020, resulting from strong MGS sales, significant revenue from Ginkgo, initial revenue from biopharma collaboration as well as the addition of 2 new COVID-nineteen products. Orders for the current quarter came in strong, approximately on par with the previous quarter at $24,600,000 and resulting in a booking rate of about $50,000,000 for the 1st 6 months of fiscal 2021. For the first time, we reported a gross margins of approximately 30%, confirming that as we scale our products and revenue, building on our established infrastructure, we are able to increase our margin. Turning to specific results of Syn Bio. We shipped more than 88,000 genes during the Q2.
Also, we added 2 new writers to a month of capacity and continue reducing our turnaround time. Our Syn Bio revenue includes genes and fragments of customers who are developing vaccines and therapeutics against COVID-nineteen, so we cannot directly break that revenue out specifically at this time. We reported a total of $11,000,000 in synbio revenue, dollars 4,000,000 of TAD from Ginkgo, which has made a substantial commitment in the fight against COVID-nineteen and is facilitating substantive research. This is a very strong quarter for synbio, but we do see the shelter in place order impacting our academic customers substantially. We have launched a new campaign where customers can order DNA now as they are able to conduct the design portion of the design build test cycle from home.
And when their lab reopen, we will ship the products to them immediately. Balancing out the reduction in academic revenue, we see an escalation in orders from biotechnology and pharmaceutical companies ramping up the networks to fight COVID-nineteen through vaccine and therapeutic development. And overall, since Bayer orders remain strong at $14,100,000 as those larger customers remain open for essential research. While we are optimistic about the future, we are closely monitoring the situation as well as across our customer base and in all regions, so that we're in the best position to react to any change in market conditions. Importantly, on schedule and as planned, which was much more challenging during the pandemic.
In mid April, we announced a new product to bring larger mass of DNA to customers who need those options. This product and extended offering of our Swisscology genes is a preferred format for pharma and biotech company, and therefore, expands our pharmaceutical market. This extension of our clinical genes offering enables Truist to become more of a one stop shop for pharmaceutical and biotechnology research companies. In addition, we are looking at different market opportunity to pursue DNA makers and support growth in the long tail of the market, such as customers that need a few genes at a time rather than massive orders, and we remain on track to launch our clonal ready gene fragments in the second half of calendar 2020. Both the new preparation and the clonal ready gene fragments target 2 very different and important subsegments that we do not serve well today.
And we believe that over time, they will represent substantive areas of growth for synbio segment. For genomics and targeted MGS, at the end of the second quarter, we introduced 2 new products to facilitate COVID-nineteen testing and monitoring of viral evolution. We introduced SARS CoV-two sensitive RNA reference sequences, which can be used as positive control for development, validation and verification of diagnostic assay as well as routine testing. These reference sequences are also posted on the FDA's website within their reference materials for SARS CoV-two. We also launched a target enrichment panel for viral detection and characterization of samples for SARS CoV-two, which can be used for environmental monitoring and surveillance testing, while providing insight into full sequence information to track viral evolution and strain origin.
These new product offerings are a perfect illustration of what Twist does well. We are presented with a new challenge like this global pandemic and we look at how our core strengths can address this problem. We were able to launch this product in just a few weeks, serving our existing customer needs and of committing the emerging global concern. These products were only available for 2 weeks at the end of the quarter, and in that time, we recorded approximately $400,000 in revenue and we shipped to 271 KPI. We are grateful to be in a position where we are able to help in a global effort to combat this virus while the business remains healthy.
This is a tremendous testament to the hard work and dedication of our employees across the organization. For our overall NGS products, we reported revenues of $7,700,000 an increase of 38% year over year as well as strong orders of $9,800,000 And we had another 6 customers adopt our products this quarter for a total of 40 3. During the quarter, one of our customers published results of their liquid biopsy products, which includes our customized target enrichment panel. The data demonstrated that their technology is able to detect more than 50 types of cancers across all stages with a false positive rate of less than 1% through a single blood draw. These data from more than 15,000 participants are extremely impressive and the most robust data set on liquid biopsy to date.
As we all know, the ability to identify cancer early remains critical to effective treatment. We are thrilled to play a role in this potential pivotal shift in cancer diagnosis. More broadly, to address the large equibioxy market, we introduced a targeted mutation sequencing solution during the 2020 ADP in February. This product is ideal for customers focused on equibriopsy as it can be used to study methylation pattern changes in a wide range of research field. For those of you not familiar with methylation, the addition and subtraction of the methyl group changes which proteins are made in the cell, which in turn has deep implications for cancer, epigenetics and non evasive prenatal testing.
We are working with initial customers and believe it represents an important area of growth for NGS solutions. Turning to our vertical market opportunities. In addition to our collaboration to supply synthetic genes and antibodies for Vanderbilt, Squares Biopharma is working with them to provide custom antibody drug discovery libraries and is screening these libraries for potential antibody therapeutics that will treat patients with COVID-nineteen. And in March, as the global pandemic was gaining traction rapidly, we leveraged our robust laboratory synthetic antibody discovery laboratories, each containing more than 10,000,000,000 antibody sequences to identify antibody candidates for the treatment of SARS CoV-two. We have identified key competitive antibodies with protein binding to the receptor binding domain of the S1 protein on the SARS CoV-two virus.
In addition, we have identified a series of antibodies that bind to the extra cellular domain of ACE2 in human cells. As a reminder, ACE2 is the receptor that SARS CoV-two binds to in order to enter and co op human cells. The fact that we were able to go from publicly available reference sequences to competitive antibodies for 2 different targets in a matter of 6 weeks demonstrates the power of our biopharma platform and something that we believe we can repeat for other targets, even ones which are hard to block. Apart from our biopharma work against COVID-nineteen, we continue our discussions with a large number of potential partners. I'm very pleased to report that we have signed one partnership with a Sandisk first party, which includes milestones and royalties and look forward to announcing additional deals.
As a result, we reported $600,000 in revenue for our biopharma division this quarter. And while we expect the order and revenues to be lumpy, we look forward to seeing that number increase as we continue to derive value from this growing market opportunity despite near term uncertainty posed by the COVID-nineteen pandemic. As we generate additional data and validation for our internally generated targets, we expect to move along the spectrum towards being a value added pharma partner rather than just a reagent provider. We do expect this to take time, but we are encouraged by the progress we are seeing today. As we shared last quarter, we will not give an update on data storage due to the length of time it takes for the silicon design build test cycle.
However, we can say that we have added an additional 4 engineers to drive this important project for us. We're extremely fortunate at Swift but we have attracted and retained dedicated and resilient employees who are inspired by our mission to improve health sustainability. We have been put to the test in the last 3 months and the challenge continues. I am pleased to be the company that is rising to address the global pandemic and also serve our customers with many other important areas of research. 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. Our results for quarter 2 were strong and proved out our business model in an extremely challenging environment. Revenue was $19,300,000 and that's 42% growth year over year and 12% sequential growth from the $17,200,000 in the previous quarter. Our gross margin for the quarter was 29.7% as compared to approximately 13% in the same quarter last year and up from 20% in quarter 1.
This reflects the benefit of scaling our revenue and leveraging our fixed costs. Before I cover the detailed financials, we would like to thank all of our investors for their continued support in the last quarter as we continue to strengthen our balance sheet with approximately 190,000,000 dollars in a follow on offering plus our at the market offering. In addition, we'd like to thank our customers, suppliers, and our incredible twisters for their loyalty, dedication, and commitment during these challenging times. Our operations, R and D, logistics and supply chain teams have been adjusting to this challenging environment while launching new products aimed at combating the virus. The commercial team executed well and we booked $24,600,000 in orders in the quarter, which includes approximately $10,000,000 of orders in March, a very challenging month as many of the geographies implemented shelter in place.
Our Ginkgo business is going well with $4,000,000 of revenue in the quarter and we continue to build our broader customer base and we've built approximately 11 60 customers during the quarter and 1440 year to date. Our COVID products launched in the middle of March are doing well. In fact, it contributed approximately $400,000 in revenue. And our biopharma antibody products continue to gain traction with orders of approximately $700,000 and revenue of ks. Now I'll give you some more details on our orders in the quarter.
Just breaking down our orders to 24,600,000 dollars and for the year we've now booked almost $50,000,000 actually $49,400,000 and that's approximately 55% year over year growth over the 1st 6 months of 2019. Our Syn Bio orders, which are defined as genes, libraries, all of the pools in quarter 2 were $14,100,000 and this includes Genco orders of $3,000,000 Our genes business is doing extremely well with orders of 11,300,000 in the quarter and year to date orders of almost 21,000,000 actually 20,800,000, dollars which is 42% year over year growth, primarily from EMEA and the U. S. Markets. NGS orders, our genomics products, which I'll refer to as our NGS products, continue to perform well.
We booked approximately $9,800,000 in orders in the quarter, which brings year to date orders $21,600,000 for NGS. Although Q2 was lower than Q1, we anticipate fluctuations quarter to quarter. We received orders from 3.57 accounts in the quarter and that's up from approximately 250 in quarter 1. Even in these uncertain times, the pipeline for our largest NGS opportunities continues to scale and we're now tracking 113 customers progressing through the pilot, validation and adoption phases with 43 adopting up from 37 and a total of 17 pilot and validation. We're very encouraged by what we're seeing in these uncertain and challenging times.
Our biopharma antibody discovery products are also scaling and we continue to build the pipeline with bookings of approximately $700,000 In terms of our progress with the global expansion, EMEA is doing well with bookings of almost 9,000,000 dollars And that includes approximately $4,400,000 from NGS with solid orders across industrial biotech, academic and pharma segments in EMEA. In fact, we've almost got about 600 customers in EMEA now. APAC bookings were $1,000,000 and as we expected to be impacted by COVID, we saw a weak January, a weak February and a very strong recovery in March. Americas orders for quarter 2 were approximately $15,000,000 of which $9,000,000 was Syn Bio and $5,000,000 was NGS and biopharma was about $700,000 Please note, we provide orders not to directly translate into revenue for the following quarter, but more to provide a trend line for each product group. Additionally, in an uncertain business and economic environment like the one we are in today, it is possible that these orders will not convert into revenue.
While we feel our orders are firm, we're closely monitoring the situation to ensure we're poised to react to any changing market conditions. Now let me cover revenue. NGS product revenue for the quarter was $7,700,000 That's a 10% sequential growth and year over year growth of approximately 38%. This brings our year to date NGS revenue to $14,700,000 which is a 57% growth in last year. As noted, we continue to expand our customer base and shift to approximately 340 customers versus 190 in the previous quarter.
Our synbio product revenue was $11,000,000 up from approximately $10,000,000 in the Q1. And for the 1st 6 months of our fiscal 2020, synbio revenue grew to $21,000,000 compared to $15,700,000 in the same period of fiscal 2019, which is about 33% year over year growth. Our jeans business continues to do very well with quarter revenue of 9,100,000 dollars This is 50% growth year over year and 16% sequential growth. Although March was challenging for us all, we shipped 32,000 genes in a month and for the quarter we shipped 88,000 genes, up from 80,000 in previous quarter. And it's worth noting that longer genes accounted for approximately 50% of our revenue gene revenue in the quarter.
Our biopharma antibody product revenue was $600,000 for the quarter and we continue to make progress in building the pipeline. I'll quickly touch on the geographies. EMEA revenue is $6,000,000 and that brings EMEA revenue to first half to $12,000,000 compared to just under $6,000,000 in the same period last year. APAC revenue for the quarter, 2nd quarter declined as expected to $900,000 and that's compared to $900,000 and that's compared to $1,200,000 in the first quarter. It's worth noting that APAC revenue for the first half of this year is double what it was last year, I.
E. 2,200,000 dollars for the first half of twenty nineteen twenty twenty versus the $1,100,000 for the first half of twenty nineteen. In terms of segment revenue, our largest segments were Industrial Chemicals, dollars 7,500,000 followed by Healthcare at $5,800,000 Academic at $5,500,000 Now moving down to P and L, gross margins continue to grow as we scale their business and very excited to announce we actually hit the 29.7% or nearly 30 percent gross margin in quarter 2. And that includes about $300,000 in stock based comp for the quarter and approximately $100,000 in shelter in place compensation for our operations employees. Our operating expense, excluding the cost of revenue for the Q2, increased to approximately $37,800,000 compared to $36,900,000 in the first quarter.
R and D was 10 point $6,000,000 compared to $10,300,000 in the Q1. SG and A increased to $27,200,000 in the 2nd quarter, reflecting additional commercial costs, mainly marketing and stock based comp of $600,000 Our net loss for the 2nd quarter was $31,800,000 In summary, the quarter ended with $230,000,000 in cash. We've proven out our business model, strong revenue growth, gross margin nearly 30 percent and we're focused on growing aggressively. However, due to the evolving environment, we believe it is prudent to withdraw our fiscal 2020 financial guidance. And with that, I will now turn the call back over to Emily.
Thank you, Jim. As Jim said, we had a strong first half. And now we are monitoring business conditions and the impact of COVID-nineteen on our customers. While COVID-nineteen has impacted our business, it has neither been a bust nor a boon to our operations. We see a positive impact of COVID-nineteen in the resilience of our employees and our new and innovative products to meet market needs.
Overall, others remain strong. Our team continues to innovate in a challenging environment, and we continue to execute our business plan. Looking ahead for Finbio, we expect continued revenue growth and diversification of customers. We expect to expand our offering for both pharmaceutical companies and for the long market. For NGS, we expect to build our customer base by offering new products that expand our infectious disease offering over time.
We remain focused on pursuing new market opportunities, including liquid biopsy and immuno-three organizations currently using snake macrophores. For biopharma, we expect to continue to advance our internally generated competitive antibody candidates and sign additional revenue generating partnerships. We remain on track to sign between 510 collaborations, some of which will include both milestones and realties. With that, let's open the call for questions. Operator?
Thank you. And our first question will come from the line of Doug Schenkel from Cowen. You may begin.
Hey, guys. This is Subbu on for Doug. It seems like things have held up for you pretty well, all things considered. And fair to assume that customer activity was most resilient amongst traditional clinical activities and in COVID related application, maybe less so in synbio customers. How has this evolved over the past few weeks?
And were there any stocking behavior late in Q2?
Jimmy, you want
to take this question?
Yes. Obviously, I can't comment on what's happened in April. All I can say is that over the last quarter, we're actually very surprised. I mean, our bookings were very strong as exited March. We had large, large orders from some of the diagnostic companies and we're shipping to them.
The overall in Asia, we saw a bounce back in China. And right now, I mean, our view is, although the business is very strong, there's a lot of uncertainty about how customers are going to ramp in the next 6 to 8 weeks as they start to come back to work. But I would say a lot of large pharma companies still working. I mean, if you take a look at Twist, we implemented shelter in place policies. The operations staff are working, R and D staff are working.
We're receiving sequences from our customers. And we thought it was prudent to pull the guidance. And at the same time, the business has been very strong performing really well, which goes back to our platform, strengthen our platform, that we're able to scale the business, we're able to innovate and launch COVID products. So we're seeing a lot of demand for the COVID products. We saw revenue of about $400,000 and we launched those products in the middle of March.
So overall, we're very encouraged by the business and the opportunity.
So along those lines, are you a key supplier of primer strokes for any big COVID diagnostic companies? And assuming that's the case, how much of a tailwind would that be in this quarter?
So if you're asking about a primer for RT PCR test, we are not. However, we are supplying our synthetic RNA control for a number of people that are developing those RT PCR test. And for the users that are running RT PCR tests in routine mode. And that's a very innovative product that we launched, like Jim said, in the second half of March with only a few weeks. But it came at the right moment.
We're the I think we're the only companies that sell the full synthetic RNA control. And so therefore, we are participating with RT PCR test. There are some people that are using sequencing, NGS sequencing. Not only to get yesno answer, but to actually sequence the full viral genome and understand how the virus is evolving. We are selling a kit to do that.
And so some people are using our kit for NGS at this time. I think the NGS portion is not as prevalent as an RT PCR, mostly because NGS takes a bit more time. But I think over time, there'll be a need to track how the virus is evolving from months to months, from regions to regions, because the virus evolution may inform the types of vaccines that will work, the types of antibodies that will work, the types of primers that are needed for RT PCR test. It may even inform how fast people can get out of shelter in place and if people have to go back in.
Got it. That's helpful. And it is pretty commendable that you have successfully launched a number of COVID related products and you're helping the wider community and I truly appreciate that. My next question was on gross margin. They were great this quarter.
Any one time dynamics that we should be mindful of and how should we So any color you provide would be helpful. And I have one follow-up and that was the last one, I promise.
Obviously, comments in the future. All I can say is we've over the last year and a half, we've talked about the leverage in our business model. And it's really satisfying to see in this last quarter that on $19,300,000 revenue, our gross margin is approximately 30%, which is consistent with our long term discussions on where the business is going, I. E, the higher the revenue, we're going to leverage our fixed costs. We brought 2 new synthesizers on the quarter that allowed us to really scale the business and we delivered steps to 2,000 genes in the last month and we're going to bring another 2 synthesizers on in the course of the next 4, 5 months.
I mean, our goal is to position ourselves to be very strong for next year. And I think if we go back to the model, dollars 19,300,000 revenue, 30% gross margin, I mean that's almost 100% fall through in terms of revenue from the previous quarter. There wasn't a huge mix change. NGS business and the gene margins come in as we expected, and it's good to deliver 30% gross margin.
Got it. A patent was issued as recent as I think day before yesterday related to de novo synthesized gene libraries. Any color you could provide on the issued claims? And more specifically, is this patent in itself provides any material competitive moat?
Yes. I mean, we continue to invest in our patent portfolio. We strongly believe in patent as one of the modes that we have. Our software that enables custom synthesis, our innovation spirit, are also other modes such that if you want to compete with Twist because we are moving, you don't want to compete where we are today, but you'll have to compete where we are going to be in 3 years. And so that this particular patent is quite broad and it's 1 more in our protection.
And I think there was more than one coming out this year. So there was 4 coming yesterday.
Got it. Thank you, guys.
Yes. I mean, we have 180 patents pending. So we've been the team's been very, very innovative and we've been very focused on building the patent portfolio to protect our position. And with a lot of innovative engineers, and
we're going to
keep building our patent portfolio.
And our next question will come from the line of Luft Serghet from Evercore ISI. You may begin. Thanks for taking the questions. Starting off on
the biopharma customer that you guys signed with the $600,000,000 or $600,000 in revenues. How much of the $600,000 was from that news sign? Or was this part of it come from the existing biopharma customers?
It comes from the Gosing Biopharma customers. We have had about I think it was 4 roughly about 4, 5 that we had recognized revenue on this last quarter. We keep building the portfolio, obviously, don't release names, but we get some exciting opportunities in the pipeline.
Yes. That's helpful. I'll come back to that one. I just want to get into the COVID antibodies before it slips my mind. So the 2 antibodies that you talked about yesterday and everybody got really excited about it and either used for diagnostic use or in an antigen testing mode or used for maybe even a therapeutic, can you give us an update on where you are in the development stage?
What kind of partners are you looking for partners? And how far along is that project? And when can we expect some type of benefit?
Thank you. Look for the question. We're quite excited about the development. And so we actually started late. We started end of March into the foray against COVID-nineteen when we thought it was becoming a big issue for the country.
As you know, we have libraries that are human derived and that are fully human. And what that means is that coupled with our high throughput synthesis and high throughput screening abilities, In just 6 weeks, we were able to find very strong binders, nanomolar, picomolar, range against 2 targets. 1 is the S1 protein of the coronavirus itself as well as antibodies against the human receptor ACE2. And so it kind of shows the platform that what we can do is very quickly discover a strong binder. And again, because it's human derived and fully human, those should be held well in the clinic.
And so now we are at the point where we have leads. And I should say that it's we have dozens of leads in each category. It's not just one antibody of each. We have many antibodies. And so we are open for business, either for people that want to license it and move it on their own or partner with us.
The and in the area of either research or diagnostic or therapeutics and we are in discussion with a number of groups. And then ourselves, we will also do a bit more characterization. For instance, we don't yet have the results of virus neutralization assay. We know it binds well. We know it competes with its natural ligand, but we don't have yet the virus neutralization data, which we'll seek.
So achieving that in 6 weeks is just great. I should say I should add that the coronavirus is not particularly the hard to drug target. And so our platform is especially strong for hard to drug where we have a huge advantage over others. In a case like this where other platform can also discover antibody, our advantage are twofold. One is that it's very quick.
So we are faster, we think, than others. And then second is, again, it's a human derived and fully human sequences that comes out of the pipeline. Does that answer your question?
Yes, it does. It's helpful. And I guess we can look for that at the neutralization data coming out in the next couple of weeks just to keep you guys moving forward?
Yes. I think it's in the June timeframe.
Okay. That's helpful.
And then so I mean on the in terms of the NGS side, you guys added 6 more customers in production. And can you give us a sense of the applications here, any of the regions change? And then I guess another offshoot of that would be with BGI. And can you give us a sense of how the orders and the revenue trended from BGI as corona shut down and through China and then came back online? Just to give us a sense of how we could think about how it could return here.
I can't talk specifically about BGI. I can share with you what happened in overall EHF, particularly in China. Order patterns were very weak our orders were very weak in January and February. We saw great bounce back in March. And overall, in terms of, yes, we expanded the pipeline.
We saw a number of additional customers coming from Asia actually. And we saw a number of additional customers coming from the U. S. In fact, it's across all regions, but it's mostly biased towards Asia. We've got some very interesting developments here in the U.
S. That can go into. But what's very encouraging is the pipeline continues to build. We're adding more adopted. And of those that have adopted, the revenue and first half for the customer adopted was roughly about $8,000,000 So we're tracking in terms of the growth.
And obviously, as we scale the revenue with MGS as well, you see our gross margin came to approximately 30% in the quarter.
Okay. That's helpful. Thanks. And I'll follow-up offline on the continued biopharma partnerships. Thanks again.
Thank you. And our next question will come from the line of Tycho Peterson from JPMorgan.
You may begin.
Hey, this is Eleni on for Tycho. Thanks for taking our questions. So firstly, in light of the pandemic and just thinking about the possible impact to conversion of your order book or backlog, wondering if you could talk a little about how the backlog looks today, the current mix and which pieces may be quicker to burn and which may lag?
First of all, thanks for the question. Yes, the backlog, we come into this quarter with strong backlog, which is extremely encouraging for us. We're seeing in terms of the business, we're seeing strong demand from larger customers. So pharma, large diagnostic on NGS. And where we're seeing weakness tends to be academic and some of the smaller
customers, although the volume
of orders has gone down. And the smaller customers, that's been sort of offset by strong broad demand from the larger customers. And obviously, I mean, we're going to continue to evaluate this over the next 6, 12, 15 weeks. It is very difficult to predict how other how customers are going to reengage in terms of production. We go through the design, test, build cycle.
So even though a lot of the designers, a lot of our customers, R and D teams are at home, they are actually still designing and sending in sequences. And at the end of last quarter, we did have some customers who actually put us on hold because they'd shut down their operations and that was about 400 ks or 500 ks if I recall in terms of product that's still shipping and sitting on our shelves at the end of the quarter. So we're very encouraged because we had a lot of customers, a lot of large customers that placed orders in March time period, very strong backlog coming into this quarter. However, really uncertain about how they're going to ramp back up in terms of production over the next 3, 4 months.
That's helpful. And then just getting into some of the trends from the academic end market, just wondering sort of you've already given some color, but what you've seen so far and if you can talk about April and can you also remind us of your exposure to academic customers?
Yes. Academic customers is about 25% of our revenue. I can't share what's going on in April. I can only say again that the end of March is very, very strong. We're encouraged with what we've seen.
I think in terms of academic, it's really broad. Some may describe, I mean Emily, maybe you can jump in here, but we would class Vanderbilt as part of that. And we've seen ourselves in terms of you've seen the public release on Vanderbilt, we've built a lot of interesting programs in the pipeline, particularly on the COVID side.
What I can add is, I think like Jim really said it perfectly, which is in academic, you may have big projects and those big projects by and large seems to be going forward. And then we also have a lot of very small orders. And those are affected significantly, but they are a small fraction of our revenue base. So the number of orders may be done, but the dollar from others is not as effective because we at the end of the day, we don't have a lot of exposure from those from the long tail yet. And the long tail is what we want to get to in the future because it's a big number.
But because we have not yet done a lot of penetration in the long tail, we are somewhat less exposed. And what we saw this quarter is the launch of our Posit Control and COVID products, it's somewhat balanced the outcome.
Yes. Can I just add a couple of comments? I mean, what was interesting for us is we quickly adopted shelter in place. We have tremendous team in operations, supply, logistics and R and D. And what we did at the end of last quarter was we actually tracked shipments from the 15th March to the end of the quarter because all we were concerned about was disruption in the supply chain.
And destination. And we're very vigorously looking at making sure we continue to monitor our supply chain. We did increase our inventory at the end of the quarter. We do have a lot of raw materials in place. We've built that over time strategically.
So and combined with the great work our logistics and operations team done, we managed to deliver all the products to the customers they wanted in time. So we're from an operational point of view and market point of view, we're feeling that we're in a strong position.
That's helpful. And then lastly, just going back to the COVID antibodies, just wondering if you could help us frame the diagnostic and therapeutic opportunity here. Could you be partnering with several different bodies? Or how should we be thinking about the potential opportunities? Thank you.
So we have multiple antibodies with strong binding affinity, strong competitive affinity against the natural ligand. So we have multiple shots on goals. I think we those we look for partnerships that could or could not be exclusive. And we will see if we ultimately end up into something goes broadly from a diagnostic or phagmatic point of view. However, even if it does not, the fact that we are able to generate such great antibodies so quickly is data that we add to our data package.
And that data package is what we need to generate more business in general. And so at the minimum, we are getting fantastic data that we can leverage for our marketing purposes. And in addition, we have multiple short term goal to participate in a diagnostic or therapeutic application and potentially participate in the upside.
Thank you. And one last one. Here, I see that you're planning to scale up those compounds for in vitro functional testing. Just wondering how your supply chain looks like and if you've seen any disruption this quarter? Thanks.
Do you mean for the biopharma antibodies?
Yes.
Yes. No, I think like Jim said, we were one of we were early in sheltering in place. We actually moved to working from home before there was a mandate from California. And so we anticipated that there could be disruption and our supply chain team again really proactive in making sure that we had all the supplies that we need. So at this point, we are not seeing any issue in supply chain, either for the biopharma or actually of the business broadly.
Great. Thank you.
Thank you. And our next question will come from the line of Catherine Schulte from Baird. You may begin. Hey, guys.
This is actually Tom on for Catherine. Fair amount of my questions have been covered already. Just want fiscal year. I think you had mentioned that earlier in the call.
Yes, that's right. And we're really excited that this quarter we reported our first royalty and milestone bearing contract. It's with an unnamed party at this time. But over time, there there probably would be a public release of who they are when that partner is ready. So now we have proof point that we can get milestones and royalty based on the data package that we've had so far.
As I mentioned, data package is only enhanced by our work on COVID-nineteen. And so we may get more partnerships around COVID-nineteen. But even outside of the COVID-nineteen fight, we are still on track for 5 to 10 contract and partnership this year. Again, some of them some more of them will have milestones and royalty in addition to the one we already
disclosed. Great. That's great color. And then on some of the COVID work you had done around vaccines and therapeutics kind of pre the antibody announcement, things like de novo or Vanderbilt, I was just kind of curious if you could speak to some of the structure on these partnerships, anything around time frames or monetization? Just wanted to get your sense or get a sense of how set and sound these things are?
So when we started Twist, initially we were only a vendor where I would say it's a great business. Someone comes to us, they have a sequence, we make it, we give the DNA to them and we get paid. And that's where our synbio and NGS market, or business started. And so there is a number of customers that are now in the fight against COVID-nineteen that needs access to DNA. So you mentioned Vanderbilt, COVID, Gingko is another one that's public and there are others.
And they come to us, they purchase and we are vendors today. In addition, we have opportunities to do some of the work and that's what our pharma team has done. And when we do some of the work, at that point, we're able to discover antibodies that then we can attempt to monetize for higher economic return. Some of those are done on our own. Some of those are done in partnership with Vanderbilt.
And so if we do some work, we have an opportunity to get potential enhanced monetization. And if we are a vendor, that's the nature of the business model where it's an exchange of payment for a reagent. And so now that we are that we have a pharma business on top of our core business, we have the ability to participate in some upside potential, which we did not have earlier in the development of Twist as a company.
Great. Thanks. And thanks again for all you guys who have done in the COVID fight. Thanks.
Thank you.
Thank you. And I'm not showing any questions at this time.
Thank you, Victor, and thank you all for joining us today. As you heard from our remarks and from the Q and A, Twist had a very strong first half. We are open for business and we continue to innovate and execute. This last quarter has provided all of the twisters with an important opportunity to do well by doing good and we remain committed to continuing to doing so moving forward no matter the uncertainty or challenges placed in our path. We wish you all well and hope you remain safe and healthy in the days months ahead.
Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.