Ladies and gentlemen, thank you for standing by and welcome to the Twist Bioscience Fiscal 2020 first quarter Financial Results Conference Call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your touch-tone telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Jim Thorburn, Chief Financial Officer. Thank you, and please go ahead, sir.
All right. Thank you, Chris. Good afternoon, everyone. Thank you for joining us today for Twist Bioscience conference call to review our fiscal 2020 first quarter financial results and business progress. Please review our press releases we issued earlier today, which are available at our website, www.twistbioscience.com. With me on today's call are Dr. Emily Leproust, CEO and Co-Founder of Twist, and also Mark Daniels, Chief Legal Officer of Twist. Emily will begin with a review of recent progress in Twist businesses. Mark is available for Q&A on our litigation. I will report on our financial and operational performance. Emily will discuss our upcoming milestones and direction. We will open the call for questions. As a reminder, this call is being recorded. The audio portion will be archived in the investor section of our website and will be available for one 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 events or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize, and actual results in the 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 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, Dr. Emily Leproust.
Thank you, Jim, and good afternoon, everyone. I'd like to begin our call with an update announced this afternoon that we have reached a settlement with Agilent in the litigation originally filed on February 3rd, 2016. Under the terms of the agreement, we obtain a full release of claims made against Twist Bioscience, myself, Siyuan Chen, and Solange Glaize, in exchange for a one-time payment of $22.5 million. The settlement agreement contains no admission of liability or wrongdoing because there were none. Agilent launched an all-out legal assault on Twist, and in the end, we not only survived, but we thrived through the attack. We were prepared to take this case to trial. However, we have chosen to settle this litigation to remove the uncertainty and exceptional legal fees associated with the jury trial.
In addition, we believe it is in the best interest of all of our stakeholders that we eliminate this distraction and focus on our business at hand. With that, I'd like to turn to our financial results for the first quarter of fiscal 2020. We are off to a solid start, with $17.2 million in revenue, resulting from a larger number of orders shipping in the last days of the quarter. We reported impressive growth in Synthetic Biology and NGS revenues year-over-year. Looking forward, orders for both SynBio and NGS look very strong at almost $25 million for the first quarter, which is a yearly run rate of $100 million.
While we believe our order increase is due to exceptional products and commercial team, we also believe that we had a bit of a bump due to the end of the calendar year from companies that need to spend their budget. We saw this in the first quarter of fiscal 2019, and we saw it again in fiscal 2020. We also reported $700,000 in orders from biopharma. This is incredible growth, and we are very excited about the progress of this vertical market opportunity. I do want to caution that we expect biopharma revenues to be exceptionally lumpy moving forward and may not grow quarter-over-quarter. Our gross margin was positive, $3.4 million at 20%, essentially flat sequentially. As we have built up capacity for SynBio and NGS, we continue to invest in new product launches to fuel additional revenue growth for both businesses.
Moving to business segments, for SynBio, we shipped about 80,000 genes in the first quarter, down a bit from the fourth quarter, primarily due to holiday timing. During the first half of calendar 2020, we are bringing two new writers online, which will allow increased capacity. We're investing in additional resources at pinch point in our processes to continue to reduce our turnaround time. An important note, while we have improved turnaround time significantly over the past two years, we continue to focus on improving this metric to stay competitive and win additional market share. Continuing our pursuit of the long tail in the first quarter, in comparison to the same period last year, we received about double the number of purchase orders, which were smaller in size by about 30%, resulting in substantial revenue growth overall.
We remain on track to introduce product line extensions in mid-2020 that we believe will allow us to meet the needs of large pharmaceutical companies that require larger quantities of DNA. In addition to super growth in the long tail, we are on track to introduce in calendar 2020 our Clonal-ready gene fragments. With these products, we will be expanding into two very important sub-segments that we are not serving today. We will now pursue other markets in the near future. For genomics and targeted NGS, in the first quarter, we shipped our targeted enrichment products to 187 customers, with 37 of these customers now in production. We continue to show good growth in this market and very strong orders of $11.8 million in the first quarter. We reported revenues of $7 million, which is an increase of 86% year-over-year.
We are currently pursuing large volume customers within liquid biopsy, cancer diagnostics, and rare disease. As we discussed in December, we are now going after the SNP microarray market, which has resulted in two substantive conversions to Twist NGS. We're expanding our scope to include the research market. We expect continued product launches to serve the growing number of applications in the NGS space. I'd like to take a few minutes to talk about the novel coronavirus. This is an emerging pathogen and proof again that nature is the greatest bio-terrorist. As an emerging virus that we have never seen in humans before, there's a tremendous amount of research ongoing worldwide. Many customers have come to Twist as we offer products in key areas that enable rapid, efficient research into a potential pandemic like the new coronavirus.
We are supporting customers by making specific genes and gene mutants, by making custom NGS enrichment panels that monitor outbreak areas, and by making antibody sequences that may work as a potential treatment for those infected. These areas exemplify the reason Twist exists today. Our customers take advantage of our silicon platform, which quickly delivers genes, custom panels, and antibody fragments. We do this in a safe and secure manner, leveraging our industry-leading biosecurity platforms, protocols, and procedures. Importantly, we can support a large number of customers and do it at scale, not just for the coronavirus, but also for a wide range of diseases and conditions that need advanced diagnostics and personalized therapies. That makes us an important resource and partner, both as we face this emerging threat as a global community and as we provide synthetic DNA-based product to improve health and sustainability. A couple of important points.
We make all of our DNA in the U.S., and because of this, our manufacturing continues 24/7 with no impact to turnaround time from the coronavirus. In terms of biosecurity, we routinely screen every single gene or gene fragment sequence that is ordered, and we screen every customer against government lists and other criteria. We have put in place a very robust biosecurity protocol that flags any sequence that matches a known pathogen of concern. Because what we are doing for our customers around the coronavirus means providing a suite of products we offer regularly, we do not expect to see a significant bump in revenues from customers ordering these sequences. While we do not want to minimize the gravity of the situation, this is what we do each and every day, and the orders coming in fit within our regular workflow.
Turning to our vertical market opportunities for biopharma, we have generated data around our seven GPCR targets, and we are leveraging this data to validate our approach and book business, as evidenced by the $700,000 in biopharma orders this quarter. We reported data from TB01-3, a GPCR development candidate, at an investor conference in January. TB01-3 is a potent GLP-1R antagonist that in pre-clinical studies has shown complete inhibition of GLP-1R at higher concentrations and in vivo efficacy in a glucose tolerance mouse study. An antibody like this could have potential applications in rare disease indications such as severe hypoglycemia. In January, we announced a collaboration with Schrödinger, a company focused on transforming the way therapeutics are discovered with a physics-based computational platform. We are bringing our two companies' platforms together to discover new antibody therapeutics against GPCR targets and sharing any potential economics.
This is an excellent example of the way we may access complementary technologies to develop better therapeutics in a wide range of diseases. We expect continued collaboration opportunities across a wide range of solutions that we offer in Biopharma, some of which we expect will generate modest revenue initially. As we generate additional data and validation, we expect to move towards more robust contracts that include milestones and royalties. We do expect this to take some time, but we're encouraged by the progress we are seeing so far. Turning to data storage. In January, we announced that we were selected as the DNA synthesis provider for DNA data storage projects under the IARPA Molecular Information Storage, or MIST program.
We are collaborating with Georgia Tech Research Institute, or GTRI, Microsoft, the University of Washington, and Roswell Biotechnologies to make long-term DNA data storage accessible and commercially viable within the next three to five years. The total contract is worth $25 million, with Twist receiving up to $9.15 million. There is an additional $5.5 million of this contract that will go to GTRI, but benefit the commercial development at Twist. As part of the contract, we are designing a CMOS chip to drive a novel DNA synthesis device array. GTRI will collaborate with Twist on the device designs and will produce a prototype. The subcontract through IARPA is an important step in securing financial backing for our data storage vertical, and working with these collaborators will be integral for our efforts to build a commercial offering.
Because the next phase of data storage is highly dependent upon chip design, manufacturing, and refinement, we expect that the cadence of our updates on data storage will be less frequent as the standard chip design build cycle is 18 months. As we scale up in data storage and also for SynBio and NGS businesses, we have made some organizational changes to facilitate future growth. Bill Banyai, one of our three co-founders, will lead our DNA data storage efforts as we develop a new silicon platform specific to this market. Bill's experience in silicon is extensive, and we look forward to him leading this important vertical forward. At the same time, Patrick Rice has become COO. He built our operations from the ground up, and he will take on additional responsibilities to build the infrastructure and processes to enable our rapid growth into the future.
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. Litigation is settled, we're executing well, and we enjoyed a great quarter of sequential growth in orders and revenue. Let me touch on some of the quarterly highlights. Fiscal Q1 revenue was $17.2 million and exceeded our guidance. We booked $24.8 million in orders, which is a record for Twist. The quarter one book-to-bill ratio was approximately 1.4:1. Our Ginkgo business is doing well with $2.6 million in orders and revenue of $2.1 million. SynBio business, non-Ginkgo and NGS products are growing strongly, and we continue to build our customer base, and we shipped to approximately 1,000 customers this quarter. Biopharma orders is worth noting, as Emily highlighted, were approximately $700K. Looking at the details of orders for the first quarter, fiscal 2020, $24.8 million in orders represents year-on-year growth of 63% and sequential growth of 24%.
SynBio orders and our SynBio products are defined as genes, libraries, and oligo pools were $12.3 million for the quarter, and that includes Ginkgo orders of $2.6 million. Although Ginkgo was down from $2.8 in the fourth quarter, our Ginkgo business fluctuates based on their project activities and received orders of approximately $3.5 million in January. Our genes business is doing very well with orders of $9.5 million, and we're seeing strength in both the EMEA and the U.S. markets, primarily from industrial biotech, academic, and health segments. Our genomics products, which I'll refer to as NGS products, continue to perform very well. We booked approximately $11.8 million orders for NGS products in quarter one, which is up sequentially from $8 million in quarter four.
We received orders from 253 accounts in the quarter, and that's up from approximately 180 in quarter four, with bookings primarily from healthcare, which includes diagnostics and academic institutions such as abroad. The pipeline for our larger NGS opportunities continues to scale, and we're now tracking 91 large opportunities progressing through the pilot validation adoption phase with 37 customers adopting, and that's up from 36, and a total of 54 in the pilot and validation phases. In terms of our progress with global expansion, approximately 40% of our bookings were outside Americas. EMEA delivered another strong quarter with $7.9 million orders, including $4 million from NGS, with solid orders across industrial biotech, academic, and health segments in Europe. APAC bookings were stronger in quarter one, with $1.5 million, including bookings of $1 million from China.
America orders for quarter one were $15.4 million, of which $8 million was SynBio, $6.7 million was NGS, and thrilled to announce BioPharma at $0.7 million. Please note, we provide this not to translate to revenue for the following quarter, but more to provide a trend line for each product group. Currently, both SynBio and NGS are growing strongly. We anticipate both NGS and orders to be lumpy and fluctuate. Moving from orders to revenue, quarter one revenue was. Our NGS product revenue was $7 million, as compared to approximately $6.1 million in quarter four 2019, and $3.8 million in quarter one 2018. We continue to expand our customer base and ship almost 190 NGS customers during the quarter, as compared to approximately 152 customers in the previous quarter.
SynBio revenue was $10 million, with gene revenue $7.8 million in the quarter, and that includes $2.1 million from Ginkgo. Our gene business is doing really well. Once again, we shipped approximately 80,000 genes in the quarter, with the longer genes over 1.8 KB, accounting for over 30% of our gene revenue in the quarter. Now, let me quickly cover our global expansion. In fiscal first quarter 2020, we continued to expand our global presence and are growing strongly across all regions. The Americas first quarter revenue is approximately $10 million, as compared to $8.6 million in Q1 fiscal 2019. The Americas now accounts for approximately 60% of our revenue, as compared to 75% in Q1 of fiscal 2019, and that's due to strong growth in EMEA and APAC, and our investment in our commercial organization is paying off.
EMEA revenue was $5.9 million for the quarter, as compared to $2.4 million in Q1 fiscal 2019. APAC revenue for the first quarter totaled $1.2 million and $0.4 million, versus $0.4 million in Q1 fiscal 2019. Really strong growth outside the U.S., both EMEA and APAC doing well. In terms of segment revenue this quarter, the largest segments are industrial chemicals, accounting for $6.1 million, and healthcare, $5.8 million. Year-over-year, the two largest growth segments, healthcare and academic, are both driven by NGS and SynBio products. Moving down the P&L, gross margin. As we highlighted in our last earnings call, our gross margin is going to be 20% positive in the first quarter, and this includes about $0.4 million in stock-based compensation for the quarter.
Our operating expenses, excluding the cost of revenues and litigation settlement for the first quarter, increased to approximately $36.7 million from $34.9 million in the fourth quarter. R&D was $10.3 million compared to $10.5 million. SG&A increased to $26.4 million in the first quarter compared to $24.4 million in the fourth quarter, reflecting additional commercial costs associated with our continued investment in our commercial organization and higher litigation fees. During quarter one, we added 19 personnel to our commercial organization and have now scaled the organization to 140. We now have approximately 70 field sales personnel, with 33 supporting NGS. Our net loss, excluding litigation settlement for quarter one, was $33.1 million, up from a loss of $31.2 million in the fourth quarter, and compares to our loss guidance of $31 million-$32 million. That delta is mainly due to higher litigation fees.
Our net loss for the first quarter, including litigation settlement, was $55.6 million. In summary, the year is off to a very good start with quarter revenue of $17.2 million and $24.8 million in orders, and it's exciting to see the progress we're making. It is early in the year and we're maintaining our revenue guidance of $80 million-$84 million. Ginkgo revenue is estimated to be approximately $10 million. Non-Ginkgo SynBio is estimated to be approximately $32 million-$33 million. NGS revenue is estimated to be $37 million-$40 million, and pharma, $1 million. Our net loss guidance for the year, excluding settlement expense, is $107 million-$110 million, up from the previous guidance of $103 million-$106 million, and that's due to higher litigation expenses associated with defending and settling the case. In addition, as you saw in our press release, we accrued an additional $22.5 million for our settlement with Agilent.
Total estimated loss guidance, including litigation settlement, is $129.5 million-$132.5 million. Finally, we closed the first quarter with $103.1 million cash and strengthened our balance sheet and cash position as we completed at-the-market offering at the end of January. We issued approximately 2.24 million shares of common stock at an average price of $22.32 for a total of $48.2 million net proceeds. This positioned us well to finalize our settlement with Agilent. With that, I will turn the call back to Emily.
Thank you, Jim. As we move into 2020, we continue to innovate, execute, and respond to the market needs. First, in Bio, we expect continued revenue growth and diversification of customers. We expect to introduce new products designed to meet the needs of markets we do not currently serve today. We will continue to enhance our e-commerce experience. For NGS, we will continue our efforts to move customers through the pipeline from pilot to adoption. In parallel, we will introduce new products designed to meet the needs of those developing liquid biopsies and cancer research tools, as well as continue focus on converting organizations that currently use SNP microarray. For Biopharma, we expect to leverage the data we have generated to date on our seven functional antibodies against GPCR targets to sign revenue-generating contracts.
We announced our first collaboration in January, and we may now try to sign between five and 10 collaborations, some of which will include both milestones and royalties. For data storage, we will continue to collaborate with our project team through the MIST program to create a fully integrated commercial offering in three to five years. With that, let's open up the call for questions. Operator?
Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, please press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from the line of Luke Sergott with Evercore ISI. Your line is now open.
Hey, guys. A couple of congrats, I think, are in need. I guess, to talk about the litigation, kind of walk through why the timing is now and then deciding, because for a while, you were talking about going the full nine yards. Understandable why not. Just kind of how that shook out.
Thank you, Luke. I'll pass it to Mark Daniels, our Chief Legal Officer.
Thank you. Look, we were prepared to take this case all the way through to trial. We decided to settle. It's usual that the case settled. It was the right thing to do for the company, and it was the right thing to do for our stakeholders. 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.
Thanks. That's it. We're red-like. I guess back to the business. I'm thinking about the margin dynamics, Jim. Can you walk me through how that's going to shake out through the year? Also within the quarter, right? You guys did really well. You sold a lot of the long genes. The higher margin business like NGS continue to ramp. The margins came in a little light. Is that more from the capacity expansions and still not at utilization? Just kind of walk us through that.
Yeah. Good point, Luke. When we set up the projections for this year, we're always ramping our gross margin and targeting to grow it as we scale our revenue from roughly 20% in the fourth quarter to exiting at roughly 20% in the first quarter to roughly exiting at 40% in the fourth quarter. Yes, we're adding capacity. We're bringing some heads in slightly ahead of schedule. If you compare 40% gross margin at lower revenue, we're comfortable with the forecast $80 million-$84 million. We're comfortable with the averaged gross margin of about 32%. I think it's really incredible progress the team has made to move into our 60,000 sq ft facility here. As Emily highlighted, we are commissioning two new synthesizers, which will give us capacity as we scale through the year.
Before we get into the holidays there, we expected some of our customers to actually be shut down over the Christmas holidays. We actually shipped more than we expected, and we've seen some spike demand, and that's put a little extra cost in ahead than we expected, but we're tracking to what our internal models are looking like.
All right, great. Thanks.
Thank you. Our next question comes from the line of Catherine Schulte with Baird. Your line is now open.
Hey, guys. Congrats on the quarter and the settlement. A few questions from me. I guess first, for the new Schrödinger collaboration, what are the next steps and milestones that we should be expecting this coming year, and what's the timeline to potentially reach proof of concept in preclinical development there?
Thank you. We are not sharing details of the milestones. I think in terms of news flow on the pharma side, I think we've signed up for 5-10 collaborations. Over time, what we expect to see is growing economics of deals, and then being able to command some milestones and royalty payments per contract. I think those are the milestones to look forward to. Number of contracts, size of economics, and then milestones and royalties.
Okay. I know it's early, but any qualitative comments on how the MGI collaboration's going so far, and perhaps just your outlook for NGS uptake in Asia more broadly?
So far it's going well. As Jim mentioned, the bookings in China are growing, we anticipate that a portion of the growth that will come in the future quarters will be catalyzed by the collaboration with MGI and the co-marketing agreement we have together.
Okay, last one, I'll hop back in the queue. Any preview of what we should expect to see from you at the AGBT conference later this month?
We are a silver sponsor. I think it used to be, or the first time we went to AGBT, it was Twist standing up, saying that we had built a new product line that had substantial advantages in terms of the cost of sequencing per sample, in terms of the speed at which we could make a custom product, and improvements in the workflow. It used to be me and the Twisters spreading that story. What happened last year at AGBT, actually, our customers took the stage and validated what we had said. In a way, it was our customers that were spreading the advantages that our platform bring.
I think the preview for this year will be more of the same, of more customer testimony, not only in the market we serve today, but in the market that we want to expand into. We have a great franchise, and we've been taking market share, but we are not yet serving all of the markets. For instance, in the conversion of the SNP microarray towards NGS, we are still in early innings. We'll want to showcase how our products can be transformative into those application spaces as well.
Okay, great. Thank you.
Thank you. Our last question comes from the line of Doug Schenkel with Cowen. Your line is now open.
Hi, this is Subbu on for Doug. Congratulations. You continue to have an impressive number of customers in pilot and validating your NGS product. How big could this business get for you over the next two to three years? Could this reach like $100 million in revenue by 2022? I have a follow-up.
Well, that's a good question. We're certainly doing well in NGS. I mean, the guidance we've given for this year is between 37 and 40. We are adding more NGS resources in the field to position for ramp-up. We give a good, strong value proposition in the marketplace. Not giving guidance for the following year, but the market's growing 26%, 30% a year. BGI, PerkinElmer collaborations are going well. We're seeing good, strong positioning in Europe and good growth opportunities in Europe, so I'm personally excited about it. We've got 33 people in the field. Their quarter targets are roughly $2 million ahead, and our goal here is to accelerate on that market opportunity and optimistic about the future, but I'm not going to give guidance for over the next couple of years.
Got it. That's helpful. Some really nice momentum in pharma with $700K in orders. What does this translate into revenue, and what have you baked into guidance?
We expect all of the orders to transform into revenue over the next few quarters. We've guided revenue for the year of $1 million-$2 million for pharma. It's a great start that in the first quarter, we've already booked a substantial portion of that guidance.
Got it. Thank you, guys.
Okay. Thank you.
Thank you. This concludes today's question and answer session. I would now like to turn the call back to Emily Leproust, CEO and Co-Founder of Twist, for any closing remarks.
Thank you, Chris. Thank you, everybody, for joining us today. It's been a very eventful and positive day for Twist, and we look forward to building on our momentum to drive future growth and business success. Have a great day.
Ladies and gentlemen, today's conference concludes today. Thank you for participating. You may now disconnect.