UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
February 7, 2019
Twist Bioscience Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 001-38720 | 46-205888 | ||
| (State or other jurisdiction of | (Commission File Number) | (I. R. S. Employer | ||
| incorporation) | Identification No.) |
455 Mission Bay Boulevard South
Suite 545
San Francisco, CA 94158
(Address of principal executive offices, including ZIP code)
(800) 719-0671
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
| Item 7.01 | Results of Operations and Financial Condition. |
On February 7, 2019, Twist Bioscience Corporation (the “Company”) issued a press release announcing its financial results for the first quarter ended December 31, 2018. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit No. |
Description | |
| 99.1 | Press release dated February 7, 2019 titled “Twist Bioscience Reports First Quarter Fiscal 2019 Financial Results and Highlights Commercial and Operational Progress.” | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: February 7, 2019 | Twist Bioscience Corporation | |||
| /s/ Mark Daniels | ||||
| Mark Daniels | ||||
| Senior Vice President, Chief Legal Officer, Chief Ethics and Compliance Officer, and Secretary | ||||
Exhibit 99.1
Twist Bioscience Reports First Quarter Fiscal 2019 Financial Results and Highlights
Commercial and Operational Progress
— Reports Record Revenue of $11.5 Million for First Quarter of Fiscal 2019 —
— Increasing Orders Show Substantial Growth in Next-Generation Sequencing Products —
— Diversified Revenue from Genes Products —
— Updates Fiscal 2019 Financial Guidance —
SAN FRANCISCO, Calif. – February 7, 2019 – Twist Bioscience Corporation (NASDAQ: TWST), a company enabling customers to succeed through its offering of high-quality synthetic DNA using its silicon platform, today reported financial results and business highlights for the first quarter of fiscal 2019 ended December 31, 2018.
“We accomplished several significant objectives during the first quarter of fiscal 2019 focused on expanding our product portfolio, diversifying our customer base and continuing to deliver on our mission to supply DNA for improved health and sustainability,” said Emily M. Leproust, Ph.D., CEO and co-founder of Twist. “Our NGS products are resonating with the market and drove top-line growth in the quarter. We received much larger orders more quickly than we anticipated, requiring increased staffing and resulting in higher fixed cost in the near- and medium-term.”
“Moving forward, we intend to maintain a strong top line, work to drive our margin up, and continue to invest strategically in our vertical market opportunities focused on antibody discovery and DNA data storage.”
FISCAL 2019 FIRST QUARTER FINANCIAL RESULTS
| • | Orders: Total orders received for the three months ended December 31, 2018 were $15.2 million, compared to $7.4 million for the same period of fiscal 2018. |
| • | Revenue: Total revenues were $11.5 million for the three months ended December 31, 2018 compared to $4.3 million for the same period of fiscal 2018. |
| • | Cost of Revenues: Cost of revenues for the three months ended December 31, 2018 $11.9 million compared to $7.5 million for the similar period of fiscal 2018. |
| • | Research and Development Expenses: Research and development expenses for the three months ended December 31, 2018 were $7.3 million compared to $4.3 million for the same period of fiscal 2018. |
| • | Selling, General and Administrative Expenses: Selling, general and administrative expenses for the three months ended December 31, 2018 were $15.3 million compared to $9.3 million for the same period of fiscal 2018. |
| • | Net Loss: Net loss for the fiscal 2019 first quarter was $22.6 million, or $1.18 per share, compared to $16.9 million, or $6.42 per share, for the fiscal 2018 first quarter. |
| • | Cash Position: As of December 31, 2018, the company had $130.2 million in cash, cash equivalents and short term investments. |
“We delivered significant revenue and order growth in the first quarter – both indicators that our products are gaining traction, and we have scaled our internal infrastructure and resources to position Twist for rapid growth, particularly from our NGS products,” commented Jim Thorburn, CFO of Twist.
Fiscal First Quarter 2019 and Recent Highlights
| • | Shipped approximately 71,000 genes in the first quarter of 2019, compared to approximately 44,800 in the first quarter of fiscal 2018. Current turnaround time for 1.8 kb genes is 14 days |
| • | Continued progress in NGS product line, having shipped to 115 customers in the first quarter of fiscal 2019 with eighteen customers now in production mode |
| • | Expanded the availability of genes five kilobases (5 kb) in length to all customers |
| • | Introduced Twist Application Programming Interface (TAPI) |
| • | Received International Organization for Standardization (ISO) 9001:2015 and 13485:2016 certification for its quality management systems for manufacturing its next-generation sequencing (NGS) Target Enrichment Panels1, the latter for medical device applications |
| • | Generated early proof-of-concept data from the GPCR library and antibody optimization software for Twist Biopharma |
Fiscal 2019 Milestones
SynBio
| • | Offer customers 5kb genes at disruptive price – Complete |
| • | Introduce Twist Application Programmable Interface (TAPI) for gene ordering – Complete |
| • | Implement and execute new product introductions roadmap |
| 1 | Both ISO 13485:2016 and 9001:2015 certifications are for Twist’s San Francisco offices, located in Mission Bay. |
Genomics and Targeted NGS
| • | Achieve ISO 13485:2016 certification for quality management systems (NGS TE Panels) – Complete |
| • | Convert pilot NGS customers to full production |
| • | Launch e-commerce platform for NGS products in the first half of 2019 |
| • | Leverage growth in top line to improve variable and gross margin |
| • | Launch back-end production in China for NGS and other products |
Biopharma
| • | Generate early proof-of-concept data from the GPCR library and antibody optimization software for Twist Biopharma – Complete |
| • | Expand proof of concept data packages for the GPCR antibody library and the bio-better programs |
| • | Advance the antibody discovery and optimization programs through non-dilutive collaborations |
| • | Longer-term: seek revenue-generating partnerships |
DNA Data Storage
| • | Execute roadmap to increase synthesis density on silicon platform and reduce DNA writing cost for DNA digital data storage |
| • | Pursue non-dilutive funding for the continued development of DNA digital data storage |
Financial Guidance
For the full fiscal year 2019, Twist continues to expect to report:
| • | Revenue in the range of $47 million to $49 million |
| • | Net loss in the range of $92 million to $94 million due to: |
| • | Increased stock-based compensation costs of approximately $7 million, a non-cash item |
| • | $1.4 million associated with one-time public company readiness and NGS ramp costs incurred in the first quarter of fiscal 2019 |
| • | Increased investment in NGS operations of approximately $0.6 million per quarter driven by staffing increases associated with the increased NGS market opportunity |
| • | $1.5 million investment in biopharma as we increase our projected investment from $5.0 million |
Litigation Update
On January 29, 2019, Twist Bioscience and Emily Leproust filed a demurrer and motion to strike Agilent’s second amended complaint, challenging each of Agilent’s legal claims, as well as a cross-complaint asserting six new counterclaims against Agilent. They filed their answer and affirmative defenses to Agilent’s second amended complaint. A full statement is available at: https://investors.twistbioscience.com/news-releases/news-release-details/case-update-agilent-v-twist-litigation.
Conference Call Information
The company plans to hold a conference call and live audio webcast for analysts and investors at 4:30 p.m. Eastern Time to discuss its financial results and provide an update on the company’s business. The call can be accessed by dialing (866) 688-0947 (domestic) or (409) 217-8781 (international) and refer to the conference ID 7382069. A telephonic replay of the conference call will be available beginning approximately four hours after the call through February 14, 2019, and may be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international). The replay conference ID is 7382069. The webcast replay will be available for two weeks.
About Twist Bioscience Corporation
Twist Bioscience is a leading and rapidly growing synthetic biology company that has developed a disruptive DNA synthesis platform to industrialize the engineering of biology. The core of the platform is a proprietary technology that pioneers a new method of manufacturing synthetic DNA by “writing” DNA on a silicon chip. Twist is leveraging its unique technology to manufacture a broad range of synthetic DNA-based products, including synthetic genes, tools for next-generation sequencing (NGS) preparation, and antibody libraries for drug discovery and development. Twist is also pursuing longer-term opportunities in digital data storage in DNA and biologics drug discovery. Twist make products for use across many industries including healthcare, industrial chemicals, agriculture and academic research.
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Investor Relations Information
Twist uses the investor relations section on its website as a means of complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Twist’s investor relations website in addition to following Twist’s press releases, SEC filings, and public conference calls and webcasts.
Legal Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements. All statements other than statements of historical facts contained herein are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, Twist Bioscience’s anticipated fiscal 2019 milestones, conversion of pilot customers , revenue growth across all product categories and geographic regions, validation of Twist’s GPCR and antibody optimization software for Twist Biopharma and delivery on Twist’s mission to improve healthcare and sustainability through synthetic DNA. Such forward-looking statements involve known and unknown risks, uncertainties, and other important factors that may cause Twist Bioscience’s actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the risks and uncertainties of the ability to attract new customers and retain and grow sales from existing customers; risks and uncertainties of rapidly changing technologies and extensive competition in synthetic biology could make the products Twist Bioscience is developing obsolete or non-competitive; uncertainties of the retention of a significant customer; risks of third party claims alleging infringement of patents and proprietary rights or seeking to invalidate Twist Bioscience’s patents or proprietary rights; and the risk that Twist Bioscience’s proprietary rights may be insufficient to protect its technologies. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Twist Bioscience’s business in general, see Twist Bioscience’s risk factors set forth in Twist Bioscience’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on December 20, 2018 relating to its initial public offering of common stock. Any forward-looking statements contained in this press release speak only as of the date hereof, and Twist Bioscience specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
CONTACTS:
Investor Contact:
Argot Partners
Maeve Conneighton
212-600-1902
maeve@argotpartners.com
Media Contact:
Angela Bitting
925-202-6211
media@twistbioscience.com
Twist Bioscience Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share data)
| Three Months Ended December 31, |
||||||||
| 2018 | 2017 | |||||||
| Revenues |
$ | 11,492 | $ | 4,313 | ||||
| Operating expenses: |
||||||||
| Cost of revenues |
11,857 | 7,498 | ||||||
| Research and development |
7,273 | 4,303 | ||||||
| Selling, general and administrative |
15,259 | 9,263 | ||||||
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| Total operating expenses |
34,389 | 21,064 | ||||||
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| Loss from operations |
(22,897 | ) | (16,751 | ) | ||||
| Interest income |
664 | 158 | ||||||
| Interest expense |
(348 | ) | (273 | ) | ||||
| Other income (expense), net |
(15 | ) | (19 | ) | ||||
| Provision for income taxes |
(43 | ) | (52 | ) | ||||
|
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| Net loss attributable to common stockholders |
$ | (22,639 | ) | $ | (16,937 | ) | ||
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| Net loss per common share, basic and diluted |
$ | (1.18 | ) | $ | (6.42 | ) | ||
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| Shares used to compute net loss per common share, basic and diluted |
19,187,533 | 2,638,068 | ||||||
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Twist Bioscience Corporation
Condensed Consolidated Balance Sheet
(in thousands)
| December 31, 2018 |
September 30, 2018 |
|||||||
| (Unaudited) | (1) | |||||||
| Assets |
||||||||
| Cash and cash equivalents |
$ | 66,459 | $ | 80,757 | ||||
| Short-term investments |
63,707 | — | ||||||
| Accounts receivable, net |
6,978 | 5,419 | ||||||
| Inventory |
5,561 | 6,028 | ||||||
| Prepaid expenses and other current assets |
3,958 | 3,467 | ||||||
|
|
|
|
|
|||||
| Total current assets |
146,663 | 95,671 | ||||||
| Property and equipment, net |
13,596 | 12,331 | ||||||
| Other assets |
4,194 | 7,789 | ||||||
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|
|
|||||
| Total assets |
164,453 | 115,791 | ||||||
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| Current liabilities |
||||||||
| Accounts payable |
$ | 6,725 | $ | 7,531 | ||||
| Accrued liabilities |
7,867 | 7,567 | ||||||
| Current portion of long-term debt |
3,333 | 2,500 | ||||||
| Other current liabilities |
1,073 | 939 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
18,998 | 18,537 | ||||||
| Redeemable convertible preferred stock warrant liability |
— | 631 | ||||||
| Long-term debt, net of current portion |
6,526 | 7,218 | ||||||
| Other non-current liabilities |
333 | 344 | ||||||
|
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|
|
|
|||||
| Total liabilities |
25,857 | 26,730 | ||||||
| Redeemable convertible preferred stock |
— | 290,483 | ||||||
| Total stockholders’ equity (deficit) |
138,596 | (201,422 | ) | |||||
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| Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) |
$ | 164,453 | $ | 115,791 | ||||
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| (1) | The condensed balance sheet as of September 30, 2018 has been derived from the audited financial statements at that date included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2018 filed with the Securities and Exchange Commission on December 20, 2018. |