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Twist Biosciences Corp (NASDAQ: TWST) is a company specializing in DNA synthesis. Twist Biosciences operates in the synthetic biology sector, which involves applying engineering principles to the field of biology to create genetic material that does not exist in the natural world. Innovations such as the creation of microorganisms to clean up oil spills were made possible as a result of synthetic biology. The technology behind this work is still very new, and Twist Biosciences has gained a large head start on competition through advances they have made through research and development.
What is Twist Biosciences Corp (NASDAQ: TWST)?
Twist Biosciences was founded in 2013 by two scientists, Emily Leproust and Bill Peck. The company founders built the Twist with the intention of manufacturing and selling custom-built DNA for use in research and development. The manufacturing is done through Twist Bioscience's DNA Synthesis Platform, which uses advanced technology to produce DNA at scale by “writing” them onto silicon microplates. The writing of genetic sequences is often the most time-consuming and costly part of the process when working on research that involves DNA. As a result, many research firms are choosing to instead purchase from companies such as Twist rather than doing the writing in-house. By doing so, they are able to gain lower costs by taking advantage of the economies of scale and industry expertise Twist Biosciences processes. Writing the correct sequence is necessary to create the exact genetic material needed to conduct their research studies. The process of purchasing is as simple as uploading the required sequences online and placing an order. By reducing the costs and increasing the quantity of material delivered, the time required to conduct research is greatly reduced.
The company is headquartered in San Francisco and employs over 500 people worldwide. One of their biggest customer bases are companies within the biopharma sector. Using the genetic material manufactured by Twist, researchers in this field have been able to conduct experiments to better understand and potentially find cures for cancer, autoimmune disease, cardiovascular disease and infectious diseases. Much of this work is done through Twist Biopharma, a division of Twist Biosciences. This division has created a proprietary genetic library that stored the genetic code to a wide range of existing sequences that occur naturally within the human body. These can be used by researchers to study in a lab setting how the body behaves and reacts to different types of medication and is vital in the early stages of drug development.
Why does Twist Biosciences Corp (TWST) Matter?
DNA is the fundamental building block in the study of biological sciences. Low cost, highly reliable synthetic DNA is opening up the doors to additional areas of research with untapped disruptive potential. The company has customers that use its products and services in a broad range of applications, including healthcare, agriculture, and chemical manufacturing. Through the research done in these fields using Twist manufactured DNA, products such as advanced biofuels, bio-products, renewable chemicals, bio-based specialty chemicals have been developed.
Twist Biosciences is best known for the development of silicon microplates, which have drastically reduced the amount of time and resources required to write and store DNA. Using Twist technology, synthetic DNA is manufactured and then written on silicon chips called microplates. These microplates can be customized to hold specific sequences of genetic material, thus allowing scientists and researchers to purchase microplates containing exactly what they need to conduct their research. Traditionally, each microplate was made of plastic and contained 96 wells, which are the areas where DNA and other genetic material is stored on the microplates. Through advancements developed by Twist that mimic the miniaturization seen in semiconductors over recent years, the company now has the ability to manufacturer silicon microplates that feature 9,600 wells. This increase allows each plate to write and store a vastly larger amount of synthetic biological material, such as genes, variant libraries, and oligonucleotide pools. On average, Twist products can save a research lab up to $90,000 and 37 hours compared to performing the work in-house.
Twist Biosciences Corp (TWST) Prospects
The company has been able to keep up with changing trends in a relatively new market and is not afraid to invest money into ideas with a long-term outlook in mind. For example, when the company first started putting resources into NGS (Next Generation Sequencing) in 2018, it was a small part of the company’s business. Only a few years later, NGS is generating nearly half of their total revenue. The development of technology by Twist has been described by CEO Leproust as one that enables upstream companies. As the price and time required for Twist to produce DNA sequences continue to decrease, more companies are likely to outsource the manufacturing of genetic material to them.
In anticipation of future growth, Twist plans on expanding its manufacturing and commercial capabilities with the addition of the “Factory of the Future” located just outside of Portland, in Wilsonville. This 110,000 square-foot facility is likely to become operational in 2022. This expansion is going to nearly double the workforce size and allow the company to grow exponentially, allowing them to reach a larger customer base and expand their reach globally into new sectors. As demand for their products continues to grow, this expansion is going to allow the company to scale up and position it well for aggressive growth into new markets.
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With the manufacturing of genetic material made possible by synthetic biology, there are endless possibilities for new and exciting scientific innovations. Twist’s silicon microplate technology for DNA sequencing has enabled them in manufacturing high-quality synthetic material at a much lower cost and higher volume compared to its peers. As more companies become comfortable and familiar with the potential of synthetic biology and new innovations are discovered, growth options for Twist remain highly promising.
Baggio has been an investor in the technology space for over half a decade. He uses the perspectives gained from his work experience in the private, public, and non-profit sectors to guide his investment strategy, with a specific interest in the potential of emerging disruptive technologies.