Twist Bioscience Corporation (TWST) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Factory of the Future Prepared Remarks and Q&A Session Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Angela Bitting, Senior Vice President, Corporate Affairs and Chief ESG Officer. Please go ahead.

Thank you, Michelle. Hello, everyone, and I'd like to thank all of you in the room and online for joining us today for our prepared remarks and the Q&A from Twist Biosciences Factory of the Future, just outside Portland, Oregon. Slides for today's event can be found on our website at www.twistbioscience.com. With me in the room today are Dr. Emily Leproust, CEO and Co-Founder of Twist; and Jim Thorburn, CFO of Twist. Emily will begin with some prepared remarks, and we'll then open the call for questions. Unfortunately, you will not be able to submit questions or queue for questions online. If you are listening, you will need to submit them to me at [email protected], E-mail me your questions, and we will read them here in the room. As a reminder, this call is being recorded. The audio portion will be archived in the Investors section of our website and will be available for 2 weeks. During today's presentation, we will be making forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements generally relate to future events or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize, and actual results and financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include those set forth in the 10-K that we filed earlier as well as those more fully described in other SEC filings. The forward-looking statements in the 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. At this point in time, I'd like to turn the call over to Emily Leproust. Emily, take it away.

Thank you, Angela. Thank you for being in the room, and thank you for both of you joining online. So today, we are very glad to have you visit the factory. And before that, too, we thought that we would share a few slides to put in compact the investments we've made here and why it's a great tool for us to keep growing our revenue and keep winning in the marketplace. So as a quick reminder, you already know we write DNA from scratch, and you'll see the machine that does that. We're very far about DNA because it has an impact on many different markets from the production of fragrance [ metals ] and materials from the genetic testing, cancer testing to therapies and further ways to preparation of future data through data storage. As you know, we have organized our businesses in 4 areas. One is in bio. It would be mostly the focus of today, mostly because this facility is mostly dedicated to synthetic biology. But as you also know, we have a trading business in GS. We have a burgeoning business in biopharma, and we are looking forward to launching our third early access product for the [indiscernible] in the latter part of [indiscernible]. We have talked in the past about customers that we have. And so we have some of the leading companies in each of those businesses. And we've shared at our last earnings call, the growth in customers that we've been able to achieve over the last few years. That growth of customers, combined with our innovative products has enabled us to have a significant and fast revenue growth. As we've discussed in the past, we have a business model, which is more of an industrial business model. By that, I mean is that we do have a high fixed cost, but our buyback cost is low, and you'll see it will be a recurring theme for our business. And so what that means is that at the time of IPO our gross margins were negative. But as we run our revenue as we absorb our fixed costs, we're able to deliver growing gross margin as we sold products after we have absorbed the fixed costs. Double clicking on those numbers a bit more. Again, today, we focus on mostly on the green part, the SynBio part, but we now are growing revenue in SynBio, NGS and Biopharma. Last slide before I dive in a bit more into our operations is our opportunity. We've given the last earnings call 2 years of long-term guidance, and that is based on the combination of existing markets that are growing and our ability to launch innovative products in each of those markets to take market share and enable the growth of those businesses. And so as you compare our revenues with the size of those markets, we are still early in our market share penetration and there's a lot of room for us to go into as we are only a small proportion of those markets. So diving a bit more into the context of this visit. Up until now, we had a main site in San Francisco. Some of you have visited it. And so San Francisco is and remains our headquarter. That is where we have the bulk of what we do. That's where we have R&D and biopharma and data storage and so on. But San Francisco is also our first manufacturing site and we have 61,000 square feet of lab space. And it's not all operations. Some of those labs are R&D. But you will see by contract that we have a lot more space here. And so a few years ago, we knew the capacity that we had in San Francisco which had at the capacity is about $200 million. And a few years ago, we knew that the ramp of our revenue was such that we were going to run out. And in 2022 fiscal year, we had $203 million. So we're kind of about full. And so we made the decision back then that we needed an expansion site. We needed to have more manufacturing capacity to meet the growing demand of our business. So we had a choice to expand in San Francisco and we choose to expand in Portland. And mostly, it gives us access to new and different talent group, the cost structure was favorable in Portland. But it was also close enough to San Francisco such that if we needed support from some of the engineering team, it was just a simple day trip from San Francisco. And so that leads us to our facility here [indiscernible]. This is mostly a manufacturing facility. We have 110,000 square feet dedicated to operations. And we had a right of first refusal on an additional 100,000 square feet, which we triggered and so we are using 110,000 square feet but we have access to an extra 100,000 square feet when we need to expand. It is also 24/7 operations, like in San Francisco. And so what that means is that we have 4 shifts. We have 7 a.m. to 7 p.m. shifts and then 7 p.m. to 7 a.m shifts and then we have a first part of the week and second part of the week [indiscernible] before shift. Again, in this facility, we are mostly focused on the synthetic biology product lines such as genes, oligo pools. We will have the ability to also do other products, but today is the major focus. And so a quick reminder on why we win. And again, hopefully, the 2 and those slides will help you in that analysis. So the first is the cost structure that we have. We view with the [indiscernible] that we use our cost structure as an advantage. And secondly, [indiscernible] testing us to literally back up the drug. We have the capacity to make [indiscernible]. Our operating is top of mind. We have this [indiscernible] product. Our customer experience is, I believe one of the best in the industry, and we get constant positive feedback from customers in that area. And last but not least, we are going after fast-growing market technology for our market and our innovative products and solution already that helps us drive the number. So today, we are progressing on the Factory of the Future, which is here, and that's [indiscernible] going to enable us to keep launching those innovative products that maybe with a bit more square feet than was available in testing. So diving into the production, how we make genes. I want to share the concept of front end and back end. So if you are online, I'm on Page 13. So the front end, that's where all level products start. So all the DNA for all the products that you see on the right are made on the same chip at the same time. And that front end gives us a massive economies of scale that we use to our advantage. And then because different products require different processing of the DNA that has been made, the oligos that show pieces of DNA, they are different back in labs. And so today, you'll see the back end lab for oligo pools. You see the back end labs for genes. You'll see the back-end lab for antibodies. You want the other back-end labs, they are not here. But that is concentrated, very important information of our business is the front end that has a massive cost advantage and there is a back end where in some ways, the back end is, as I mentioned before, it's remarkable by our unremarkability, the back end, mostly labs where you can buy the equipment. But if you have those equipments without having the back end, you don't get the benefit. So diving a little bit more. First, let's part into the front end. So in the front end, that is where the magic happens that is where the technological innovation resides mostly. And you will see the silicon chip. The silicon chip is the silicon that is the same size as the 96 well plate, and where our competitors use a 96 well plate [indiscernible] where they make 96 oligos on one plate in that same footprint, we can make 1 million oligos almost. And that is [indiscernible] technology, we shrink the volume use and that lowers the cost of [indiscernible]. As I mentioned, we make order products for all the traditional life science [indiscernible] in time, which means that there's a lot of tracking that has to happen, especially considering that we have developed on our e-commerce an ability for our customers to really tailor all the products what they want. And so something is hard to see, but something that is [indiscernible] as well in the software infrastructure that we built around this to be able to make the right DNA with the right vector and the right buffer for the right [indiscernible] again a cost structure that is not only competitive but differentiated. Moving in a little bit on the silicon chip. Again, on the silicon chip, there is a zoom in the yellow box, that is a zoom of the cluster. And so on the silicon chip, we have up to 10,000 clusters, and each of those clusters has 121 green dots and each of those green dots is where we make 1 DNA sequence. The size of the dot is 50 micron. So it's a size of a hair. And so that's why on the silicon chip [indiscernible] we can pack in 1 million or more of those oligo sequences. On each of those tiny green dots, we deliver [indiscernible] to write oligos one step at a time. This delivery is done with an [indiscernible] which delivers drug. And at the bottom right is the illustration where each drop [indiscernible] about 10 picoliters of region, and that drives the sensitives of DNA on the surface. Next slide, Page 14, I'm going to show or I will show what happens on 1 of those million features. We do the typical DNA chemistry. [indiscernible] start with a coupling of a first base that has actually the base on the surface and then oxidation to stabilize the base on to surface, then deblocking to remove the blocking group and then repeating that in this example, adding A on top of G, G, C, T, C, G and then A. And so we can build DNA 1 base at the time on the instrumentation. And again, because we only use 10 picoliters per oligo that we drive down the amount of [indiscernible] used, and that enables us to have a significant cost advantage. I mentioned before that quality is very inherent to everything we do. If I can make a plan to equate the [indiscernible] in our DNA. And so just to give you a workflow of how we get to DNA, we first have to make the silicon chip, there's a lot of QC. On the writer, we aggregate all the orders from customers. There's a lot of QC on the writer and when the DNA is [indiscernible] and extracted, we actually do 100% oligo QC by NGS sequencing, meaning that on every chip, we sequence the DNA we make to make sure that equates to where we want. In addition to the [indiscernible] advantage, I also mentioned the [indiscernible], we can make 1 million oligos at the same time, but we have also a massive cost advantage. And so because we're making genes, all we need is one cluster. So one of those 10,000 is all we need to make one gene. And so I think today we are sharing with you the variable cost of the regions that take us to make a gene. It's not something that we'll update over time, but we felt it was important and the variable cost to make all the oligos, we need to make a gene is less than $1. And I won't give you the answer, you're smart analysts and investors, I'll let you do the comprehension. But to make a gene of 1.8 KB, you need to synthesize both trends. And so that means that you need to synthesize about 3,600 bases. And so I encourage you to go on the website of our competitors, find out the price, the cost to make 3,600 bases. And you'll see that there is a huge difference in terms of just the cluster making the oligo for us versus our other people. And so this is a key cost advantage that enables us to take market share. So I'll stay on the front end. Next I'll move to the back end. So on the back end, that's where we are able to make different kind of products. And just as an example here, I'm sure you knew what [indiscernible] on the web, and once they [indiscernible] of the oligos, [indiscernible] and they can choose many different configurations. So just as a few examples, they can choose to have [ clonogenes ] or they can choose to have gene fragment. They can choose how much [indiscernible] weight of DNA, they get that they want to microgram, do they want 1 milligram. They can choose to everything [indiscernible], they can have a [indiscernible], we can normalize, we can [indiscernible], they can have [indiscernible] free if they want, and they can choose their vector, even if there is in the plate, we can tell us on 96 well plate and [indiscernible] plate. They can have a [indiscernible]. It's really ab ecoplate, it's with something like [indiscernible] it's your DNA, your way. right? You can really treat everything and so on the web, they're able to choose all those configurations, and that's why the software is important for us to be able to deliver the right DNA in the right [indiscernible] sends the right address, the right bar code and the right invoice. So that's where first square is important. Once we book the order and we've made the DNA on the front end, in goes into a back-end workflow as shown here, Page 22. And so it is complicated molecular biology workflow. Once oligos is made and predicted and transferred, we can assemble them into a fragment after you see that can ship, if someone wants to fragment, if someone wants [indiscernible] we transform it [indiscernible] it, we prick it, we grow it, we mini prep it, we [indiscernible] and you can see, there is a lot of QC around to make sure that we are hitting the right DNA to the right address. And the one thing that is very important as you make all of that is to control the cost. We have such advantage on the front end, but I want to make sure that we keep that advantage. And the way we do that is shown on the next slide is to be very conscious about our variable cost and our fixed costs. And so in the viable costs, those are all the regions that it takes to make the oligos [indiscernible] genes, clone them, QC them, ship them. And so again, we are sharing our variable costs for today. It's not something that we share all the time, but we want to give you something effective. And so about 35 to 40 [indiscernible] costs. That includes the less than $1, I mentioned earlier. And so again, if you try to compare our competitors do it where they are very confident that their numbers for [indiscernible] very significantly bigger than ours, and that is our advantage of [indiscernible]. Then the second advantage that we have, and we'll focus on is our fixed cost. Our fixed cost is high. You'll see there's a lot of CapEx. That means there's a lot of depreciation. However, because that fixed cost is it's already invested. It enables us to have a huge advantage as we scale. So as the demand grows, we can make more and more genes without substantially changing the fixed cost. And so what that means is that we can use fixed cost as an advantage in competitive situation. Indeed, maybe moving to the next slide, as our business scales, we can use the fixed cost as leverage. As I said, we have made investment in the equipment. We've made the investments in labor, which is a fixed cost in the lab. With that labor, could make 1,000 genes a day or 2,000 genes a day or 3,000 genes a day. And so as the demand grows, we can leverage the investments we've made in our fixed costs, whereas our competition, A, they go from a 1,000 genes a day to 2,000 genes a day, they need to double number of people, they need to [indiscernible], and so they don't have a scale advantage whereas we do. And so that's why, from a historical point of view, we've been aggressive with price because our strategy was to as quickly as possible, bringing volume to absorb the fixed cost and then as we drive penetration in the market companies as our revenue growth beyond fixed cost absorption, we get a great advantage from our variable costs. And so prepare your questions because I'm coming to an end in about 2 slides. As again, the benefit that we have is we build an industrial scale DNA synthesis, gene synthesis. The benefit that we have come from first [indiscernible] I mentioned it on the front end, you'll be able to see it. I did not speak to it quite directly, but I mentioned that there's a lot of QC happening. And we use NGS QC, whereas traditionally, the QC of the gene is done by Sanger. Sanger is very expensive. So that adds to variable cost. However, when we use and you see we can drive those [indiscernible] so that's how the variable cost we mentioned of USD35 to USD40 includes making sure that [indiscernible]. Automation and throughput is a key driver of our growth and bringing efficiencies of scale. So that's why, again, as we grow more revenue, as we launch more innovative products, we are very confident in our gross margin profile. And then last but not least, again, today, I mentioned that we see the genes, the antibody, the Oligo pools but the same platform enables us to do a wide variety of other products which we won't see today. So last slide. As a reminder, the brands that we have established is a brand of high-quality, low-cost provider. And as a reminder, [indiscernible] channel check, but we are not shrinking the market. We are lowering the cost per data point, but our customers have more ideas than their budget. And so what that means is that we are dealing with an elastic market. And so the low-cost provider and the low-cost positioning enables us to take market share, but we're not shrinking the market. And the [indiscernible] enables us to make sure the customer keeps coming back. We do have a growing customer base. We have expanding markets in SynBio and NGS with new market opportunities with the [indiscernible]. And as we've seen in the past, we have launched very innovative products, and we have a pipeline of continuing that investment in this product. So hopefully, the one thing to leave with today is that scale is fully the key to us. We first scale throughput, leveraging our fixed cost has been from day one the business model and the strategy that we've employed. And we've been quite happy with what we have achieved so far, thanks to all the [indiscernible] and we look forward to continuing in that direction. So with that, I think 0930, exactly on time for Q&A and so we can take Q&A in this room.

We should take Q&A in the room. Yes, absolutely. And as they come in online, if you have them, please e-mail me at [email protected].

If you could just talk going back to USD 35 to USD 40 variable COGS, just maybe I missed it, I just want to understand like what is that per?

That is per gene and [indiscernible] on the SynBio side, one of the [indiscernible] to make it [indiscernible].

And the $1...

And the $1 is to make one...less than $1 if you make 1 cluster on the silicon chip and that cluster can be up to 121 [indiscernible]. And to make a gene or to make a fragment, you need one cluster for less than [indiscernible], you may be up to 3 clusters. But again, it's quite...

And just my other question is just on the automation. I know we were there a few weeks ago. Part of the process is manual and probably will be manual, but the way that you explained the Factory of the Future allows you to run under multiple lines or just make a much more efficient in terms of, at some point in your process [indiscernible] create some bottlenecks. Could you talk about automation just in general? And are there parts of the process that you feel actually can be automated with sort of maybe not necessitating an advent in technology, but like areas that you think you can improve on the automation side. that could potentially improve the efficiency.

[indiscernible] question. So for speaking broadly about SynBio products like genes, oligo pools and fragment, the manual part where [indiscernible] are used [indiscernible] bring the reagents and bring the consumable on some kind of a machine and then using a barcode reader to scan a few barcodes and then pushing a button to start mission. That's the extent of the manual label. And then once that process is done on the machine, you have to go to the next machine. And so again, we're able to move the place to the next machine sensing greener region, greener consumable energy barcode and stuff. And so what we believe is we have automated in the most efficient way, the part that is very difficult, which is the movement of liquid. So to your question, could we integrate more? Again, the back end, the multiple states, multiple machines. Could we do a true SMB line like a car factory, whether it's a robot state we move the place from one place to the next. And so over the years, there are some areas that we have done that. And there's been part of the process that used to be on 3 different machines, and that we have condensed on one machine. So it is possible. However, I think that's a mistake that many burgeoning emerging biotech companies do is they try to automate everything. And actually, the cost of automating that movement of plate sometimes may not be worth it. A long answer to say we can automate more, some of those plates transfer, but we are trying to be very disciplined and thoughtful as to at as an actual positive ROI. And I would say that in general, there's not a lot more that we will want to do. It's pretty, we've been pleased with what's been already quickly well efficiently done...

My last question is just, so is that not wanting to go fully automated? Is that because it could become a quality issue?

No, it's a pure ROI, okay. We look at right what is the R&D investment to design an integrated system, right? And what will that save in terms of labor and then measure the ROI, we [indiscernible] doing that of investing our R&D dollar into a different product. And so we have to be very disciplined in that analysis. And that's what we've done so far, and we'll continue to do that.

Emily, it's Steve Mah with Cowen. Maybe just a follow-up question to Matt's question about the gene manufacturing costs of USD35 to USD40...

Variable costs.

Variable costs, yes. Is that based on the South San Francisco cost? Or is that more of a blended cost integrating the Factory of the Future because and maybe as you can discuss maybe the labor costs of here in Portland versus San Francisco, maybe some of the fixed cost, the facility costs, if that's cheaper compared to San Francisco. And then a final question on the life science talent pool, speak about being able to recruit qualified life science folks here in Portland.

Yes. So we have started [indiscernible] the numbers are based on San Francisco numbers. The process here is very substantially the same. And so we won't know until we run it, but we believe that the variable costs should be similar. From a talent point of view, what we find is that there is great talent both in the Bay area and in the Portland area. However, what we do find is that for the manufacturing labor pool is so far [indiscernible] it's harder to retain them in the Bay area than it is to retain them here in [indiscernible] business. So the talent pool is equally qualified. The cost may be slightly lower in the Portland area. But what we are seeing so far and that's what our expectations coming is that from a retention point of view, it's probably a bit easier. I think it makes sense because the cost of living is just lower in the Portland area. And so it's just easier for the workforce to thrive in the Portland area than in the Bay area.

Okay. Great. And just one more question. Obviously, we haven't toured the facility yet, but we drove around it. And so clearly quite big. Can you give us a sense of some of these innovative new products you mentioned and you said it was going to leverage the event space you have here. I mean what would that entail in the new products?

And so the great question because the main driver was to increase capacity, but also give us opportunity [indiscernible] for us. One point that we're trying to be public about is the concept of fast gene. And this is not the marketing gene. So when we launch it, it may be it a different name, but basically, can we have the [indiscernible] that we've been selling today, but produce it in a substantially faster amount of time. And that is what we've also planned in this facility. It is a more [indiscernible] production chain. It's the same equipment than [indiscernible] but we have more of them, meaning that when the work is done on one machine, there's another unit that's ready to go to the next step. So we think there'll be less wait time of going to one unit to another. And that will give us an opportunity to make genes, basically have the same cost structure as low teen, again, not the market name, so we'll have 2 flavors of teams, one of these [indiscernible] and it's made at the same period now. And we believe that the fast production will have a higher value to our customer, and we should be able to extract a higher premium price even though the cost may be substantially the same for that one flavor. As of level of DNA that we've been mentioning is actually RNA pre-COVID, as you probably know, it would have been very difficult to launch an RNA drug as lately because going through the FDA safety protocol, we have been quite gently, but now that billions of people have had RNA with vaccine, we know it's safe. And so what we are seeing in the marketplace is a number of companies that are choosing RNA as a new modality. And for their drug discovery, they need access to many different RNA sequences. And so we are frankly literally being driven into the market by the demand. And so once we've made the DNA, it's a question of just transforming that DNA into RNA, capping it, you're seeing it is something that we can do at scale in a very cost competitive manner. And so we think that we may have the opportunity to go into the RNA market in a way that is quite innovative and quite competitive.

Will the facility be GMP certified at some point? Or is it already?

So the facility here is not GMP qualified at this time, in South San Francisco, part of the facility, [indiscernible] which is very close to GMP. And we use that part to produce all of our NGS products [indiscernible] which is required by our customer. So we know to do [indiscernible]. And so we'll be able to leverage that knowledge so that in that this facility, we can make SynBio products like oligo [indiscernible] again at probably premium pricing because it has more value. So we have the internal knowledge of doing it. Now we have the space and our intention is, over time, to have some parts dedicated to [indiscernible] production of SynBio products.

[indiscernible]. Could you maybe just talk about time line per [indiscernible]? Is that something that as you start ramping up, you'll be ready to go and just be important to that unlocking gene making market and [indiscernible] sort of in the future like any potential time line for that...

Yes. So you are very right that [indiscernible] is, in our view, keen to unlock in the major market. And so that's one of the reasons why we are very excited about [indiscernible]. In terms of time line, I think we shared the second half calendar 2023 we will be able to leverage the full power of the facility to provide an option...

And just one other question, and apologies if you've already discussed this in the previous call, but just how does the [indiscernible] play out into this? It seems obviously more efficient, less scarring, but is that going to be part of the full end process where Factory of the Future is that [indiscernible] over time?

That's a great question. So as we've stated in the past is that we are developing an [indiscernible] synthesis for better work and the reason why, again, it's not about cost. We mentioned that the order to make to go on our machine is less than $1. Today, the enzymatic synthesis cost is higher than the [indiscernible] So it will not make sense today to do it for gene synthesis. The reason why we're doing it is for data storage, we know that we need to have synthesis module add data centers for customers. We know we need it. And so the driver for the investment [indiscernible]. However, [indiscernible] instead of 1 million [indiscernible] so 24x better 256 x better. And so you can imagine that the diversity of oligos we can make could be useful in biopharma. It could be useful in [indiscernible] as well as the lower cost. So we'll definitely be very aggressive in leveraging to the full extent our R&D investment. But so far, it is driven through that effect.

We've got about 4 minutes left in the call. I wonder if we can take a couple of questions. So the first is, what do you think the advantages of Portland are over South San Francisco in terms of manufacturing?

Yes. So [indiscernible], but I think the main advantage for us is an ability to reach a different talent pool, a talent pool that is potentially as a lower cost to the company and a slow talent pool that live in an area that has the lower cost of feeding, which means that we get an advantage in terms of retention. So that's definitely an advantage. And it is at the same time as the advantage of being close to South San Francisco, such that we do, first one is [indiscernible] the R&D center is innovation center. And so as we need to deploy those new processes, those new products, it is close enough that those new products can be launched with [indiscernible] definitely easier to take a 1-hour flight than flying across the country, different time zone of different countries. And so it has the advantage of a more stable [indiscernible] as well but at the same time, proximity to the headquarters where the R&D innovation continue to be done.

Great. And one more here. Could you talk about the market for fast genes, how big is that market?

So there's 2 parts to the answer. First part is what the market is today and whilst we think the market could be. And so today, we can [indiscernible]. There's a few companies you buy DNA, and you would get it inside it. But the cost the sales price is very high. It can be up to $1 base. And so what that means is that our view is that the actual market today of people buying fast gene is relatively small just because the price are it's too expensive for the vast majority of the applications. However, what the market could be what we believe is that there is $1.4 billion being spent by DNA makers that do their own cloning, they buy their own oligos, their genesis. And those customers are a very big fraction of them. I mean, they don't want to make the DNA, it's available [indiscernible], but they need to do it because of the speed of doing themselves. And so we believe that potentially that entire market is available. If we can find the right price, that will be a premium price to this price, but not $1. Again, we believe that with the right price, and we'll be able to convince those makers to start making and buying from us instead. And so we have the benefit of this fixed cost investment that we can leverage to scale, we believe could enable us and across the lower variable cost structure will enable us to bring those DNA makers onto Twist, we'll be able to get the premium credit pricing premium margin and get them a great service because they will get [indiscernible] speed they need with not having to do it themselves. Again, today, it's a small market, but it's a big opportunity if we do it right.

And a follow-up to that is who are the DNA makers who are making their own DNA?

So there's 2 big groups, one groups are industrial companies or pharmaceutical companies that need DNA to turn into RNA and DNA to turn into antibodies. And there are big scientific teams that are waiting for the product. And so making their own DNA quickly enables them to go through the discovery and development of drug vaccines and so on more quickly. And to be fair for those customers, there may be buyers of some pieces and they'll be making leading them to make [indiscernible] pieices. So that's the first big bucket, our industrial companies. And the second big bucket are academic groups. And so the [indiscernible] that are doing vertical research and because the time to finish the [indiscernible] is so important. They go in the lab and they clone on their own, just to get to the answer faster because they have to get the answer to the first question to get to the next and the next. So those are the 2 big buckets. And as a quick reminder, not forcing by, but for the company in general. I think only 20% out of our revenue comes from academic groups. And so we're quite underweighted on academia. And with the fast gene products, we want to use both of those group of customers, academia and big industrial companies.

Great. So I think, operator, we'll conclude the Q&A for the online portion. We can stay here for a few minutes, and then we will begin the tour of the Factory of the Future. Michelle?

Thank you all for joining us today. This concludes our conference. This concludes today's conference call. Thank you for participating. You may now disconnect.

Thank you, Michelle.

Thank you.