As Twist Bioscience aims to untangle its operations and focus only on its most potentially profitable work, the synthetic DNA maker is cutting down its workforce.
In an earnings report released Friday that covered Twist’s second fiscal quarter of 2023—which ended March 31—the company shared its plans to lay off a quarter of its employees, for a total of about 270 workers.
According to the company, the slimming down will allow R&D teams to focus on projects where Twist believes it can be most successful in the long term, while a reconfigured biopharma team will be tasked with looking for “revenue-generating partnerships.”
Though the layoffs will help cut down on Twist’s stock-based compensation expenses, it’s expecting to rack up separation costs between $9 million and $11 million.
Alongside the workforce reduction, Twist’s cost-cutting moves also include consolidating the majority of its synthetic biology product manufacturing to the newly opened “factory of the future” in Wilsonville, Oregon—leaving its longtime South San Francisco location to continue churning out next-generation sequencing panels—as well as cutting down on its investment in DNA-based data storage services.
Emily Leproust, Ph.D., the company’s CEO and co-founder, said in the release that Twist is “laser-focused” on a goal of breaking even in its core and biopharma businesses in terms of adjusted EBITDA, while also “maintaining optionality for the potential we see in data storage.”
“Following a strategic and holistic analysis of the business, we prioritized and reengineered our cost base, and with these substantive changes, we believe we are operating from a position of strength, operating as a leaner organization focused on disruptive market opportunities for profitable and scalable growth,” she continued.
Twist has yet to reach that coveted EBITDA break-even point—despite recording its highest revenues yet in the most recent quarter—but has set its sights on getting there by the end of fiscal 2024.
For the second quarter of fiscal 2023, the company recorded $60.2 million in revenues, representing an increase of more than 25% compared to the $48.1 million it raked in during the same time last year and its first time “breaking the $60 million revenue threshold,” per Leproust.
At the same time, however, Twist’s cost of revenues also expanded, reaching nearly $42 million, and it racked up expenses of more than $81 million across R&D and selling, general and administrative costs. Altogether, the company calculated a net loss of just over $59 million, bringing it only a smidgen closer to profitability than where it was a year ago, when its net loss clocked in at $60.7 million for the quarter.
For the rest of the fiscal year, while Twist is expecting to see its third- and fourth-quarter revenues also cross the $60 million mark, it has simultaneously lowered its overall forecasts. Now, it’s predicting that total 2023 revenues will top out at $238 million, well below its previous guidance, which said that they would land somewhere between $261 million and $269 million.