Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Codex DNA, Inc. (DNAY -4.42%)
Q3 2021 Earnings Call
Nov 09, 2021, 5:00 p.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Ladies and gentlemen, thank you for standing by and welcome to the Quarter 3 2021 Codex DNA Inc. earnings conference call. [Operator instructions] I would now like to turn the conference over to your host, Mr. Richard Lepke.

Sir, please go ahead.

Richard Lepke -- Director of Investor Relations

Thank you, Mel. Good afternoon, and thanks for joining us for Codex DNA's third quarter 2021 earnings call. With me today on the call are Todd Nelson, our chief executive officer; Dan Gibson, our chief technology officer; and Jennifer McNealey, our chief financial officer. Our third quarter press release is available now on the investor section of our website.

If you have not received the news release, or if you'd like to be added to the company's distribution list, please send an email to [email protected]. Before we begin, I would like to inform you that certain statements we make during this call will be forward-looking. These statements involve known and unknown risks and uncertainties that may cause actual results to differ materially from those expressed or implied. Such factors include those referenced in the safe harbor statement included in our earnings release and in our filings with the SEC.

10 stocks we like better than Codex DNA, Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* 

They just revealed what they believe are the ten best stocks for investors to buy right now... and Codex DNA, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of October 20, 2021

This conference call contains time-sensitive information and is accurate only as of the live broadcast on November 9, 2021. Finally, any percentage changes we discussed will be on a year-over-year basis unless otherwise noted. With that, I'd like to turn the call over to Todd, Codex DNA's CEO.

Todd Nelson -- Chief Executive Officer

Thanks, Rich, and good afternoon, everyone. We're pleased to share our financial results and business performance for the third quarter of 2021. We had another solid quarter in terms of our financial results with product revenue growth, 70%, and royalty revenue growth, 73%. Notably, BioXp franchise revenue, comprised of instrument and reagent sales were particularly strong drivers of record sales for both BioXp instruments and kits in the quarter.

Sales of BioXp kits more than doubled, driven by strong contributions from recently launched applications for DNA focusing on variant libraries and longer, more complex build. This past quarter was also a transformational quarter from a strategic perspective as we made tremendous progress in our R&D pipeline, business development, and commercial execution. These three areas will help write the next chapter of Codex DNA's sustainable growth story. Before we get into the financial results, I want to provide some perspective on where Codex DNA is headed over the longer term and discuss progress within our R&D pipeline.

For those of you who are new to our story, our mission is to apply breakthroughs and automation solutions for synthesizing DNA, mRNA, and proteins to allow scientists to both program and then subsequently print biology, creating novel healthcare and technology solutions for some of humanity's biggest challenges. To achieve this mission, we are developing the world's first line of synthetic biology automation platforms and applications that we believe will enable researchers worldwide to build biology with the push of a button at the benchtop. Our vision has never felt more achievable as I reflect on the progress made by our R&D teams, who are not only focused on developing new and innovative applications for existing BioXp systems to drive sales of on-market products but also on developing paradigm-shifting future technologies. These innovations have the potential to fundamentally transform our industry and at the same time position Codex DNA to serve significantly larger and broader addressable markets.

The future of our automated family of BioXp systems and consumable kits is focused on the development of truly novel desktop printing architectures that use a proprietary form of enzymatic DNA synthesis, or EDS. Unlike traditional DNA synthesis methods, enzymatic platforms do not require the use of toxic chemicals during the DNA synthesis process, while traditional desktop methods for the synthesis of DNA have been in existence for decades. The need to perform these process is using sustainable, scalable, and cost-effective solutions has revealed a multi-billion dollar opportunity that we believe we can tap into with the use of our automation solutions and applications that enable desktop printing of DNA, mRNA and proteins. We refer to our EDS platform as SOLA, which stands for short oligo ligation assembly.

SOLA is a patent pending DNA ligation and amplification approach developed by our internal team at Codex DNA. SOLA uses a DNA ligation and amplification process to generate synthetic oligos from a make-to-stock universal library and very short DNA building blocks. We believe that this proprietary approach is the only solution currently being developed that is suitable for the synthesis of longer fragments of DNA, mRNA, and protein and which may result in higher quality and reliability compared with other EDS approaches. Additionally, because of our proprietary manufacturing process, or SOLA, we believe there is a significant cost advantage over potential competing technologies, such as TdT-based chemistries.

We have achieved important milestones related to the development of SOLA technology and significantly advanced our program during the third quarter. I'm pleased to announce that we can now reliably and reproducibility print high fidelity short DNA oligos of between 20 and 100 base pairs in length. These oligos can then be efficiently assembled using our Gibson Assembly reagents into synthetic genes and mRNA templates of up to approximately 2 kb in length. Additional technical achievements include building biologically active guide RNAs for CRISPR Cas9 genome editing and the production of PCR primers.

These milestones demonstrate the viability of our technology and exceptional capabilities of our R&D organization are a testament to the strength and dedication of our team. The eventual goal of this exciting technology is to build that we describe as the BioXp digital-to-biological converter, or DBC system. By utilizing our solar technology, our DBC system has massive potential to disrupt existing vaccine and biologics discovery and development workflows by dramatically decreasing the amount of time it takes to print DNA, mRNA, or protein. In the future, the system's unique design will allow Codex DNA customers to begin their experiments with a digital DNA sequence instead of physical pieces of DNA, such as oligonucleotides.

The DBC system is designed to take binary DNA sequence data and produce synthetic genes or convert those genes automatically into mRNA or protein at the benchtop. We believe the DBC system will enable a sequence-in biologics-out paradigm that can potentially replace a significant portion of traditional centralized DNA manufacturing processes. Depending on the application, our DBC workflow may be carried out in a matter of hours or days, which would represent a massive improvement compared to current approaches which currently may take weeks to months. The impact of this technology is profound, both from a commercial and an ESG perspective.

It has the potential to significantly reduce the development times for both infectious disease and cancer vaccines and therapeutics, while also significantly reducing the waste and benefiting the environment. Imagine the power of a system that can take a digital sequence corresponding to a piece of DNA and sustainably print that DNA, or its corresponding mRNA or protein, anywhere in the world with the push of a button. We believe the solar-powered DBC instrument will have potential to dramatically expand Codex DNA market opportunity, allowing us to tap into potential multibillion-dollar market for global printing of biology. The global market opportunity for synthesized DNA oligos and reagents alone is estimated to be at about $1.9 billion a day, with the potential to expand to around $4 billion by 2026, driven by the growth of new therapeutic applications and increased focus on personalized medicine.

We are pleased to report that we are on track with our development of our DBC system, which is enabled by the assembly and integration of the BioXp 9600, a higher throughput synthetic biology automation platform, and the solar-powered BioXp oligo printer systems. The BioXp 9600 built on the foundational technology underlying the current BioXp 3250 and has an advanced motion control system which allows for higher processing speeds and greater reliability. It is designed to include additional reagent capacity and consumables that enable as much as three times as many DNA, mRNA, and proteins to be generated with each run while retaining all of the functionalities of the current BioXp 3250 system. The BioXp 9600 is currently scheduled for beta release during the first half of 2022, with a full commercial launch of the system in the third quarter of next year.

Our solar-powered oligo printer instruments, which are on track for commercial launch in 2023, can be sold as a stand-alone benchtop instrument or can be integrated into the 9600 install base to make possible our vision of on-demand printing of desktop biology. We are also pleased with the progress in the development of our mRNA and protein product lines. We estimate that we will be able to launch our CleanCap mRNA product during the fourth quarter, which will give us access to an additional customer segment for mRNA synthesis. The CleanCap technology is expected to increase productivity and yields for mRNA synthesis workflows while providing us with access to an additional segment of the market, not using the ARCA capping technologies contained in our initial product release.

We also remain on track to commercialize two additional mRNA kits for the BioXp in the first half of 2022. These kits will focus on longer mRNA synthesis capabilities of up to 7 kb transcripts and increased yields, which positions our mRNA franchise to support additional workflows, such as vaccine development, which typically require larger builds. When taken together, we believe our suite of three BioXp mRNA kits will cover a significant portion of the small-scale rapid synthesis market for mRNA. And we believe we are uniquely positioned with the BioXp 3250 to benefit from strong fundamental drivers from the adoption of synthetic mRNA.

Switching gears, I'd like to touch base in our business development efforts. Today, we announced that we have agreed to acquire Eton Bioscience, a privately held provider of synthetic biology products and services based in San Diego. We've set the deal to close within the next 60 days. We're excited to welcome the Eton employees to our team.

We think the deal is an excellent strategic fit. We believe it will accelerate our long-term growth rates, provide opportunities to expand our profit margins, and support our enzymatic DNA synthesis product development program. Overall, this deal makes us a fundamentally stronger company for several reasons. First, we believe there are synergies from a customer acquisition perspective, as Eton serves a very similar end user market with its products and services.

Therefore, the deal immediately enhances our commercial footprint and reach by giving us access to Eton's extensive customer base into which we intend to introduce the BioXp product line. Second, Eton's DNA sequencing and oligo synthesis offerings are highly complementary to our commercial platforms and have the potential to expand our BioXp customer reach and build stronger customer relationships, while at the same time demonstrating the value of our BioXp platform and the Codex DNA team's scientific expertise. Not only will these expanded commercial offerings enable us to provide more solutions to a broader customer base, but they also enhance the potential customer funnel into our product business. Third, there are several strategic benefits to this acquisition associated with the production of oligos, which is an important raw material for our business.

In the near term, the addition of Eton gives us greater control over oligo supply and quality by supplementing our current procurement efforts. The acquisition provides an opportunity to improve our already industry-leading customer turnaround times by reducing procurement wait times. In the longer term, we believe Eton, through the deployment of its proprietary oligo synthesis platform, can scale up to contribute meaningful portion of our oligo supply in the future. Those efforts will further enhance the acquisition benefits while also reducing our oligo synthesis costs, potentially providing significant accretion to gross margins.

It's important to note that this production ramp-up will require some time, development efforts, and capital investment. We expect to be able to begin ramping up in the fourth quarter of 2022. And finally, we believe that our combined technical expertise could potentially accelerate some of our research and development areas in the area of enzymatic DNA synthesis. We have set Eton's oligo synthesis capabilities to benefit our solar-powered BioXp oligo printer system developments with longer-term potential to supply us with some of the materials needed for EDS.

Overall, we believe the acquisition is the right thing to do for the company and our shareholders due to these clear strategic advantages. We are potentially expanding our commercial offerings, securing a portion of our oligo supply, reducing raw material costs, and accelerating our growth strategy. Moving on, Jennifer will review our full financial results. But before she does, I'd like to discuss our commercial execution in the third quarter.

We had a record quarter for BioXp. Our award-winning BioXp system is a fully automated push-button platform for the rapid synthesis of both DNA and mRNA. Certain drug discovery activities that previously took months can now be completed using the BioXp system in just a week or so, and what previously took days can now literally be done in hours. Industry-leading quality combined with enhanced speed, accuracy, and scale can result in vast improvements to productivity.

Our customers recognize these benefits, and demand remains very strong. Overall, we believe that we're in the early innings of the product lifecycle for BioXp 3250 instrument. We also had a record quarter for BioXp kit revenue, driven by strong results for revenue associated with recently launched products of the BioXp. We also expanded our customer base across geographic regions and responded to customer demand with the release of our full-length synthetic genome for the highly infectious delta variant of the SARS-CoV-2 virus.

Synthetic genomes can be used by researchers to generate breakthrough therapies and vaccines and to develop new diagnostics to help detect, contain, and slow the spread of highly transmissible variants in the COVID pandemic. This release not only proves our technical capabilities and scientific expertise in the complex genome synthesis area but also demonstrates our commitment to building and providing innovative synthetic tools that accelerate virus research and simplify the discovery and development processes to make positive impact on our world. Finally, we continue to strengthen our leadership team with key hiring throughout the organization, including Chief Legal Officer Rob Cutler. Rob was the former general counsel and secretary of synthetic genomics.

We will continue to hire in key roles to support accelerated growth, particularly in our commercial organization, in the coming quarters. With that, I'll pass the call over to Jennifer to review our financial results.

Jennifer McNealey -- Chief Financial Officer

Thank you, Todd. Detailed financial results for the current quarter were included in today's press release. I'll briefly review our results on this call. Codex DNA is well-capitalized with cash and investments of $109 million as of September 30, 2021.

Revenue was 2.8 million for the third quarter 2021, a 70% increase in total revenue from 1.6 million for the same period in the prior year. This growth was primarily driven by product sales due to new product introductions. Royalties and other revenue also grew because of an increase in revenue related to the licensing of our products, as well as collaboration research program revenue. Cost of revenue for the third quarter of 2021 was 1.6 million compared to 0.7 million for the same period in the prior year.

The increase of 0.9 million was primarily driven by higher raw material costs associated with sales of reagents and biofoundry services, higher instrument units sold, and cost related to our collaboration research program. The collaboration with the USDA to combat citrus greening disease is a low-margin cost plus government contract, and negatively impacts our overall growth margin. Before we continue discussing the rest of the P&L, I want to add additional context and discuss our plans for improved gross margins in the short, medium, and long term. Our cost of goods sold is currently highly sensitive to the cost of oligos, which is a key raw material for all of our BioXp kits.

In recent quarters, we have encountered several supply chain challenges from suppliers we currently source from. This has negatively affected our gross margins. However, we expect these issues to be temporary and that our margins will improve gradually over time as we execute on several different solutions. Let me take a moment to outline for you our three-step plan to improve gross margins and control our supply chain for critical raw material.

First, in the short term, we continue to work with key suppliers to ramp production and established new volume-based discounting arrangements. As we ramp up volume, we will see benefits from a unit cost perspective along with the fixed cost absorption benefits. We also have implemented additional in-line quality control processes with these suppliers to drive improved quality and reliability. We expect to see these benefits right away, and gross margin should trend higher in the coming quarters as we implement these initiatives and drive product mix to higher-margin products.

Second, our acquisition of Eton Bioscience will provide us with direct control over a portion of our oligo supply. As the business grows, the additional supply of oligos from Eton platform will help fill any gaps and secure our supply needs by supplementing procured volumes. Starting in the fourth quarter of 2022, we believe that Eton can begin scaling up production of oligos, which should reduce our unit costs further and potentially provide significant accretion to gross margins as we ramp up production. As had also mentioned, this ramp-up will require time, development effort, and capital investment.

But we believe that Eton provides us a great opportunity to improve the cost of raw materials. In the longer term, the launch of our next-generation enzymatic DNA synthesis program discussed during Todd's comments, referred to as SOLA, offers an excellent opportunity for gross margin accretion. The system would be designed to essentially print the desired oligos for the customer on their benchtop in an automated fashion with low-cost raw materials as the primary input. This represents a big opportunity to improve our margins while also providing customers with ultrafast turnaround times, reduced waste, and an end-to-end solution for their synthetic biology needs.

Moving on, operating expenses were 10.6 million for the third quarter of 2021 compared to 5.2 million for the same period in the prior year. This increase was driven by headcount expansion across our business, primarily in commercial, R&D, and DNA organization. The increased personnel expense relates to sales and marketing efforts, particularly in our European region, increased product development efforts, and hiring of new leadership and professional support staff. Other expense increases included professional services, R&D material costs, facility costs, and insurance costs.

Net loss was 9.8 million for the third quarter of 2021 compared to 4.5 million in the same period in the prior year. Net loss per share was $0.34 for the third quarter of 2021 compared to $0.89 for the corresponding prior-year period. And with that, I will now turn the call back to Todd.

Todd Nelson -- Chief Executive Officer

Thanks, Jen. Before opening the call for questions, I want to review with you several of our pending milestones for our company, including the launch in the fourth quarter of our CleanCap mRNA technology. This will provide us with access to an additional what we estimate to be 50% of the small-scale rapid synthesis market for mRNA. Second, the field deployment during the first half of 2022 of our BioXp 9600 beta units, providing us with access to additional customer segments seeking higher throughput automation solutions, and that which represents the first step toward the commercialization of the BioXp DBC.

We also anticipate advancing during the fourth quarter our corporate development initiatives and the commercial launch of two additional mRNA and one protein kit during the first half of 2022. I also want to thank everyone at Codex DNA for their efforts this past quarter and welcome the Eton employees to the Codex DNA family. We're encouraged by our continued strong commercial execution, the progress of our R&D pipeline, and the acquisition of Eton Bioscience. We continue to invest in talent technology and processes to drive long-term sustainable growth.

We remain grateful to our investors for their support and look forward to working with you to bring great synthetic biology solutions to our planet. And with that, I'll ask the operator to open the call for questions. Thank you.

Questions & Answers:


Thank you. [Operator instructions] First question comes from the line of Brandon Couillard with Jefferies. Your line is now open, you may ask a question.

Brandon Couillard -- Jefferies -- Analyst

Hey, thanks. Good afternoon. Todd, just starting with the third quarter record placements, could you be more specific in terms of a gross number of installations in the period? Any color you can share with us in terms of the mix of new versus existing customers, as well as direct versus distribution channel mix of those placements?

Todd Nelson -- Chief Executive Officer

Yeah. Hey, Brandon. Thanks. Great question.

So I'll try to take those in order and tell you what I can. As far as, you know, the quarter that we experienced, as I mentioned, it was, you know, the best that we've seen in the company's history. And that was both for the instrument and for revenue for the BioXp kits, which nearly doubled. So I think without going into too much of the details, we're happy with that.

I think from a mix perspective, we're starting to see a lot of contribution from the channel that we had established over the course of last year. And I think as you may recall, we mentioned that we've got probably 30 distributors now set up, and we're starting to see significant contributions from the channel and mostly from end users in rest of world and certain parts of Europe where we're not direct. So the channel contributed quite a few units to that. We're seeing, I think, good mix from there.

And fortunately, there are not a lot of demo units. They're more end user customers that we are starting to work with more in rest of world country and in parts of Europe where we're not direct. So sales were up. And, you know, really happy about the volume growth with the BioXp kits.

And again, just the color on that, you know, was driven really by our -- I think the things that people are starting to appreciate in the market are the longer and more complex build capabilities and the contribution of new products introduced in the last period of time. So good solid execution, I think, on the commercial team and contributing -- you know. increased contribution from channel, and a good mix on the reagent side.

Jennifer McNealey -- Chief Financial Officer

And, Brandon, I think you also have new versus existing customers, and they were primarily placed with new customers. In addition, we're very pleased with our geographic mix as well.

Todd Nelson -- Chief Executive Officer

Yeah, sorry. Thanks, Jen. Yeah, Brandon. Sorry about that.

Added quite a few customers during the quarter. I don't think we've really disclosed that, but happy with the number of new customer ads. Lot of new customers and I think really driven by some of the new products we're getting out into the market.

Brandon Couillard -- Jefferies -- Analyst

OK. I appreciate that detail. And then, on the Eton acquisition, couple of questions. Can you just elaborate a little bit more on the types of customers that you think that, you know, you'll be able to access now? And any color in terms of the growth rate in the business and the P&L profile of Eton? And then, as you look to scale up oligo production starting 4Q next year, could you, you know, ballpark numbers around that in terms of the capex investment that might be required for that expansion?

Todd Nelson -- Chief Executive Officer

Yeah. Let me go ahead and take that. And I think I could -- between Jen and I, can go back and forth. So from a customer perspective, highly complementary customer groups, as you know, from our recent placements, we're really targeting and seeing a lot of traction with small to medium-sized biotech customers.

And we're also seeing good traction in larger customers where we're starting with large-cap pharma where we're seeing more than two units placed and things like that. But we're predominantly -- most of our customer base is biotech and pharma. Eton, on the other hand, has a very complementary customer base where they provide services. So during the test cycle, if you will, they do a lot of oligo synthesis and sequencing that is downstream of us but mostly in academic customers.

So one of the things that we're excited about is being able to put some of our BioXp systems as demo units in their various facilities around North America and gaining access to that customer base. We could see ourselves through the bio foundry services also offering a very rapid turnaround in regional areas, whether it's Boston, where they have a facility, New Jersey, San Diego here, or in Research Triangle Park. So highly complementary, I think, customer base where we can go in and cross-sell our products and vice versa. They've got a very large customer base that we think represents a very, very good customer base for potential BioXp customers.

I think the second thing was around oligo production. I'll let Jen kind of handle that. But that'll come up -- you know, that'll ramp up over the course of 2022. We'll be able to offset some of our oligo supply.

The truth of the matter is, we're outstripping, you know, some of the ability for suppliers to meet our demand. So it was really very important for us to do this. That'll start contributing and offsetting in the fourth quarter of 2022. There'll be some capital investments because we have to build these systems.

We have to build about five of the systems that will require some capex. That wasn't in the model before. I think as we get to the end of the year and review AOP, we'll get back to you with, you know, a revision on a pro forma basis of what that would be. But there is some capex to execute against that, but it will eventually accrete significantly to gross margin.

This will be able to reduce our raw materials costs, better supply -- better control of our supply, and quality. And then, the last question, Jen, I'll hand over to you.

Jennifer McNealey -- Chief Financial Officer

Oh, so OK. Yeah. Just historically, for your reference, they -- year to date, their revenue has generated about 5 million in the first nine months 2021. And historically, their gross margins have been in the similar range of ours, and they've been breakeven from a net income perspective.

We've modeled pretty modest growth in the business. And most of the value generations from the [Inaudible] really comes from securing our oligo supply, having higher quality, and delivering better value to our customers. And then, as we ramp up production over time, we expect the deals to be very accretive to gross margins starting in 2023.

Brandon Couillard -- Jefferies -- Analyst

Gotcha, that's helpful. My last one, for you, Jen. Understanding you're not -- you know, without sort of giving explicit guidance, but, you know, any, you know, directional, you know, color you can kind of share with us in terms of how we should think about sequential revenue growth for the base business in the fourth quarter, expected Eton contribution in the fourth quarter, should we expect anything material? And then, should we think about the third quarter opex is kind of the new go-forward run rate from here? Thanks.

Jennifer McNealey -- Chief Financial Officer

Sure. So there are a couple of questions in there. On the fourth quarter, the contributions will be pretty minimal depending on the timing of the deal close. And on, you know, opex, you know, we're not, you know, prepared to give quarterly guidance, but we continue to invest in R&D programs and broadly across the business.

And, you know, we will continue to do that going forward.

Brandon Couillard -- Jefferies -- Analyst

Great. Thank you.


Thank you. [Operator instructions] We have the next question, comes from the line of [Inaudible] with KeyBanc Capital. Your line is now open, you may ask a question.

Unknown speaker

Hey, guys. Thanks for the question. Just following up on Brandon's question, is it fair to say that you guys have exceeded your placements or instrument placements in the first nine months than you did in 2020?

Todd Nelson -- Chief Executive Officer


Jennifer McNealey -- Chief Financial Officer


Unknown speaker

OK. And then, you know, I guess talking to the uptick of mRNA kits since the launch, can you kind of talk to the feedback you received from customers on performance? Any new inquiries as a result of the launch in terms of, you know, placing new instruments to customers that weren't customers before? And then, any uptick in terms of new inquiries as well with specific -- you know, specifically to the TriLink announcement in a licensing deal? And then, you know, do you have any orders for that product already?

Todd Nelson -- Chief Executive Officer

So, hey, Michael. Todd here. Few questions there. Let me take them in reverse order.

So, and generally, just say that for the instruments we sold, I would say we're seeing increased adoption for the mRNA line, which we're pleased to see. So, more than several of the instruments went into workflows, specifically for RNA. And that was both based on the fact that those customers may or may not have -- may or -- were using ARCA or intend to use CleanCap. I don't have a breakdown for you right now, like, what the mix is.

I have to get back to you on whether we're, like, back logging on orders for CleanCap. I just know that that gives us access to, you know, an additional part of the market. We're super pleased with where the technology is. We've been working very closely with our partner on that.

I think the specs are great. And we're really happy that we'll be launching that in the fourth quarter. So I think the key takeaway is, without giving you the exact numbers because I just don't have them in front of me, we had new products for BioXp, new placements and the new customers for mRNA. The CleanCap product, I don't think it was creating backlog yet because we haven't really -- you know, it'll be launched in the fourth quarter.

And I'd have to see if we're taking orders again because I'm not sure if we are, but we have such a pretty good ramp on that. I will say overall that the franchise still continues to be predominantly DNA. And what I think are early days and what could be a very large market for us in mRNA, we're working hard to get there. And I think the CleanCap launch will be part of that.

And then, we've got those two other kits. We will be launching in the first half of 2022, which together collectively as three will give us, I think, very good coverage of this small-scale rapid synthesis market for mRNA.

Unknown speaker

Great. That's helpful. And then, you know, maybe the last one for Dan. I mean, nice to hear some progress on the enzymatic synthesis side.

Seems like you have the chemistry and biology down. Can you kind of talk to the next steps or challenges ahead, you know, to make this a commercial product? And, you know, kind of has this update today accelerated the timeline for the oligo printer? Thanks.

Dan Gibson -- Chief Technology Officer

Yeah, ton of progress that we're super excited about because it really does truly enable the global distributed manufacturing of synthetic biology. So we've made a ton of progress in developing a very robust process for building hundred [Inaudible] going from the library of parts that are pre-manufactured. And really now, it's just about optimizing that process and figuring out the best path forward for turning the overlapping hundred [Inaudible] that we generate through this process into synthetic genes, and at the same time also identifying opportunities to leverage this process in other areas.

Unknown speaker

Great. Thank you for the time today.

Todd Nelson -- Chief Executive Officer

Thank you.


Thank you. I am showing no further question at this time. I would now like to turn the conference back to Mr. Richard Lepke.


Richard Lepke -- Director of Investor Relations

Thank you, Mel, and thank you, all, for participating here in our call today. Please follow up with us if you have any additional questions, and we thank you for your time.


[Operator signoff]

Duration: 35 minutes

Call participants:

Richard Lepke -- Director of Investor Relations

Todd Nelson -- Chief Executive Officer

Jennifer McNealey -- Chief Financial Officer

Brandon Couillard -- Jefferies -- Analyst

Unknown speaker

Dan Gibson -- Chief Technology Officer

More DNAY analysis

All earnings call transcripts