Twist Bioscience Corporation (TWST) Q4 2021 Earnings Call Transcript

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Twist Bioscience Corporation (TWST 6.20%)
Q4 2021 Earnings Call
Nov 22, 2021, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day. Welcome to Twist Biosciences Fiscal 2021 Fourth Quarter and Full Year Financial Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded.

I would like to turn the call over to Angela Bitting, SVP of Corporate Affairs and Chief ESG Officer. You may begin.

Angela Bitting -- Senior Vice President of Corporate Affairs and Chief ESG Officer

Thank you, Michelle. Good morning, everyone. I would like to thank all of you for joining us today for Twist Biosciences conference call to review our fiscal 2021 fourth quarter and full year financial results and business progress. We issued our financial results release as well as the press release announcing we entered into an agreement to acquire Abveris this morning, both of which are available at our website at www.twistbBioscience.com.

With me on today's call are Dr. Emily Leproust, CEO and Co-Founder of Twist; and Jim Thorburn, CFO of Twist. Emily will begin with a review of our recent progress and Twist businesses. Jim will report on our financial and operational performance. Emily will come back to discuss our upcoming milestones and direction and then we'll open the call for questions. 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 two weeks.

During today's presentation, we will make 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 press release we issued earlier today, as well as those more fully described in our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on information available to us as of the date hereof and we cannot at this time predict the full extent of the ongoing impact of the COVID-19 pandemic and any resulting business or economic impact. We disclaim any obligation to update any forward-looking statements except as required by law.

With that, I'll now turn the call over to our Chief Executive Officer and Co-Founder, Dr. Emily Leproust.

Emily Leproust -- Chief Executive Officer and Co-Founder

Thank you, Angela, and good morning, everyone. Fiscal 2021 was a defining year for Twist. We diversified our synthetic biology business and expanded our customer base while accelerating our NGS revenue. In parallel, we leaned into biopharma, evolving the company from solely a service provider in this business segment to a partner of choice. In data storage, we continued our enduring progress and are working within the DNA data storage alliance to build market awareness of this novel storage solution. Overall, we've moved from a product specific focus toward moving applications across large and growing end markets.

We have made some important announcements over the last two weeks and will take some time today to talk through the strategic directions of the company as well as the individual pieces fit within our overarching plan. Against the backdrop of a global pandemic, we reported record revenue of $132.3 million for the year, an increase of 47% over fiscal 2020 and we reported $159.5 million in orders, an increase of 37% over fiscal 2020. For the fourth quarter with a tough comp against last year where we had a single large order of $9 million, we reported revenue of $38 million and orders of $45.2 million, an increase of 17% and 6% respectively.

Diving into the specific businesses, I'll start with biopharma. As we announced a definitive agreement to acquire Abveris this morning. Abveris is a privately held antibody design and discovery company focused on individual discovery using a novel mouse platform that conducted many discovery campaigns for partners with about a 70% rate of [Indecipherable] They currently are 90 customers operating today on a fee-for-service model. We see Abveris complementing our synthetic antibody discovery capabilities very nicely. Following the acquisition, the animal-based antibody discovery method and antibody screening technologies will augment our own antibody discovery and optimization capabilities. Importantly, they have an established customer base with six of their discovered antibodies in clinical trials. The company has 35 employees and will continue to operate in the headquarters in Boston following the acquisition and we believe that in fiscal 2023, the Abveris business would be cash flow positive.

Taking a step back to look at our overarching biopharma capabilities. Following the integration of Abveris, we will have three complementary discovery approaches under one umbrella. In the first approach, we have synthetic discovery libraries where Twist has a competitive advantage through our DNA synthesis platform technology. We synthesize [Indecipherable] and screening targets against these libraries can generate robust antibody leads. Second, our proceeds to generate antibodies from an annual immunized with the target and then harvesting and sequencing the resulting antibodies. That is the specialty of Abveris platform. Third, we have entered into technology cooperation's with several companies to leverage artificial intelligence and machine learning technologies to screen through antibody needs and refine antibody levels.

With the acquisition, Twist will have all three approaches offering a unique and comprehensive antibody discovery and optimization capability to our partners as well as while internal antibody generation. In addition, we have products that support the total discovery process. Our oligo pools can be used to identify targets and our NGS tools can be used to [Indecipherable]Twist provide tools to develop the lead further through our SynBio offerings, stopping with gene sensing [Indecipherable] and moving all the way through the resulting IgG proteins. Biopharma as you know, we've been working toward COVID-19 specific [Indecipherable] biopharma process. We've been working hard to put together a team with clinical development and commercialization expertise. And last week, we launched Revelar Biotherapeutics, an independent biopharmaceutical company.

We license our lead bispecific antibody to treat COVID-19 to Revelar and have committed to provide up to $10 million of initial funding. In addition, Revelar can license up up to five additional targets over the course of the next four years. Each program is subject to additional milestones payments and royalties for Twist. While the COVID antibody will not be first in class, we do see the opportunity for [Indecipherable] and two, could be delivered subcutaneously which may offer overall best-in-class molecule. We know that we made the need for therapeutics that effectively treat non-COVID as well as antibody therapeutic with a broad neutralizing capabilities among the emerging science as global vaccination is far from complete and vaccine effectiveness unfortunately appears to be declining over time.

The recent data on oral therapeutics although promise, though they typically need to taken within five days of onset and could have safety concern that may not be seen until more widely taken. On a peer-reviewed publication recently noted that antibody therapeutics also promise to provide long-term protection for immunocompromised patients who don't generate a robust immune response with vaccines. We believe this lead space for antibody therapeutics in the treatment regimen. We expect COVID will become an endemic disease and certainly that it is here to stay. We need the best test to watch for COVID antibodies to put it in the hands of a team experience in clinical development and commercialization and participate in the upside through equity appreciation, potential milestone payments of over $100 million and mid-single digit royalties on any commercial sales.

Revelar expects to begin clinical trial for this antibody in '22 subject to receiving regulatory approvals including other development hurdles. This spin-off fits our internal biopharma philosophy of minimizing biology risk and quickly developing antibody with an improved pharmacological profile that hits the validated target. We expect that Revelar would be a way to for development of up to five additional non-COVID targets emerging from our biopharma platform, each of which come with additional upfront milestone and royalty payments. This allows Twist to participate in the upside of any of the five additional licensed antibodies, while sneak hitting the risk of delinquent through external funding and an experienced management team.

Strategically, for biopharma, we have a vision of what are the initiatives this platform can add to this industry. We have now built to date of 34 partners with 41 active and 32 completed program. Of the 73 total programs, 35 at milestones and/or royalties efficiencies them. We are completing the acquisition of Abveris. We will have more customers and programs coming on board. And through Revelar, we expect to have a treatment within the clinic in '22 pending the required approvals.

Turning to synthetic biology, we reported $14 million in revenues and $20.1 million in orders for the fourth quarter. Over the course of fiscal '21 and looking into fiscal '22, we have evolved our program to enable us to capture more pharmaceutical [Indecipherable] requirements for the large number of customers who make their own DNA. We believe the largest and most impactful application of synthetic biology from both a financial and [Indecipherable] perspective will be healthier and we have seen that within our customer base. We have a growing number of customers needing our genes, oligo pools and libraries. Our customers use these products to link phenotype and genotype and ultimately to gain a deeper understanding of biology for the development of new diagnostics and therapeutics.

During the quarter, we saw some impact from an extraordinary event where we needed to shutdown production for a short period of time during. We determined an unwanted DNA sequences were included in our genes. None of the genes were sold to customers but we did extensive delay in some gene orders. We were able to successfully troubleshoot this issue, clear the resulting backlog within three weeks and still reported robust order and SynBio -- for SynBio in the quarter. We did extensive resequencing [Indecipherable] that we were able to do much more quickly and we believe we have now identified the root cause and do not expect further interruptions in production. Our need for additional capacity and dedicated machines, which we are building currently in effect for the future out side of Portland. At the same time, we have a path to currently increase capacity at our headquarters in the Bay area to ensure we can meet the increasing demand from our customers for the next 12 to 18 months.

We recognize that we not only need to meet the ongoing increasing demand, but also any surge in demand when large in order arise. Today, we have capacity to make approximately 45,000 genes per month plus fragment NGS products and we are building capacity in [Indecipherable] of 8,000 clonal genes per month by December and then 90,000 genes per month by April of '22 to ensure that we continue to meet the need of our customers as as well will bring the factor of th future future online in 2022.

Turning to NGS. We reported revenue of $21.4 million, a record quarter even against the comp in 2020, where we shipped a single $9 million order. We launched several products to build both to our offering, including the Exome 2.0, the most comprehensive Exome offering with best-in-class performance. In addition, we introduced our alliance panel products which are kits with security content from key opinion leader in their respective fields sold through Twist. This quarter, we have launched a robust clinical exome from the Broad and a pan-cancer panel from AnchorDx, building on our first alliance panel with [Indecipherable] panel with content from the Regeneron Genetics Center. We also announced plans to launch panels with Centogene, focused on rare diseases.

For data storage, we achieved a significant milestone under IARPA's Molecular Information Storage or MIST program. IARPA's evaluation team came to Twist in October and provided us with a set of DNA sequence to be sensitized on the 1-micron proof of concept chip in a single day. The sequences were not shared in advance and we passed the test with flying colors. In addition, we confirmed that we can synthesize DNA as individual size on the 1-micron proof of concept chip with no crosstalk or spillover into adjacent sites. This was the critical technology demonstration that validates our ability to achieve smaller dimensions. We are currently in the design phase for the alpha chip, which would be our first full commercial release chip. In the meantime, we will lay the groundwork to sign early access customers. To that end, in October, we hired Steffen Hellmold, previously at Western Digital. With the significant technology advances that we've made in data storage, we are now focused on preparing for early access product launch, laying the foundation for commercialization of the disrupted and important storage solution. Steffen will help define our clinical strategy and leverage relationship, build a carrier in storage to ensure we offer the right product [Indecipherable]

At this time, I'd like to turn the call over to Jim to review our financial results for the quarter.

Jim Thorburn -- Chief Financial Officer

All right. Thank you, Emily. As Emily noted, we had another exciting and dynamic year as we continue to scale our platform and we closed out the year on a strong note. Revenue for the quarter was $38 million, a new record for Twist, which is sequential growth of 9% and year-on-year growth of 17%, and this brings our FY'21 revenue to $132.3 million, a 47% increase from FY'20 and slightly above the top end of our guidance of $129 million to $132 million for the year.

Orders were $45.2 million for the quarter, a sequential increase of 16% and 6% year-over-year. This takes our total orders for the year to approximately $159 million. Gross margin for the fourth quarter was 40.7% and our total year gross margin was 39% as compared to 32% in FY'20. We shipped to approximately 2,900 customers for the year and that's up from 2,200 in FY'20. And we ended the year with cash and short-term investments of approximately $478 million.

Healthcare is now our largest segment and accounts for 54% of our business with revenue of $71.2 million in FY'21 versus $40 million in FY'20, and that's a 78% growth year-on-year, reflecting growth in NGS, biopharma and growing demand for our SynBio products. Industrial chemicals revenue was $34.5 million in FY'21 versus $29.1 million in FY'20. Even though we are operating in a pandemic, where many academic labs were impacted globally. Our academic revenue was $25.3 million versus $19.6 million in FY'20, reflecting our continued focus on growing the long tail. Agriculture revenue was $1.3 million, essentially flat with FY'20.

Now, I will provide more color on orders. We ended on a very strong note with NGS orders for the fourth quarter of $21.8 million, which brings our total NGS orders for the year to approximately $76 million as compared to $53 million in fiscal '20, which is approximately 43% growth year-on-year from a high comp base we referenced earlier. This growth reinforces the robust and growing market opportunity, our expanding product portfolio, investment in our commercial organization, expanding the customer base with increase adoption and increasing NGS applications, including liquid biopsy, MRD, RNA controls and clinical applications.

During the quarter, we received orders from approximately 670 NGS customers and the top 10 accounts placed orders were approximately $10 million as compared to approximately $7 million for the top 10 with previous quarter, confirming we're seeing continued debt diversification of our customer footprint. Our pipeline for larger opportunities continues to scale and we're now tracking 199 accounts and that's up from 182 and noted in our last earnings call, 88 have adopted Twist and that's an increase from 79 on our -- we noted in our last quarter.

Now turning to SynBio, we saw robust growth in our SynBio, which includes genes, DNA preps, IgG, libraries, and oligo pools, which rose to $20.1 million in the fourth quarter, up from $15.7 million in the third quarter of FY'21, which is a sequential growth of 28% and up from $16.1 million in the last quarter of fiscal '20, with healthcare segment being the major driver to growth.

Now to biopharma. We continue to scale our biopharma antibody discovery business as orders rose $11.6 million for the year, which is a growth of 123% compared to $5.2 million in fiscal '20. Orders in the fourth quarter was $3.4 million as we continued to build our pipeline of new and repeat customers. As noted earlier, we have 34 partners with 41 active programs, of which 35 are milestones and royalties. Please note orders may not translate into revenue but do provide a trend line for each product group.

Now moving from orders to revenue. As noted earlier, revenue for the quarter was $38 million and brings our cumulative revenue for fiscal '21 to $132.3 million versus $90.1 million in fiscal '20, representing approximately 47% year-over-year growth. NGS product revenue scaled to $21.4 million in quarter four, a sequential growth of 14% and is notable that we exceeded the $20.2 million for the same quarter of FY'20, which included the $9 million we mentioned earlier. In Q4, the top four customers accounted for approximately 50% of our revenue. For the year, NGS revenue grew from $44 million in FY'20 to $72.7 million, which is 65% growth year-on-year.

Our SynBio product revenues for the quarter was approximately $14 million, and that's down sequentially from $14.3 million in the previous quarter due to the aforementioned production issue and seasonality in Europe. Total annual SynBio is revenue $53 million compared to approximately $44 million or 20% growth year-on-year. Some of the highlights include shipping to 1,900 SynBio customers in FY'21, up from 1,590 in FY'20. Our genes revenue is $39 million and that's an increase from $35.2 million in FY'20. We also shipped a record number of genes of approximately 372,000 and that's an increase from 330,000 we shipped in FY'20. Now to Biopharma. Revenue for the quarter was approximately $2.6 million and full year revenue was $7 million as compared to $2.4 million in FY'20. And during the year we serviced approximately 43 customers, demonstrating the progress we're making in this [Indecipherable] platform.

I will now briefly cover our regional progress for FY'21. Our investments in building out our global commercial organization is reflected in our strong international growth. EMEA had another terrific year with FY'21 revenue of $44.1 million versus $25.8 million and that's 71% growth year-on-year and EMEA now accounts for 33% of our worldwide business. APAC had a great year and FY'21 revenue grew about 100% to $10.3 million from $5.1 million in FY'20. The U.S., which includes revenue of $77.9 million for FY'21 as compared to $59.2 million for FY'20.

Now moving down the P&L. Our gross margin for the quarter was approximately $15.5 million or 40.7% of revenue, up from 40% in the prior quarter. Total year margin was approximately $51.7 million or 39% of revenues, up from 32% in FY'20. Now to operating expenses. Our quarter four operating expenses, which includes R&D and SG&A was $57.7 million. R&D for the quarter of $19.4 million, which brings our total investments in R&D to 69.1 million for FY'21, and that's up from $43 million in FY'20. The major contributors to our investments in R&D were compensation due to higher headcount and external services primarily associated with our investments in DNA storage and also increased investment in biopharma. Our SG&A in quarter four was $38.2 million, which brings our SG&A for the year to $135.9 million as compared to $103.3 million in FY'20. The increases are primarily higher compensation as we continue to build out a commercial organization, increased stock-based compensation, higher fees associated with the orders and investments and addressing our material weaknesses and increased lease expenses as we expanded our footprint in San Francisco and the factory of the future importance in the Portland area.

Our net loss before tax is $41 million for quarter quarter and a the total loss for the year was $152 million, which includes stock-based compensation of $37 million, and depreciation and amortization of $10 million. Capex for the year was $27 million, including $13 million for Wilsonville, mostly for equipment to process and facility improvements. Given the supply -- global supply chain challenges, we have strategically increased our inventory to $32 million compared to $12 million at the end of fiscal 2020. We ended the year with cash and short-term investments of approximately $478 million.

Now to give some updates on our FY'22 guidance. As we noted, we saw strong bookings in quarter four and are optimistic on our opportunities and at the same time, there remains uncertainty associated with the pandemic. For FY'22, our revenue guidance in the range of $173 million to $181 million and including the expected completion of the Abveris acquisition in quarter one of fiscal '22, and revenue guidance increases to $183 million to $193 million. SynBio revenue is estimated to be in the range of $67 million to $70 million as compared to approximately $53 million in fiscal '21. Our NGS guidance is estimated to be in the range of $94 million to $96 million as compared to approximately $73 million in fiscal '21. Biopharma revenue including our anticipated Abveris acquisition is estimated to be approximately $22 million to $27 million as compared to approximately $7 million for fiscal '21.

For the first quarter, we're projecting revenue in a range of 37 to 39 [Phonetic] which we believe is prudent guidance reflecting the upcoming holiday shutdowns in Europe, COVID pressures and the impact of the production issue we discussed earlier on the call. Our fiscal '22 gross margin projection ranges 35% to 37%, which reflects the costs associated with our Wilsonville wrap up. Excluding these costs, gross margin will be 42% to 44%. Operating expenses, which includes R&D and SG&A are expected to be approximately $315 million for fiscal '22 as compared to $205 million in fiscal '21, reflecting increased investments in biopharma of approximately $40 million, data storage $20 million, our commercial organization $20 million and Portland opex [Phonetic] start-up costs of $10 million versus those higher stock-based comp and higher depreciation.

Our R&D expenses for the year is projected to be approximately $130 million, up from $69 million primarily due to investments in digitalization and biopharma. Our net loss guidance for the year is expected to be approximately $215 million. Stock-based comp is projected to be approximately $47 million and depreciation is expected to be $13 million. Our capex for FY'22 is projected to be $80 to $90 million with approximately $75 million investment in Roseville. In summary, we'd like to all the Twisters for delivering another terrific quarter and record growth. We had another exceptional year to execute on our strategy and join broad demand from our customer base and we're significantly stepping up our investment as we continue to tap into new revenue streams.

And with that, I'll now turn the call back to Emily.

Emily Leproust -- Chief Executive Officer and Co-Founder

Thank you. Thank you, Jim. We are accomplishing tremendous amount in fiscal 2021 with execution across all areas of the business. The execution resulted in significant revenue growth and customer acquisition for synthetic biology and NGS, and we continue to see huge opportunities ahead for both markets. With the recent strategic transactions of Abveris, we are well positioned to accelerate our biopharma vertical and in data storage the engineering accomplishments we have achieved to date set the stage for commercial planning and market introduction.

While these four business areas [Indecipherable] very different market opportunities, each relies on our silicon-based DNA synthesis platform, which remains at the core of our competitive differentiation and success. Looking ahead, fiscal 2022 will be a year focused on growing market share as well as investing for future success. In synthetic biology, we plan to continue to build our business and extend our customer base. We expect to launch commercially for pharmaceutical and retail customer base, building on positive feedback from our early access customers. We remain focused on bringing our the factor of the future to reduce turnaround time especially for genes. We're beginning to see the benefit of [Indecipherable] and adoption for SynBio customers who currently make their own DNA in fiscal year 2023 plunge.

For NGS, we expect to continue to grow revenues from our existing products, while expanding our capabilities around RNA and library preparation. We expect to launch a Twist [Indecipherable] product we acquired with the [Indecipherable] transaction this calendar year and we intend to expand our customer base for both SNP microarray conversions and alliance panels. For biopharma, we look forward to seeing our first company in the clinic in 2022 subject to receiving the appropriate clearances. In addition, we intend to sign additional partnerships and add programs as well as pursue opportunities to participate in a greater share of wallet and rapid clinical advancement. We expect to out-license at least one Twist-discovered by mid calendar 2022. For DNA data storage, we intend to continue to drive to early access customers and pilot production. We will continue to execute on IARPA's MIST program milestones and actively advance market resolution for this new storage medium in concert with the DNA data storage aligned.

With that, let's open the call for questions, operator.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Dan Brennan with Cowen. Your line is open.

Dan Brennan -- Cowen -- Analyst

Hey, thanks, thanks for the questions, guys. Maybe just, first one just to start on the impact from the problem cited for SynBio in the quarter. Did you quantify how much that contributed?. And is there anything baked in within your fiscal '22 guidance from that?

Emily Leproust -- Chief Executive Officer and Co-Founder

I'll jump in and maybe Jim will reference here. No, no, we didn't quantify the impact in 2021. We did notice that -- we did that we actually finished very strong, both in revenue and order for the fourth quarter and the headwinds from this issue were included in the Q1 guidance and the fiscal '22 guidance.

Dan Brennan -- Cowen -- Analyst

Okay. And then maybe on the acquisition, looks like around $10 million of $12 million of revenue kind of baked in. I guess maybe first question is how do we think about kind of the -- can you -- can you give us a sense of the growth rate of that business in particular? How do we think about the go forward? I know you've kind of given the sense for fiscal '22 but any sense on -- could you give a little more color on, the customers that they have and the outlook beyond fiscal '22? And then related to that, is there any conflict as you internalize your technology given that Twist is looking to develop its own antibodies. Is there any risk from their own customer, is that they view adverse now competing with them?

Emily Leproust -- Chief Executive Officer and Co-Founder

I'll start with the first part of your question and then I'll let -- I'll start with the second part and I'll let Jim answer the first half. As far as the competition, no, actually its very synergistic. They [Indecipherable] approach, which generates antibody that needs to be humanized and so that goes directly to the Twist platform. There are some targets that don't have -- don't generate immune response even in the hyperimmune [Indecipherable] So that's perfect for the Twist approach [Indecipherable] that want to maximize their heat rate and so if we do both approaches in parallel, it really -- it really adds -- its very complementary and it will enable both platform to build on each other and be synergistic. Jim, you want to comment on the financial question.

Jim Thorburn -- Chief Financial Officer

Yeah. So Dan, yeah the $12 million reflects roughly about 10 months revenue this year. We obviously are working through the integration, obviously optimistic. We anticipate seeing significant revenue growth in that business. So right now we're estimating roughly 30% annualized growth from that base. But obviously, update that as we continue to develop the business with the terrific team from Abveris. One of the advantages, we're adding customers, roughly 90 customers, which is the expanded footprint for SynBio organization as well. And in this world where it's tough to get talent, we're bringing in some some terrific Abveris team, highly talented and really complements what we're doing with our biopharma and SynBio business.

Dan Brennan -- Cowen -- Analyst

Great. And then maybe a final one, just on NGS. Could you speak through the fiscal 2022 guidance maybe some puts and takes? If we were to look back in four months and that number would be higher. What are the key levers included in that, I'd be into to find out kind of how liquid biopsy is kind of impacting the NGS outlook for 2022.

Jim Thorburn -- Chief Financial Officer

Yeah, I mean, we ended on a strong note. Bookings were nearly $22 million. Number of customers we're tracking, large number of customers in our pipeline to grow us almost under 200 now. Definitely seeing opportunity in liquid biopsy, definitely seeing opportunity in MRD. We launched our exome as Emily mentioned, so we're expanding our product portfolio. And then right now we feel we're making prudent guidance for the fiscal '22, where our goal is to continue to invest in commercial organization to continue to get [Indecipherable] service, continue to expand the product portfolio with increase in R&D. So we're optimistic in terms of the long-term opportunity here. I'm sure we're well-positioned working with the lot of of customers.

Dan Brennan -- Cowen -- Analyst

Great. Great, thank you.

Jim Thorburn -- Chief Financial Officer

Okay.

Operator

Our next question comes from Tycho Peterson with J.P. Morgan. Your line is open.

Tycho Peterson -- J.P. Morgan -- Analyst

Hey, good morning. I'm going to start with Wilsonville. I just want to confirm you're reaffirming the kind of mid-year '22 target to open it up to slides 2022. And then as we think about capacity there, I guess, I mean, you're generally short cycle, you're not necessarily pre-booking capacity at this point. But how do we think about your ability to kind of scale that capacity? And Jim, on margins, I know you're talking about 35% to 37% corporate overall. How do we think about the margin impact as the year progresses around Wilsonville as that capacity gets up and running?

Jim Thorburn -- Chief Financial Officer

Yeah, so good question. I'm bringing out Wilsonville. We're starting the initial ramp around our fourth quarter, maybe step back, the overall impact for Wilsonville I'm estimating dollar impact for the year is $25 million, roughly about $10 million is in our opex with G&A estimating toward the back end of the year, we can have both approximately $15 million, adapting to $15 million as we ramp up the facility. So that's been an impact Q4. But if you step back and you just normalize the margin in the 42% to 44% range. I mean, our goal is for Wilsonville to see the opportunity to be able to leverage pricing as well as we address the faster genes. So our goal is to scale that business as quickly as possible. That's why we're investing in the commercial organization.

We've made a lot of our investments in terms of the capital tools, we're starting to hire. And as you can -- as you can tell from the conference call, we are bidding also additional capacity in San Francisco. We're very bullish in terms of numbers and bio customers and also the -- there is uncertainty around the pandemic [Indecipherable] prudent with our outlook.

Tycho Peterson -- J.P. Morgan -- Analyst

Okay, that's helpful. Emily, on data storage, nicely hitting the milestone, proof of concept as you get ready for early access launch. Can you just talk about what's left from a technical perspective before commercial launch and then are there milestones we should be tracking for that business for 2022?

Emily Leproust -- Chief Executive Officer and Co-Founder

Yeah, from a technical perspective, the next step is to keep going down in dimension. So last year we guided that this year we will have the one [Indecipherable] working and we do. So the next step is to keep going down, crosstalk, as we mentioned is the key -- the key technology issue and now we've-we've been able to make it grow from 5-micron and 1-micron and so we are very confident that we understand the physics and the chemistry and how we did to each other and so that's why we have -- we have the confidence to mention that the next super-alpha chip will be also a commercial chip. So we're in the design phase of the alpha chip, next phase would be the production. Next phase after that will be the debugging development of the chip and when that is done, we'll be able to use it with customer in a way similar to what happened this quarter with the MIST program coming to us, those are the sequence I'd like to make. The same thing will happen with our first customer.

In terms of milestones, it's about getting the chip to work, signing early access customers. And as we mentioned in the past, the customers that will we focus on for the alpha release will be customers that are very desperate, frankly to get onto a new storage medium and just to note [Indecipherable] we know that now it's going to be the fourth platform we launched NGS and biopharma. We know that it's important for the first few customer interactions to work in an environment where there is room for back and forth and optimization of the process and to that extent the funnel mold is a great executive addition to the team to make that happen.

Tycho Peterson -- J.P. Morgan -- Analyst

Great. Last one, just on some of the business development updates. I guess first on add risk, did they get downstream economics you mentioned, six antibodies in the clinic. So should we think about that as being additive to kind of the milestones and royalties?

Emily Leproust -- Chief Executive Officer and Co-Founder

No at this point. At this point, the platform is entirely fee for service as we we combine integrated businesses, I think we'll have opportunities potentially to upsize the economic share that we're able to gain.

Tycho Peterson -- J.P. Morgan -- Analyst

And then how are you thinking about the opportunity for Revelar with the spin, I mean obviously the antiviral data from Pfizer and Merck was pretty good around COVID. So how do you think about that in context of your monoclonal antibody opportunity? And that you mentioned, I think five non-COVID programs. Is the risk longer-term that Revelar could ultimately compete with some of your own development efforts on the therapeutic side?

Emily Leproust -- Chief Executive Officer and Co-Founder

Not the way we structure the business, it's unlikely that Revelar will be working on the same targets as we are. And they were, will definitely have the advantage of having starting first. So it's based on logistic and the COVID [Indecipherable] to be in the clinic in 2022, which is great for Twist first [Indecipherable] antibody and we have a great experienced team and the idea is to syndicate the risk by, I think that the worked done at Revelar are supported based on funding. At the same time, as we keep the upside opportunity through equity appreciation and nice upfront milestones and royalties. So it's -- it's very much additive and there is very little risk of working on issues of [Indecipherable] that it is structured.

Tycho Peterson -- J.P. Morgan -- Analyst

Okay, one last one for Jim, before I hop off. You got $465 million or so in cash in the balance sheet, now the burn this year is going to be about $300 million, I think with net loss and capex. Can you just talk on how you're thinking about the balance sheet and potential need to raise more capital?

Jim Thorburn -- Chief Financial Officer

Yeah, want to keep a strong balance sheet. We see lots of opportunity for the company going forward. And as always, I'm conservative [Indecipherable] and we're bringing up Wilsonville here. We're investing data storage. We do see upside in terms of the growth in the business and as we evaluate our opportunities, I'll be making sure we have a strong balance sheet to finance the growth in '23 and '24.

Tycho Peterson -- J.P. Morgan -- Analyst

Sounds good. Thank you.

Operator

Our next question comes from Catherine Schulte with Baird. Your line is open.

Catherine Schulte -- Baird -- Analyst

Hey, thanks for the questions. I guess first maybe just going back to the production issue that you mentioned, what was the root cause there? Did it impact all of your production? And then you mentioned clearing the backlog in three weeks, but also called out that there would be an impact to SynBio revenue both in the fourth and first quarter. So, when did the disruption occur and do you think you lost any customers due to the delays there?

Emily Leproust -- Chief Executive Officer and Co-Founder

Yeah, thank you for the question. So the issue happened in August. As you know, synthesizing gene is actually very difficult, it's many steps with chemistry steps, enzymatic steps [Indecipherable] steps and there was an issue in the combination of regions and hardware. And frankly the issue was compounded by the fact that the Fed was absolutely full. And so part of the issue is, when you add capacity, there is no extra hours in the day 24/7 that you can use. And when you [Indecipherable] actually takes longer than it should to clear the backlog. So that's one of the reason why we are adding capacity in first fiscal. In the meantime, to make sure that when problems do happen we're able to catch it very quickly and make it basically transparent on the customer -- on the customer side.

In terms of losing customers, long term I don't -- I don't think that is necessarily a long-term impact, but it does puts us on the backside as we -- as we start and see the conservative guide for Q1. Now that we actually saw the second time very briefly in October and that really helped us solidify our understanding of the root cause and we believe now that is totally eliminated. It's hard to prove a negative and so only time will tell, but we're very confident in the understanding of scientist getting in assuming what happened and making sure it won't happen again.

Catherine Schulte -- Baird -- Analyst

Okay, got it. Thank you for that color. And then you talked about expecting to have the first Twist-discovered antibody in the clinic in '22 with the COVID treatment from Revelar. What about on the partner side, do you have any indication of how many of those 32 completed programs are advancing and when any of those could advance to the clinic?

Emily Leproust -- Chief Executive Officer and Co-Founder

So we don't have a lot of flexibility -- a lot of visibility on where they are. We have no indication that any of them is not doing for. As far as we know, they will and so we are due in the the notes with this in future for a Twist antibody to be in the clinic and so I don't know if the COVID antibodies will be the first ones, but definitely the COVID antibodies are the ones that we have excellent visibility in them, but at the same time you can see that we report every quarter how many antibodies -- how many programs are completed. The number is increasing quite, quite nicely and so we're just increasing the sort of short-term goals for more Twist antibodies in the clinic.

Catherine Schulte -- Baird -- Analyst

Okay. And then last one for me. If we could just maybe go back to Dan's question on NGS revenue guidance for '22, came in a little bit higher than where we were. So that was great. Can you just parse out what you expect from existing customers ramping their business with you versus new customer wins just as we try to think about the visibility into that number?

Jim Thorburn -- Chief Financial Officer

So, good question. Most most the revenue ramp is going to come from new customers ramping as their assets increase in volume, the tests. We do track the pilots and validation or revenues, but the bulk of our revenue comes from those in production and will expect that to be the same for fiscal '22 and that's what's baked into your forecast. We don't break that as how much is pilot how much validation as yet, but with the growth and the number of customers, Q4 bookings, Q4 orders and the types of assays were designed into we're feeling good about our revenue forecast for the year.

Catherine Schulte -- Baird -- Analyst

Okay, great. Thank you.

Operator

Our next question comes from Vijay Kumar with Evercore ISI. Your line is open.

Vijay Kumar -- Evercore ISI -- Analyst

Hey guys, congrats on the print [Phonetic] and thanks for taking my question. Let me see if I can ask 800 questions on the call to Jim. Maybe starting with your revenue guidance here, ex the acquisition that you guys did, I think the base revenues were 173 to 181 [Phonetic], that's about 30% to 38%. Considering you guys just add 1 north of 45% organic against the tough comp in fiscal '21, is that mid '30s or low to mid '30s, perhaps conservative out, and it seems like NGS growth of 30% against a 65% growth in fiscal '21 seems to be slowing down. How much of this is conservatism versus -- versus any factors that perhaps you might be seeing in the business?

Jim Thorburn -- Chief Financial Officer

Yeah, so in terms of the business, business is going well. We are grousely still in pandemic, you're seeing lockdowns begin to reappear in Europe. We're always, and Vijay we're all fit in our guidance and I want to be thoughtful. The NGS business is going extremely well. The number of large customers continues to scale, order scale. We're investing our commercial organization. We're launching new products. And at the same time, we want to be thoughtful in terms of the guidance. Yes, there is some major wins in our sales in terms of the market opportunities with liquid biopsy MRD, as an example. We're an extremely talented team at Twist in terms of innovative new products. So I think the -- we will obviously update the guidance through the year. But right now we feel good about the [Indecipherable] and in addition to that, I mean the NGS market does continue to improve. And as you see, sequencing costs coming down. So I think there is good opportunity for us in FY'22 and FY'23.

Vijay Kumar -- Evercore ISI -- Analyst

Sticking on to guidance, the Q1 of 38, that's sequentially flattish. Historically you guys have sequentially last year in fiscal '21 if you adjust for the comps, timing of orders, again you were up sequentially. Why is Q1 sequentially flattish and what kind of impact are you baking in from the manufacturing issue? is that a factor in Q1 and should those revenues to be recognized in the back half?

Jim Thorburn -- Chief Financial Officer

While this is three issues. First of all, Europe is higher proportion of our business. Revenue for the year, it was about $44 million. So it scaled significantly from $25 million previous year. So the European Christmas vacations and shutdowns has got higher impact. And also we got to be realistic. We are seeing spikes in COVID pressures around the globe. We're seeing some of that in Asia. We're were reading what's going on in Europe right now and we're trying to calibrate the impacts of production issue and the relief is the guidance is prudent in the $37 million to $39 million range.

Vijay Kumar -- Evercore ISI -- Analyst

Understood. Then one on the free cash flows. Your guidance for net loss of $250 million, that's a massive step up from $150 million in fiscal '21. What is driving this, Jim? I mean, that's a really big step up. Clearly, it looks like you guys have about 470-ish of cash on hand. Is that enough for you guys to breakeven on the cash flow side?

Jim Thorburn -- Chief Financial Officer

We're -- a couple of things, we're stepping up our investments in biopharma. The overall opex is increasing from $205 million this year to $315 million. We we're out investment of biopharma by roughly $40 million, stepping up investments in data storage by $20 million. And we continuing to invest on commercial organization ahead of bringing on Wilsonville and the Wilsonville investment in terms of capex is coming near, is about $75 million. Yes, we're deploying capital. We're deploying capital because we really see the customer demand coming in the future. We've got a great team from innovating, customer base continues to scale. So we are looking at this as a long-term opportunity to invest and scale up in the marketplace.

Vijay Kumar -- Evercore ISI -- Analyst

Got you. And then one last one. You're biopharma guidance of 22 to 27, ex the acquisition rate, we're looking at somewhere between 44 to 50-ishfor the year, that's a pretty healthy doubling up of biopharma revenues, Jim. Is Revelar biotherapeutics a customer of yours? I know you have the equity stake. And if it is, how much of a contributor is that? What is driving biopharma strength?

Jim Thorburn -- Chief Financial Officer

Yeah, there's nothing in that step up assumed for Revelar. We have built up the investment in biopharma over the last year. We're seeing a lot of customers come back. We invested 70 odd percent return rate and this is just based on our continuing to invest in the commercial organization, invest in biopharma, and you're seeing that step-up in growth. There is enormous for antibodies and we've got the platform and they're leveraging our DNA platform, our synthesis platform. So we are seeing significant opportunity hence that's filed with the step-up there.

Vijay Kumar -- Evercore ISI -- Analyst

Understood. Thanks guys.

Jim Thorburn -- Chief Financial Officer

Okay.

Operator

Our next question comes from Puneet Souda with SVB Leerink. Your line is open.

Puneet Souda -- SVB Leerink -- Analyst

Yeah, hi, Emily, Jim. And thanks for taking the question. So I have a bigger question here on biopharma. First, we saw Revelar. Obviously, prior to that you have invested into Twist Biopharma and now Abveris. So just wondering, given that you have all oligos and in libraries you have now DiversimAb model with mouse model. You have -- seems like Abveris is using Berkeley Lights for clone selection and maybe getting some throughput there. But if you could maybe just elaborate at this point in time what else do you need for your biopharma capabilities and essentially antibody discovery capabilities, immunization, High-throughput screening, repertoire validation, maybe an expression scale up maybe, just walk us through what you need at this point or do you have all the components that you are seeking here to build a stronger biopharma antibody discovery business?

Emily Leproust -- Chief Executive Officer and Co-Founder

It's a great question. I think we are pretty much as what we need. As I mentioned, the three big avenues to discover on the antibodies are the Twist approach using synthetic libraries, the [Indecipherable] approach now we have with Abveris and then the machine learning AI approach which we have a number of collaborations ongoing. So we have access to all three tools and we internally we've already optimized depending the sequencing of the head, the reformatting of the antibody [Indecipherable] So we are pretty much set and I think the combination that we have is going to be very powerful and we kind of with comprehensive set of suite to our customer.

Puneet Souda -- SVB Leerink -- Analyst

Okay, that's helpful and then just I'll keep it to two. On supply chain Jim mentioned a couple of things that things seem to be holding well so far. But just wanted to understand in terms of we're hearing quite a bit about plastic plates and pipette tips and other products that might be used in Twist products and delivery of products with multichannel type it, I mean multi-well plates and multichannel pipette and things like that. So maybe just help us understand is there anything that we need to keep in mind there and broadly across supply chains what are some of the things that you're looking at for? Thank you.

Jim Thorburn -- Chief Financial Officer

Well we entered into the pandemic last year. We had the strategy of building into supply chain and we got ahead of the curve. Obviously, we're vigilant in terms of any potential bottlenecks. We did increase our image back to $2 million and it's interesting we did a tour of the facility recently and the feedback was, wow, you guys get lots of tips sitting around. So we've done, so far we've done a good job on keeping ahead of the issues. Obviously, we're seeing demand increase. We've got terrific team in the supply chain that have been delivered in terms of materials. So it's just a matter of keep training through this and executing.

Puneet Souda -- SVB Leerink -- Analyst

Got it. Thanks guys.

Jim Thorburn -- Chief Financial Officer

Okay.

Operator

Our next question comes from Matt Larew with William Blair. Your line is open.

Matt Larew -- William Blair -- Analyst

Yeah, hi, good morning. I just wanted to ask again on gross margins, in terms of pacing throughout the year. So I guess just contemplating coming back from the backlog here in the fiscal first quarter and then factory of the future ramping later in the year. Can you maybe help us with pacing for gross margins throughout the year?

Jim Thorburn -- Chief Financial Officer

Yeah, I mean the, I mean as we bring on the factory of the future, we are going to see increased fixed costs. So we're looking at a total total spend for the factor of the future, it's is roughly around $25 million, of that about $10 million is opex G&A, that $14 million to $15 million, about 14 million actually is going to impact us in the second half of the year. With the -- I think in terms of break it out between Q3 and Q4 is about 30% impact in Q3 of that $14 million and the rest hitting in Q4. So you can build those numbers into your models. But it is just by excluding the factory the feature, we're targeting roughly or we're seeing margins range from 42% to 44%. As we get into the first half of the calendar year, we'll give you more updates on what that cost looks like so you can normalize the margins.

Matt Larew -- William Blair -- Analyst

Okay. And then you mentioned some growing interest within healthcare segment for synthetic biology, sort of just curious if you could discuss that a bit more? And then maybe somewhat relatedly, just give us a sense for what you're seeing in terms of longer and more complex genes in terms of the demand there?

Jim Thorburn -- Chief Financial Officer

Yeah, so in terms of the health0care segment, yeah, so we've grown significantly in healthcare. I mean, it's been-- been the area that we've seen was growth. So what's driving that. So the three factors on the healthcare side. You've got the growth in terms of NGS, you got growth in terms of biopharma. And then on the SynBio side, I mean, so we had lots of questions on the last earnings call that booking -- sequential bookings declined from Q2 to Q3. The bookings did increase from Q3 to Q4. That's driven by predominantly the segment within SynBio. In terms of what does that mean in terms of genes and the gene length. Those tend to be shorter genes. So we've seen switch of our gene activity from last year. We had higher percentage what was longer genes, i.e., more than 1.8 KB this year, maybe we're looking at 1.8 kb non-clonal genes that are accounting for in the last two quarters roughly 70% of our gene volume. What's driving that is the pharma business is driving that.

Matt Larew -- William Blair -- Analyst

Okay, I'll leave it there. Thanks.

Jim Thorburn -- Chief Financial Officer

Okay.

Operator

Our next question comes from Luke Sergott with Barclays. Your line is open.

Luke Sergott -- Barclays -- Analyst

Hi, everybody. Thank you for taking my questions here. Just real quick. Did you guys call out the actual dollar value impact from the shutdown in SynBio in 4Q and what's expected in 1Q?

Jim Thorburn -- Chief Financial Officer

Look, no we didn't. I can tell you just from a sort of cost point of view it was roughly at just under $1 million. The impact of this and that's due to mostly having to do reruns and waste in QI, I mean, obviously we're still working through Q1. The big issues in Q1 is just -- Europe's a higher share of business. We had shutdowns, European vacations coming around Christmas. And we're seeing some hotspots in Asia in terms of COVID and at the same time we're seeing significant demands coming in, in terms of we had really strong caution in orders and we'd rather be prudent at this time of year. We feel good about the growth rates and the annual guidance and want to make sure that we calibrate well for quarter one.

Luke Sergott -- Barclays -- Analyst

Okay, that's helpful. And I guess as I'm thinking about '22 and we're thinking about the NGS tools business, major upside driver I think is a lot of the way their investors are thinking is going to come from the liquid biopsy. Can you give us a sense of how big that business is for you. How we should think about either Gardens new test coming in the early '22 or the AnchorDx in China, how those kinds of feed through?

Jim Thorburn -- Chief Financial Officer

Look we don't, we don't break liquid biopsy. Liquid biopsy is a contributor, mainly we've got close to 200 large customers who we're tracking. We continue to do well in terms of the number of adopted, those have adopted do include liquid biopsy. I mean, our goal here is to build a broad platform because we're seeing more than just liquid biopsy as well MRD, your seeing other NGS type classifications. We had the genomics acquisition going, we got the microarray to NGS conversion. We have potential Regeneron coming back. So our goal here is to keep building the business and count the number of customers, number of applications, but obviously liquid biopsy will contribute. But we're not breaking out the liquid biopsy impact.

Luke Sergott -- Barclays -- Analyst

Yeah, OK. So I just try to get it out here. Lastly on the R&D step up. This is more of just kind of a longer-term idea here, so you guys have the biopharma business, the DNA storage and then the rest of your core business that's looked at, there's kind of the cash driver here. So is there -- give us a sense of how you bucket out that R&D step up? Is that mostly go into the clinical trial work from biopharma? How is that also keeping abreast of the R&D spend for NGS tools so that you guys can continue to accelerate that growth given is smaller business but can be a lot bigger?

Jim Thorburn -- Chief Financial Officer

Yeah, I mean, so your just stepping back looking -- looking at the business. I mean, we are, we are stepping up overall R&D and in the biopharma roughly it will be -- we're increasing an additional $40 million biopharma and $20 million in data storage. So that's about $60 million of the total $130 million. So in terms of the core business and we are investing substantially more than 20% of revenue in that core business and we'll continue to keep -- keep investing in our core business because we are seeing terrific opportunities in terms of NGS as you've outlined. Also we're seeing good opportunities in terms of investing and expanding the SynBio platform as we start to launch our IgG. So I think -- I think we're really balanced in terms of our overall investment, being a $130 million R&D with biopharma opportunities and is highlighted and data storage, yes longer term, but it's becoming more real.

Luke Sergott -- Barclays -- Analyst

All right, thank you.

Operator

There are no further questions. I will turn the call back over to Emily Leproust for any closing remarks.

Emily Leproust -- Chief Executive Officer and Co-Founder

Thank you very much for joining us today. To close the call, I want to personally wish you a wonderful Thanksgiving. We are especially grateful for all the Twisters [Indecipherable] fiscal '21 and now already enthusiastic about the opportunities that lie ahead for Twist in fiscal 2022. Thank you very much.

Operator

[Operator Closing Remarks]

Duration: 70 minutes

Call participants:

Angela Bitting -- Senior Vice President of Corporate Affairs and Chief ESG Officer

Emily Leproust -- Chief Executive Officer and Co-Founder

Jim Thorburn -- Chief Financial Officer

Dan Brennan -- Cowen -- Analyst

Tycho Peterson -- J.P. Morgan -- Analyst

Catherine Schulte -- Baird -- Analyst

Vijay Kumar -- Evercore ISI -- Analyst

Puneet Souda -- SVB Leerink -- Analyst

Matt Larew -- William Blair -- Analyst

Luke Sergott -- Barclays -- Analyst

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