Twist Bioscience (TWST -4.17%) is showing both promise and potential, and investors might want to keep its stock on their radar. In this clip from "Ask Us Anything" on Motley Fool Live, recorded on May 4, Motley Fool contributor Brian Orelli discusses why he added Twist Bioscience to his portfolio and why he sees major opportunity potential for the company long-term.
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Brian Orelli: This might be my second largest or third largest holding. This was an add for me in terms of buying, but this is the money slide for Twist Bioscience. Their claim to fame is that they can make a DNA really cheaply, where normally it would cost $50 per small piece of DNA, that's what an oligo is, and it would cost $50 per small piece of DNA. They can make it for $0.03. So, as a scientist, it allows you to do a whole bunch of different things that you wouldn't be able to do if you got to pay $50 per oligo. So a lot of their business right now is in the synthetic biology space where the synthetic biology companies are buying these oligos to make different proteins and they are able to test, instead of testing, let's say they're able to test 9,600 different variants of their protein to figure out the best possible protein. So, that's obviously a hundredfold increase. The other way it's being used is in sequencing. You need oligos to sequence DNA, so you can sequence DNA a lot easier. You can also use the oligos to concentrate in the place that you want to sequence specifically, and that allows you to lower the cost of sequencing because now you don't have to sequence the entire genome. You can sequence the parts that you want specifically. That helps there. They also help biotech companies develop drugs. They're not actually doing the Phase 1, Phase 2, Phase 3 clinical trials, but they are working before that. The fact that they have this cheap DNA, they can make libraries really cheaply. Then, that allows the biotech companies that they are partnered with to screen the libraries and find the molecules or the antibodies typically that they want to use to test. Previously, they were taking a flat fee. Now they seem to be focused more on downstream. If the company has success, then they have success and they can take royalties on the drugs. They also take milestone payments if it gets through Phase 1, Phase 2, gets approved and different sales milestones. The long-term possibilities here are that you could actually write DNA and use it to store long-term data. Data that you don't need to read, it's not available on the internet, but you need to store it for long term. Right now, that's stored on magnetic tape, but the magnetic tapes degrade over time. So every few years, companies have to transfer their magnetic tapes to a new magnetic tape. While DNA sticks around for years, centuries, and so by writing the DNA onto a chip, and then if you ever need to read it again, you can just go to sequence the DNA. They're still in Beta right now for this but I think this is a huge opportunity.