Running head: Twist Bioscience 1

Twist Bioscience, Tangled Biology

Deborah Balmilero

Arizona State University

OGL 260, Module 3

July 18, 2021

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Twist Bioscience, Tangled Biology

Deoxyribonucleic Acid, or DNA found in all living things creates sequence patterns that

transmit instructions for how they live and grow. Scientists have found ways to make synthetic

DNA that can be replicated and utilized in experiments to solve the questions of many things

including vaccine production or high density storage (Cumbers, 2020). Twist Bioscience

Corporation, incorporated in Delaware in 2013, has its main headquarters in San Francisco,

California and started their enterprise with an initial offering amount of $9,010,714 (Twist

Bioscience Corp., 2013). This company specializes in the creation of synthetic DNA with the

use of a proprietary semiconductor based silicon platform (Twist Bioscience, 2021) that allows

for the ability to replicate DNA on a larger scale for clients to use in their experiments.

Twist Bioscience became a publicly traded company in October of 2018 on the

NASDAQ Global Select Market under the ticker symbol TWST (Bitting, 2018) at $14.00 per

share. Their product lineup includes Clonal Genes, Gene Fragments, Oligo Pools (DNA

strands), NGS (Next generation sequencing), Variant Libraries, Antibodies, SARS-CoV-2 Tools,

and DNA Data Storage (Twist Bioscience HQ, n.d.). Their products are used in many fields

including healthcare, chemicals for industrial use, agricultural use, as well as academic research.

Twist Bioscience is governed by a Board of Directors and several committees including

an audit committee, a compensation committee, and a nominating and corporate governance

committee. The Board of Directors consists of various industry leaders as well as the CEO and

Senior Vice President of Twist, Emily Leproust and Bill Banyai, respectively. No Board

meeting minutes have been published online and made available for public review to examine

details of company decisions. However, review of the Quarterly Report, Form 10-Q, ending
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March 31, 2021 and through a report given the shareholders in a webcast provides a review of

the current activities and financial status of the company. The highlights include revenues of

$59.4 million for the first quarter of the fiscal year and $31.2 million for the second quarter

ending April 2021, which is a 62% growth over fiscal year 2020, second quarter (Twist

Bioscience, 2021). According to their financial report, a net loss was reported at 37.9 million, or

$0.78 per share, compared to $31.8 million, or $0.85 per share, for the second quarter of fiscal

2020. As of March 31, 2021, Twist had $555.7 million in cash, cash equivalents and short-term

investments, compared to $290,002 million at the close of fiscal year 2020 in September.

Further review of the unaudited condensed consolidated financial statements indicate that

as of March 31, 2021 had cash flows in the amount of $400,859 million. Significant notes on the

funds Twist current has, include an unsecured loan by a privately held company for $5 million

with an interest rate of 4% that was scheduled for repayment by May 31, 2021 in cash or

preferred shared if the company has an equity financing round (Twist Bioscience, 2021). In

2020, a litigation settlement was reached with Agilent Technologies for $22,500 (Twist

Bioscience, 2021).

The Board of Directors provides an equity program for executive officers and senior level

employees of performance-based stock (PSU) based on the success of the company. As of

March 21, 2021, the unrecognized compensation was $8 million based on the weighted average

fair value of the share at $45.01. The rate at closing on July 16, 2021 was $112.11, which was a

decrease from the open rate of $114.00, with a volume of 317,979 (Twist Bioscience, 2021).

This is in comparison to the closing rate on January 1, 2021 of $164.54. Upon review of the

returns in the NASDAQ for TWST and the composite rate, if I were to have invested in this

stock, I would have lost money. However, if I had invested in the Nasdaq composite, the same
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amount as the Twist stock, I would have just about doubled my money. The TWST stock shows

over this period a negative 100.6% holding rate of return (Keown, Martin, & Petty, 2020. P.

208). In comparison, the NASDAQ Composite holding rate of return at 96.81%.

TWST
Nasdaq
Date Price Returns 1+Returns Returns 1+Returns
11/1/2018 $26.46 $7,330.54
12/1/2018 $23.09 -12.74% =(B3-B2)/B2 87.26% =1+C3 $6,635.28 -9.48% $6,636.28
1/1/2019 $23.13 0.17% 100.17% $7,281.74 9.74% $7,282.74
2/1/2019 $21.77 -5.88% 94.12% $7,532.53 3.44% $7,533.53
3/1/2019 $23.18 6.48% 106.48% $7,729.32 2.61% $7,730.32
4/1/2019 $23.66 2.07% 102.07% $8,095.39 4.74% $8,096.39
5/1/2019 $25.81 9.09% 109.09% $7,453.15 -7.93% $7,454.15
6/1/2019 $29.01 12.40% 112.40% $8,006.24 7.42% $8,007.24
7/1/2019 $33.72 16.24% 116.24% $8,175.42 2.11% $8,176.42
8/1/2019 $29.03 -13.91% 86.09% $7,962.88 -2.60% $7,963.88
9/1/2019 $23.88 -17.74% 82.26% $7,999.34 0.46% $8,000.34
10/1/2019 $23.82 -0.25% 99.75% $8,292.36 3.66% $8,293.36
11/1/2019 $23.83 0.04% 100.04% $8,665.47 4.50% $8,666.47
12/1/2019 $21.00 -11.88% 88.12% $8,972.60 3.54% $8,973.60
1/1/2020 $24.84 18.29% 118.29% $9,150.94 1.99% $9,151.94
2/1/2020 $30.62 23.27% 123.27% $8,567.37 -6.38% $8,568.37
3/1/2020 $30.58 -0.13% 99.87% $7,700.10 -10.12% $7,701.10
4/1/2020 $32.71 6.97% 106.97% $8,889.55 15.45% $8,890.55
5/1/2020 $37.95 16.02% 116.02% $9,489.87 6.75% $9,490.87
6/1/2020 $45.30 19.37% 119.37% $10,058.77 5.99% $10,059.77
7/1/2020 $56.04 23.71% 123.71% $10,745.27 6.82% $10,746.27
8/1/2020 $69.93 24.79% 124.79% $11,775.46 9.59% $11,776.46
9/1/2020 $75.97 8.64% 108.64% $11,167.51 -5.16% $11,168.51
10/1/2020 $76.64 0.88% 100.88% $10,911.59 -2.29% $10,912.59
11/1/2020 $111.74 45.80% 145.80% $12,198.74 11.80% $12,199.74
12/1/2020 $141.29 26.45% 126.45% $12,888.28 5.65% $12,889.28
1/1/2021 $164.54 16.46% 116.46% $13,070.69 1.42% $13,071.69
2/1/2021 $137.64 -16.35% 83.65% $13,192.35 0.93% $13,193.35
3/1/2021 $123.86 -10.01% 89.99% $13,246.87 0.41% $13,247.87
4/1/2021 $134.19 8.34% 108.34% $13,962.68 5.40% $13,963.68
5/1/2021 $107.31 -20.03% 79.97% $13,748.74 -1.53% $13,749.74
6/1/2021 $133.25 24.17% 124.17% $14,503.95 5.49% $14,504.95
7/1/2021 $111.96 -15.98% 84.02% $14,427.24 -0.53% $14,428.24
Average Monthly And =AVERAGE(C 1007805.28%
Annual Returns 5.77% 3:C34)
Annual Average Returns 96.10% =(1+C36)^12-1 ############
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Geometric Monthly Mean =GEOMEAN(E 979766.57%

Return 4.61% 3:E34)-1
=STDEV.S(C3:
Monthly Standard Deviation 0.159428 C34) 2472.593519
Monthly Risk Free Rate 0.25% 0.25%
Sharp Ratio Using 0.002456
4.075902594
as Monthly Risk Free Rate 0.346682 =(C36-C40)/C39
Holding Period Return -100.60% =C34/B2-1 96.81%
Capital Investment
$1,000
in 2018
Value of $1,000 Invested in
$1,968.10
2018 in 2021 -$6.04 =B43*(1+C42)

When reviewing comments from various stock analysts, it’s interesting to note that this

stock, while of interest to those following bioscience events, can’t seem to agree on which way

this stock will go. Each time there is a stock trade that occurs, it is recorded for public record

and the detail to note is that the last eight transactions have been to divest shares (Solis, 2021).

In particular, the shares being divested are either being changed from common stock into

preferred stock by Board Members or divested completely, and it appears to increase their cash

holdings. It is also important to note that this company is spending its cash on further acquisition

of companies that will enhance their product line or may advance their research (Solis, 2021).

Corporate releases indicate that the acquisition of iGenomX for $35 million, with a

$500,000 cash payment and $29.5 million in stock will have minimal effects on revenue for the

next two years and have the potential for revenue of approximately $4-6 million in 2023 (Bitting,

2021). Tip Ranks Analyst Doug Schenkel has listed TWST as a buy three times over the course

of the last year (Schenkel, 2021). Steven Mah has listed TWST as a buy twice in the last three

months (Mah, 2021). Matt Larew, also of Tip Ranks listed TWST as a buy just nineteen days

ago (Larew, 2021) and Matthew Sykes from the same website, lists TWST as a hold in the last

month. News Editor Dulan Lokuwithana of the Seeking alpha website notes that Twist
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Bioscience stock seems to be reaching its highest level since April 2021 with the company stock

performing at three times the level they were at a year ago (Lokuwithana, 2021).

While Twist Bioscience may be a stock to consider in my portfolio, I would err on the

side of caution and consider this a long term type of investment as part of a larger portfolio

(Keown, Martin, & Petty, 2020, p. 211). As I look at the standard deviation for this stock at an

average of 15%, I am not sure that this is a wise investment of my funds, given my position

towards retirement. However, if I were to feel the need to invest my money, I would get a better

rate of return by investing in the NASDAQ composite.

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References

Bitting, A. (2018, October 31). Twist Bioscience Corporation Announces Pricing of Initial

Public Offering. Retrieved from Business Wire:

https://www.businesswire.com/news/home/20181030006209/en/

Bitting, A. (2021, June 30). Twist Bioscience Acquires NGS Library Preparation Maker

iGenomX. Business Wire. Retrieved from

https://www.businesswire.com/news/home/20210630005264/en/

Cumbers, J. (2020, June 23). A New Way Of Making DNA Is About To Revolutionize The Biotech

Industry. Retrieved from Forbes:

https://www.forbes.com/sites/johncumbers/2020/06/23/a-new-way-of-making-dna-is-

about-to-revolutionize-the-biotech-industry/?sh=605fbd2749ff

Greenfieldboyce, N. (2019, September 24). As Made-To-Order DNA Gets Cheaper, Keeping It

Out Of The Wrong Hands Gets Harder. Retrieved from NPR Policy-ish:

https://www.npr.org/sections/health-shots/2019/09/24/762834987/as-made-to-order-dna-

gets-cheaper-keeping-it-out-of-the-wrong-hands-gets-harder

Keown, A., Martin, J., & Petty, J. (2020). Foundations of Finance, 10e. Pearson Education, Inc.

Larew, M. (2021, July 17). Matt Larew's. Retrieved from TipRanks:

https://www.tipranks.com/analysts/matt-larew

Lokuwithana, D. (2021, June 29). Twist Bioscience continues momentum even as bullish

prospects wane. Seeking Alpha. Retrieved from

https://seekingalpha.com/symbol/TWST?source=content_type%3Areact%7Csection%3A

main_content%7Csection_asset%3Ameta%7Cfirst_level_url%3Anews%7Csymbol%3A

TWST
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Mah, S. (2021, July 17). Steven Mah's Stock Coverage. Retrieved from TipRanks:

https://www.tipranks.com/analysts/steven-mah

Schenkel, D. (2021, July 17). Doug Schenkel's. Retrieved from TipRanks:

https://www.tipranks.com/analysts/doug-schenkel

Solis, W. (2021, June 30). Form 8-K. Retrieved from Twist Bioscience:

https://investors.twistbioscience.com/static-files/954ffe34-4bd0-48a9-b20b-

aa1ad066b8f3

Solis, W. (2021, July 1). Form 4, Statement of Beneficial Ownership. Retrieved from Twist

Bioscience: https://investors.twistbioscience.com/static-files/0d44a220-6729-40ef-b2f2-

f2117636dfd5

Sykes, M. (2021, July 17). Matthew Sykes's. Retrieved from TipRanks:

https://www.tipranks.com/analysts/matthew-sykes

Twist Bioscience. (2021, July 16). Stock Quote. Retrieved from Twist Bioscience:

https://investors.twistbioscience.com/stock-information/stock-quote-chart

Twist Bioscience. (2021). Technology. Retrieved from Twist Bioscience:

https://www.twistbioscience.com/technology

Twist Bioscience. (2021, May 6). TWST Fiscal 2021 2Q Financial Results. Retrieved from Twist

Bioscience: https://investors.twistbioscience.com/static-files/a5d90a8e-fb92-49a2-91f0-

5070d31ba4fb

Twist Bioscience Corp. (2013, July 11). Notice of Exempt Offering of Securities. Retrieved from

Twist Bioscience: https://investors.twistbioscience.com/node/9921/html

Twist Bioscience HQ. (n.d.). The Easy Way to Order DNA. Retrieved July 17, 2021, from Twist

Bioscience: https://www.twistbioscience.com/twist-ordering-platform
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