Welcome to Twist Bioscience's fiscal 2021 first quarter financial results conference call. At this time, all participant lines are in listen- only mode, so if you require operator assistance, please press star then zero. After the presentation, there will be a question- and- answer session. To ask a question during the session, you will need to press star then one. Please be advised that today's conference may be recorded. I would now like to turn the conference over to Jim Thorburn, Chief Financial Officer. All right. Thank you, operator. Good afternoon, everyone. I'd like to thank all of you for joining us today for Twist Bioscience conference call to review our fiscal 2021 first quarter financial results and business progress. We did issue our financial results released this afternoon, which is available at our website at www.twistbioscience.com. With me on today's call is Dr. Emily Leproust, CEO and Co-founder of Twist. Emily will begin with a review of our recent progress. I will report on our financial and operational performance. Emily will discuss our upcoming milestones and direction. We will open the call for questions. As a reminder, this call is being recorded. The audio portion will be archived in the investor section of our website and will be available for one week. During today's presentation, we'll 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 in the 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 to date hereof, and we cannot at this time predict the full extent of the 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 will now turn the call over to our Chief Executive Officer and Co-founder, Dr. Emily Leproust. Thank you, Jim. Good afternoon, everyone. In the first quarter of fiscal 2021, we continued to innovate and execute across each of our business areas, including Synthetic Biology, NGS, Biopharma, and Data Storage. We beat our first quarter guidance of $25 million-$26 million with a reported revenue of $28.2 million and showed significant growth of 64% over the first quarter of fiscal 2020 when we reported $17.2 million. That said, this is the first time in 16 quarters that we have not shown quarter-over-quarter growth. This is due primarily to a very large $9 million order last quarter that included about $6 million that came in early according to our expectations. I want to acknowledge that my streak is broken, but for a very good reason, and the business remains strong. Importantly, with the revenue for the quarter, we hit a significant milestone and now have a trailing four-quarter run rate of $100 million. We also posted strong orders for the quarter of $33.6 million. Now, I'd like to dive into the details of each of our four business segments. Beginning with Synthetic Biology, we reported $11.5 million in revenue, a very strong quarter. We see strength across the board for our genes and gene fragments. In addition, over the course of fiscal 2020, we enhanced our product offering specific to two groups of customers, pharmaceutical and biotech companies, and the long tail of the market, customers who order a small number of genes or fragments. For pharma and biotech customers, we introduced large preparation of DNA, something we call prep, and the commercial launch of this product is ramping nicely. We expect additional customers to adopt these products into their drug discovery and optimization pipeline moving forward. In addition, we have several customers using our early access IgG protein, an extension of our product line that also serves pharma and biotech companies. Initial feedback has been very positive, and we are working to increase production and roll the solution out more broadly as we believe it is an innovative and differentiated offering for our customers that are conducting drug discovery and development. We launched our Clonal-Ready Gene Fragment in December 2020 with initial revenue building for this product line. This product will be used for the long tail, specifically for those customers who need a few genes at a time. Often, these are academic customers who make their own genes instead of buying them. Our revenue growth from SynBio is particularly noteworthy in light of Ginkgo being down about $1 million below average. This, again, showcases the resilience of our diversified product portfolio to deliver financial results. Equally important, we expect Ginkgo to meet their yearly minimum. To further gain market share and help scale our revenue to $500 million, we announced that we are building a Factory of the Future just outside of Portland, Oregon. This state-of-the-art site will be the next evolution of our platform, which we expect to produce synthetic DNA products beginning in 2022. We expect our Factory of the Future to bring additional differentiation, including a faster turnaround time for all of our products, to double our current capacity, and to serve as a secondary manufacturing site outside of the Bay Area. Importantly, when it becomes operational, this factory will allow us to pursue customers that we cannot serve today, those who make their own DNA due to timing requirements. In parallel, we are building capabilities with our e-commerce system that facilitate business-to-business interactions. We believe this will expedite order placement and enable us as an approved vendor within purchasing systems. We have been working with several institutions to understand the systems that they use to generate orders, and we have a strategy in place to implement solutions for these systems. While it will take time to develop and deploy within all of our customer institutions, we believe the resulting impact will be substantive. Turning to genomics and targeted NGS, we reported $15.6 million in revenue for the quarter, with NGS revenue exceeding SynBio revenue for the first time. Going forward, we expect these businesses to be about equal, with lumpiness expected quarter to quarter in NGS. Revenue in NGS includes customers in the liquid biopsy space, accounting for a portion of our current revenue, and these customers represent significant potential upside once these products complete clinical trials and are broadly commercialized. This quarter, for example, we received and shipped a $4.5 million order for a liquid biopsy customer conducting studies in preparation for commercial launch. We expect further scaling of their orders when they officially launch their commercial product. We expect a full launch of our methylation solution in the near future, which directly facilitates liquid biopsy customers and we believe this will continue to be an area of growth industry-wide and for Twist. In addition, some of our customers are also pursuing liquid biopsy for minimal residual disease detection, or MRD, in cancer, which we believe will be a large and growing area for the industry as well. We also see significant revenue coming from customers who convert from SNP microarray to using Twist PersonalSeq for genotyping, either for direct-to-consumer or population genetic purposes. Last quarter, we shared that we had a $9 million order from a single customer in a SNP microarray conversion. We can now share that this customer is Regeneron. Using our NGS solution PersonalSeq, Regeneron was able to move away from the defined set of single nucleotide polymorphisms, the so-called SNPs, for its genetics center to conduct genotyping by sequencing. Regeneron has put together a comprehensive, diverse global set of SNPs, which is more efficient and yet more broadly captures genetic diversity globally. With a traditional SNP microarray, the content is fixed. Approximately 80% of those SNPs are specific to the Caucasian population. The change afforded by using genotyping by sequencing enabled by Twist enables the ability to search for disease targets in diverse populations, not just in Caucasian. It could truly change target discovery. It's critical to remember that while public health need is dominated by COVID-19 right now, there are other diseases that require attention. This is an excellent example of how we partner with our customers to improve health. Turning to COVID-19, we announced that the CDC included our SARS-CoV-2 controls in their Flu SC2 test, which screens for influenza A, B, and COVID-19 in one test. As you know, new trends in virus have emerged. We continue to monitor the landscape and the breadth of the science in order to quickly respond to the needs of researchers and diagnostic test providers. For instance, on a very short timeline, we launched synthetic RNA controls covering the B.1.1.7 variant, with other variants to follow. These controls continue to assist researchers and allow test makers to confirm their tests are still accurate and capturing all cases of COVID-19. With the emergence of these variants is a renewed focus on sequencing SARS-CoV-2, the virus that causes COVID-19. We anticipated that need back in March when we launched our targeted enrichment kit for SARS-CoV-2. We believe we can be part of the solution to identify variants moving forward, and that tracking viral evolution and surveillance will be key to public health globally. Turning to Biopharma, we continue to advance work through our partnerships as well as antibodies against internal targets. We signed two technology agreements in January 2021, which we believe will support work for our partners as well as our internal antibody discovery efforts. For Serotiny, we expect to provide custom DNA libraries to encode chimeric antigen receptors, or CAR, and intend to explore novel combinations of receptor domains. Serotiny will engineer and characterize unique CARs to screen for receptor design with improved therapeutic properties that may be applicable to a wide range of solid tumors. We have the right to this technology we obtained from the collaboration. In concert with Applied StemCell, we will add the target CHO cell lines to screen, select, and characterize novel antibodies for both our partners and internal programs, bolstering our in vivo capabilities. We pushed really hard to find partnership agreements by the end of our fiscal year in September 2020. The first quarter of fiscal 2021 was light on orders for Biopharma. However, our funnels remain very full, with several agreements beyond the term sheet stage. As you know, some of those partnerships may not be disclosed due to partner confidentiality. We look forward to sharing our progress as we engage in additional collaborations. To complement our work with partners, we pursue the development of several antibodies to specific therapeutic targets to bolster our data package, demonstrating the value of our platform against a wide range of diseases. We shared at a recent conference that we have identified a potent antibody antagonist, TB206-001, against ADORA2A, an immuno-oncology target in the adenosine pathway that we believe could be an important complement to checkpoint inhibitors. The adenosine pathway is a master checkpoint in the tumor microenvironment, and A2A is highly expressed in lung, colorectal, and prostate tumors. We believe our antibody candidate has the potential to be highly potent, specific, offer improved dosing, and lower central nervous system permeability compared to the small molecules currently in clinical trials. We are pursuing out-licensing opportunities for TB206-001, and while early, we look forward to keeping you apprised of our efforts on this front. We have identified seven key targets for antibody discovery where we believe our Biopharma platform can generate differentiated antibodies. We intend to advance development of these targets through our discovery and optimization platform, continuously moving up the value chain, and we'll be pursuing out-licensing opportunities for these antibodies over the next 18 months. Moving to Data Storage, we continue to advance along our engineering and commercial roadmaps. On the engineering side, we are making progress, but as we have previously disclosed, the chip cycles are long, and we look forward to providing an update when available. On the DNA Data Storage Alliance side, it continues to gain traction, with several more organizations joining, including Quantum. On slide eight of the presentation, we felt it would be useful to talk through a case study of the total cost of ownership for data storage. The total cost of tape or cloud storage increases with time because of required data migration on a five to seven-year timeframe, and this is due to media failure and hardware obsolescence. For data stored in DNA, the total cost over time remains relatively flat due to its inherent long lifespan. Additionally, any copy of tape or cloud storage directly multiplies the cost, while additional copies of DNA are almost free due to the PCR duplication process. What you see on the right side of the slide is a graph showing the total cost of storage of 1 PB over time, created using cost information from the Fujifilm and Amazon websites. The cost of DNA remains relatively flat over time, while the cost of tape or cloud storage increases over time, noting that the time scale is not linear. Lowering the price of DNA below $100 per terabyte, which is the solid light green line, makes DNA the clear choice for long-term storage. Currently, we are working to reduce the price, and we are now below $1,000 per megabyte, with aggressive efforts ongoing. At this time, I'd like to turn the call over to Jim to review our financial results for the quarter. Okay. Thank you, Emily. As Emily noted, we have delivered another very strong quarter in what continues to be an uncertain environment due to the COVID pandemic disruption. We'd like to thank all our investors who supported our recent equity raise as we strengthened our balance sheet to support our growth investments. Revenue for the quarter was $28.2 million, as compared to our guidance of $25 million- $26 million. Additional highlights for the quarter include $33.6 million in orders, with another strong quarter in NGS, including $4.5 million in revenue from one liquid biopsy customer. Our Biopharma business continues to develop strongly, with an additional $1 million in revenue-generating agreements in the first quarter. Gross margin for the first quarter was +35.5%, and we grew our customer base to approximately 1,500 customers. We also signed a lease for our Oregon Factory of the Future and stepped up our investment in DNA storage. We ended the quarter with cash and short-term investments of approximately $587 million. I will provide more details on orders for the first quarter. NGS orders for the first quarter were $17 million, that is growth of 44% year-over-year. This quarter, we also had a $4.5 million order from a liquid biopsy customer, we believe we are very well positioned and excited about the future of population genotyping, liquid biopsy, and the MRD opportunities for Twist. During the December 2020 quarter, we received orders from approximately 570 NGS customers, with the top 10 accounts placing orders of approximately $10 million. As we noted in previous calls, the RNA positive controls are not a material component of our revenue. They contribute to our customer growth, and we're seeing these customers return to purchase other NGS and SynBio products. Our pipeline for our larger opportunities continues to scale, and we're now tracking 160 accounts, which is up from 150 accounts we noted in our last earnings call. 59 have adopted our platform, and that's an increase from 55 last quarter. Turning to SynBio. Just as a note, SynBio includes Ginkgo, our genes, DNA preps, IgG libraries, and Oligo Pools products. Our SynBio orders increased to $15.6 million in our December 2020 quarter, and that's compared to $12.3 million for the December 2019 quarter. Ginkgo orders increased from about $2.6 million to approximately $3.5 million in the first quarter of fiscal 2021. Our genes business is doing well, and total genes grew from approximately $9.5 million in quarter one fiscal 2020 to $12.2 million in our current quarter. Non-Ginkgo genes orders for the quarter were $8.6 million. The year-on-year growth was approximately 26%, with growth in all segments. Oligo Pools orders rose in the quarter to $1.9 million with strong demand, largely coming from gene therapy applications. Biopharma orders in the quarter were $1 million for our antibody discovery activities. We now have a total of 10 partnership agreements, which also includes milestones and/or royalties. That's an increase from eight last quarter. Please note we provide orders not to directly translate into revenue, but more to provide a trend line for each product group. We also anticipate both NGS and Ginkgo orders will fluctuate quarter-to-quarter. Now moving from orders to revenue. Revenue for the quarter was $28.2 million, which is growth of 64% year-over-year. A quarterly sequential decline of 13%. As Emily noted, last quarter, Regeneron placed a $9 million order, with $6 million coming earlier than we anticipated. Having said that, we delivered another outstanding quarter as our NGS products revenue for the quarter climbed to $15.6 million. In the December quarter, we received orders from liquid biopsy customers, including a single $4.5 million order, which we also billed during the quarter. As we noted in our previous calls, our NGS revenue can fluctuate significantly from quarter to quarter based on timing of customer orders and deliveries. Our SynBio product revenue for the first quarter of fiscal 2021 was $11.5 million, up sequentially from $11 million last quarter, and an increase from $10.1 million in quarter one fiscal 2020. This includes Ginkgo, which declined from $2.1 million to $1.4 million sequentially, which we believe was mainly due to the timing of the projects. Our outlook for Ginkgo remains the same as our previous guidance of $11 million-$12 million for the fiscal year. Q1 genes revenue was $8.1 million as compared to $7.8 million in Q1 '20. Although Ginkgo revenue was down, we shipped approximately 84,000 genes in the quarter versus 80,000 genes in the same quarter last year. Our non-Ginkgo growth highlights we continue to make progress in scaling our gene business in pharma and industrial biotech and less reliance on Ginkgo, which accounted for approximately 5% for our Q1 revenue. To Biopharma. Our Biopharma revenue for the quarter was $1 million, that's in upfront services on our antibody discovery projects, including panning, screening, and high- throughput IgG purification. I'll now briefly talk about the regions. All regions recorded year-on-year growth in revenue. U.S. revenue is $17.3 million versus $10 million in the same period last year. EMEA revenue grew to $9.1 million versus $5.9 million in the same period last year and now accounts for approximately 30% of our worldwide business. APAC Q1 revenue was $1.8 million versus $1.2 million for the same period last year. Now for an industrial segment revenue summary. Healthcare is now our largest contributor and accounts for more than 50% of our business, with revenue of $15.9 million, and that's up from $5.8 million same quarter last year. Even though Ginkgo revenue was down this quarter, our industrial biotech revenue rose to $7.1 million in Q1 2021 versus $6.1 million for the same period last year. Academic revenue in the first quarter was $4.9 million, which is flat with Q1 2020. Agricultural revenue was $2 million, the same as the prior year. Now moving down to P&L. Our gross margin for the quarter was $10 million, or 35.5% of revenue as compared to 20% in quarter one of 2020. This increase in margin reflects the impact of scaling our revenue, leveraging our fixed costs, and the benefit of higher mix of NGS products early in the year than anticipated. Also reflects great execution by our organization. Operating expenses, including cost of revenue for the first quarter, increased to approximately $42.8 million. In terms of year-on-year comparison, R&D for the quarter was $14 million compared to $10.3 million in the first quarter of FY 2020, due to investments in Biopharma, Data Storage, as well as continuing investments in SynBio and NGS. Our R&D spend in the quarter is net of $0.3 million received from Georgia Institute of Technology related to the DNA synthesis portion of the MIST program and $0.8 million billed on a confidential project. SG&A increased to $28.8 million compared to $26.4 million, primarily due to investment in our commercial organization. Our net loss for the quarter was $32.9 million, a decline from $55.6 million in the first quarter of fiscal 2020. As a reminder, in the first quarter of fiscal 2020, we had a one-time charge of $22.5 million for our litigation settlement expense. Stock-based comp for Q1 was $7 million and depreciation was $2.2 million. CapEx was approximately $3.6 million in the quarter, with major investments in lab equipment at our South San Francisco facility. Although we signed a lease for the Factory of the Future, we have no material expenditures to date. We ended the quarter with cash and short-term investments of approximately $587 million. I'll briefly update you for the year. We have a very strong start to our fiscal year. At the same time, there's a lot of uncertainty with the pandemic. We're maintaining our 2021 guidance range of $110 million-$118 million for revenue. Ginkgo revenue is estimated to be approximately $11 million-$12 million. Non-Ginkgo SynBio is estimated to be in the range of $41 million-$44 million. NGS revenue is estimated to be in the range of $54 million-$58 million. Our biopharma revenue is estimated to be approximately $4 million. Our gross margin guidance for the year is 32%-34% as compared to 32% on the last guidance. While we had higher gross margins in the first fiscal quarter, we do expect subsequent quarters to be a bit lower, which is influenced by mix and impacted by new capacity utilization as we launch new products such as IgG and scalable DNA preps. Our operating expense, which includes R&D and SG&A, is expected to be approximately $182 million for the year as compared to $174 million in our last projection, which reflects higher stock-based comp charges, primarily due to the increase of our stock price. Our R&D guidance for the year remains at approximately $60 million in fiscal 2021. Our net loss guidance for the year is now expected to be in the range of $142 million-$147 million. Stock-based comp is estimated to be $32 million due to the higher stock price and depreciation, $9 million. CapEx guidance for the year is $30 million, which includes $20 million CapEx for Portland facility, which is $16 million equipment and $4 million for facility construction. In summary, we had a strong start to fiscal 2021. Our outlook is prudent, and our investments at the same time are positioning Twist for very strong growth in fiscal 2022. With that, I'll turn the call back to Emily. Thank you, Jim. In conclusion, we started our fiscal year strong and look forward to an important year ahead. Looking into fiscal 2021, for SynBio, we expect the continued growth and diversification of our revenue stream, a commercial ramp for DNA prep and a production ramp for IgG, marketing push for our Clonal- Ready Gene Fragment, continued focus on B2B solutions to allow us to capture specific multi-site institutions, and preparing the infrastructure and software platform for our Factory of the Future to enable strong growth in 2022 and beyond. For NGS, we expect continued revenue growth and customer ramping production, a full launch of our methylation solution, the technical addition of UMI, and continued conversion of SNP microarrays to Twist sequencing. For biopharma, we fully expect to continue to sign partnerships to expand our technology base and generate revenue while advancing our own internal pipeline of antibodies and pursuing out-licensing opportunities over the next 18 months. For data storage, we will continue to drive our engineering roadmap towards further miniaturization, execute on the IARPA contract, and pave the way for market adoption of this new storage medium. With that, let's open up the call for questions. Operator? Ladies and gentlemen, if you'd like to ask a question at this time, please press the star then the number one key on your touch-tone telephone. To withdraw your question, press the pound key. Our first question comes from the line of Tycho Peterson with JP Morgan. Hey, thanks. This is Eleni on for Tycho. Thanks for taking our questions today. First, wanted to start with guidance. You've left top-line guidance unchanged despite the beat this quarter, but you increased the gross margin guide just to account for the higher margin in the quarter, so essentially leaving the rest of the year the same. Is this just typical conservatism, or is there something else to call out here? It's conservative. We are in the middle of the pandemic. We got off to a really strong start. We see good strengths in SynBio business. We're experiencing good business in Europe and in the U.S. We had a $4.5 million shipment on liquid biopsy. Our NGS business is going strong, SynBio business is going strong. Regionally, we're doing well, and at the same time, we're being conservative. We saw our gross margins increase to 36%, and we feel good about improving our gross margins as we increase our revenue, our longer-term gross margin targets, 55%-60%, and we're on track for that. Just to summarize, we are being conservative and prudent in the middle of the pandemic. Great. That's helpful. Then another question on something you highlighted, the Regeneron SNP conversion. Can you talk a bit more about the line of sight you have to additional SNP conversions over the next couple of quarters and sort of the economic value or framework of how to think about that? Yeah. Thank you. This is Emily. It's a great question. We do know that SNP microarray conversions take some time, because we go after customers that are using microarray, and they have a high volume of samples. In order to get in the door, we need to show that we can be cheaper than the microarray. Nobody will switch if it's more expensive. Now with Regeneron, with Helix, with Ancestry, we have multiple data points that it is the case, so it's easier to get in the door. The next step is, in addition to being cheaper, I feel there are some benefits to using Twist for sequencing, and that is that the content can be evolved. With the microarray, you are stuck with the content. You can't do anything. That is another big positive. In the case of Regeneron, they use that ability to enhance the content and to not be just Caucasian specific, but to be global human genetic diversity. Then the next step is, once the content is defined, is to run. So that also takes a little bit of time, because people have to remove the instrument, bring in the new automation, and bring up the protocol and process at scale. Once you're in, it's a very sticky solution. Yeah, our intention is to keep converting customers. They may not all be the size of Regeneron, but we think that our solution offer a true differentiation compared to the old technology of microarray. Great. Thanks, Emily, that's really helpful. On Biopharma, you've had great traction on signing revenue-generating partnerships. Just wondering if the $4 million you include in guidance is just sort of the initial upfront payments or if there is a component of milestones or royalties that would offer upside to your guide. No, that's a great question. The guidance is only for the upfront payment part. There may be milestones or royalty, but if and when those happens, more like when they happen, that will be upside. At some point, we anticipate that we'll get milestone and/or royalties from the contract we sign, and most likely, the first one to deliver upside will be the contract that we've signed in the past, not just this quarter, knowing that it takes time for us to do the work, and then it takes time for the preclinical work to happen to get to the IND and then to go to the next steps. What we report in orders and revenue is only upfront payments, and any milestones or royalty upside. Great. If I can ask one last question here. How much of the backlog or orders you saw this quarter are COVID related, and how much revenue contribution from COVID is contemplated in your fiscal year 2021 guide? In terms of COVID, COVID's not material. We've had a lot of success with the RNA positive control panels that we've released in the March time period, that's actually grown into the infectious disease panels. We are seeing a lot of new customers. We've added about 500, 600 new customers there, they're actually coming back for additional NGS and SynBio business. In terms of actual COVID revenue, it's not material. What's particularly interesting for us is the increased number of customers and the increased share of wallet we can go after in those customers. That's helpful. Thanks, Jim. Thanks, Emily. Our next question comes from Doug Schenkel with Cowen. Hey, good afternoon, everybody. I actually just want to touch on a few of the important but high-level drivers to long-term growth. Just starting on Next-Gen Sequencing. It's been interesting going back to the IPO, seeing. You talk about the TAM growing there. I think when you first went public, we talked about the NGS TAM maybe being $400 million-$600 million, call it $500 million at the midpoint. Now we're talking about $700 million. I'm just wondering if you could break down what's expanded that. I assume it's things like microarray conversion in other areas, opportunities in liquid biopsy. I'm just wondering what's driven the expansion of the TAM and, are there other opportunities to take it beyond what we're thinking about today? Yeah, thank you, Doug. It's a great question. First, I'll start by saying that we are conservative in our TAM estimation, and that is the dollar that we could touch if we had 100% of the market. It's not aspirational. The increase in the TAM has been mostly driven by the emergence of new application. You mentioned liquid biopsy is definitely a big one. Another one is MRD, minimal residual disease. If you think of MRD alone, there are 15 million cancer patients in the U.S. If they get tested once a year, and the average price is $1,000, that's $15 billion of spend on MRD. Of course, we can't test all of it. We can only test the DNA library prep portion of it. We think that the $700 million that we are estimating today is actually going to increase further, thanks to the emergence of liquid biopsy and MRD. I will note that SNP microarray is not included in that $700 million. We believe there is another $500 million available for SNP microarray conversion. That's great, Emily. Maybe just continuing down the line with questions like this, and kind of high level as we just think about the long term. On drug development, regarding the drug development candidates you have in-house, how are you making the decision on which targets to prioritize? How are they progressing? You noted GPCR previously, and adenosine receptors today. There are other ones you've mentioned in the past. I'm just wondering if you could share any details on how those are progressing. Then I guess the third part of this question is, how should we think about the possibility of essentially drug co-spin-outs over the next 12- 18 months in the absence of other out-licensing opportunities? Yeah, those are two great questions. In 2019, we shared a number of targets that we're working against, and we found a highly functional antibodies against all of them. At the time, we picked those because they were hard to drug, and so we were in the mode of scientific demonstration. That meant that on purpose, we picked really hard targets to show the world that we could do it. Basically, we had to do it to build out the package and get the commercial partnerships that we are getting now. It was more of a claim to fame rather than picking targets because of their business relevance. Now things have changed. Last year, we reported that we've done some work internally and externally to identify seven targets. Those are targets that have business relevance. Those are targets that we believe will be able to generate some commercial interest. The antibodies that we already have, they are available for licensing if needed. If the opportunity is right, it's possible. All the options are open, but there could also be a spin-out of a NewC o, where someone else could bring the capital, where in a sense we will syndicate the risk of moving the antibody forward, in exchange for sharing the economic value. Basically, all the options are available, either for a spin-out or licensing out, whichever is easier, faster, and bring the most economic return for Twist. Okay. That's great, Emily. Last one on Data Storage. It's great to hear about the progress you're making there. I think this has gone from being something that was viewed as an exciting possibility and a source of optionality for the company. Now it seems like you're making enough progress where we can put more confidence in the program actually turning into something, which is great. I'm wondering Could talk a little bit about the partnerships with Microsoft, Illumina and Western Digital. What is each partner bringing to the table, and are there delineated responsibilities between each of those? A second part to the DNA data storage question is, I'm just wondering if some of the improvements that you're making specific to getting to essentially cost targets and speed targets that are associated with making Data Storage commercially feasible would be leverageable for other purposes across your business. Thank you. No, thank you, Doug. Great questions. On the Data Storage Alliance, so we were the spearhead of that alliance, and we were glad that those people joined us. The goal is to create a bigger pie for everybody. In storage, you have to, approach- wise, to have a closed technology. For instance, if you think back to the zip drive of the late 1990s, that was proprietary to one company. Our analysis is that when you do that, when you lock everything in, it's hard to get critical mass, and it can be hard to sustain the momentum. The idea for us was to bring companies together and create a bigger pie. The goal of the Alliance is to work together to define an industry roadmap, to create use cases, and to educate the CIOs of companies such that when products are available those companies have budget and willingness to do pilots and start adopting the technology. The idea of the Alliance is to basically grease the wheels of future commercialization. For us, it was the right time because there's still a lot of work ahead, but we have line of sight that it's working, and that's what I'm going to get there. We want to make sure that when the product is ready, that the commercialization, the go-to-market, has already started. To your second question about potential synergies in speed or cost, there's basically the synergy that all the learning that we've done on our silicon chip to date, all the processes, the internal know-how, we're applying to Data Storage. We are doing much better in terms of developing our Data Storage solutions because we have been spending the last seven years already doing it. There's definitely synergies that way. Going back, while we are not doing it for it, that's not the reason why we're doing Data Storage. I think it's only logical that when you have a team that pushes the boundary of technology, of science, there's likely to be some benefit back to the main business. It's not the main objective. It is the same team that has worked on the initial silicon platform. It's quite logical that there'll be some benefit over time. Fantastic. Thank you again. Thanks, Doug. Our next question comes from the line of Catherine Schulte with Baird. Hi. Thanks for the questions. I guess first, on the liquid biopsy customer placing the large order in the quarter, can you just talk about the commercial launch timing of that product? I can think of one that's talked about using your product with a potential second quarter launch. Maybe that magnitude of an increase you could see if it does move from its clinical trials to commercialization. Thank you, Catherine. Great question. Well, you probably can guess we're not able to comment on who the customer is. I think what we can say is that we have been progressing quite well in liquid biopsy in a number of companies, and it starts with a small order for a pilot, and then a bigger order for validation, and the big order for scale-up. Now we're in the mode of clinical trials, even bigger orders. Our expectation is that once things go commercial the level of need that they would have would keep growing. We are not in charge of the timing. We don't control timing on when those commercial launch happen. What I can say is that, one, we have the capacity. Whenever it happens, we can deliver quickly. As a reminder, in Q4, when the original order came in we were able to very quickly, in the same quarter, make it ship it. We have capacity. We have confidence in our future NGS revenue ramp. However, because those now represent a bigger order, that will create some lumpiness. As there are multiple companies that make lumpy orders, hopefully it will smooth out over time. Okay, that's helpful. Just given the calls for increased sequencing when it comes to monitoring the different COVID variants popping up, how much of an opportunity do you see that as? What kind of uptake are you seeing on your offerings, and how are you thinking about that contributing in the balance of the year? Yeah. In our view, surveillance of the COVID virus is important beyond just the yes or no. The people at the [virus surveillance] think people want to sequence the full virus. That's why we actually were quite early in launching our products. In terms of how that analysis is done for the full virus sequencing, there's two methods to do it. The first one is what we do, which is through hybridization. The second one is using PCR and then sequencing. In full transparency, the PCR approach next, then sequencing is maybe a little bit easier to implement. The results are not as good as we had a seminar yesterday, which I think the recording is available, where our customers compared the two, and the hybridization approach was clearly superior, giving a better coverage of the entire genome. We don't report the exact number, but I can say our approach is superior. We have an RUO kit out in collaboration with Biotia. We are trying to make it as easy as we can for customers to take it. We will report the number as aggregated part of NGS. Like that, it's not something we can, it's not necessary, but the number of them we put together contributes to our overall goal. Okay. Got it. Last one from me, just looking at academic and agriculture, you mentioned both of those were flat in the quarter. Do you think those customers are still being impacted by COVID disruptions? What kind of growth do you expect from those markets going forward? Sorry, Cathy, I missed the first part. Did you talk about academic? Yeah, academic and agriculture. Yeah. Academic, it's interesting in terms of academic. Although, obviously, universities have been slightly impacted by the pandemic. If you look at our revenue, academic has been roughly flat for the last year. That's good news for us because, obviously when the labs actually, when the academic institutions actually start to increase activity, we should see upside there. I'm particularly encouraged by the academic revenue. In terms of agriculture, agricultural has been a small part of our business. I mean, last quarter revenue is $0.2 million. We see opportunities in the future in agriculture. The major opportunities, over the last year, we've executed well in healthcare. We're seeing industrial biotech pick up, and I think that labs will ramp up as the pandemic starts to decline in the next year. Great. Thank you. Okay. Our next question comes from Vijay Kumar with Evercore ISI. Hey, guys. Thanks for taking my question. Jim, maybe one on orders. I want to make sure I understood the numbers correct. The $4.5 million you called out, is that like a one-off or I feel like, last quarter, you guys had the Regeneron order. Is this more of a repeatable feature, or should we be thinking of the $4.5 million as one-off? It's a good question. $4.5 million, Vijay, is in liquid biopsy. I think we're very well positioned in liquid biopsy. We get great product, great solution there. We're working with a number of customers in that area. It is lumpy. I think I would highlight is that we're making great progress in building the NGS pipeline. I mean, revenue for NGS last year was $44 million. We did almost $16 million in Q1. We're very optimistic about the growth in NGS. It's difficult to call when these large orders will actually come in, when we'll ship them. We see growth in NGS this year. I know our guidance is $54 million-$58 million. We believe that's very prudent. We get a good product, and the pipeline of customers keeps increasing. Understood. One last question from my side on the P&L. The gross margin, I guess, did you say it was mix which is going to drag down margins for the back half? Typically, it looks like Q4 is a pretty big gross margin quarter. OpEx looks like it went up on the SG&A side. Maybe some comments on what's driving SG&A. On gross margin, our projection is conservative, being longer-term gross margin targets between 55% and 60%. This first quarter gross margin was 36%. Our last guidance for the year was 32%. We've increased guidance to a range of 32%-34%. As we increase our revenue, we leverage our fixed costs. We are ramping new products, you have a little inefficiency as you ramp the products in terms of underutilized capacity. In terms of OpEx, increase in OpEx is primarily stock-based comp. As you appreciate, the share price has increased a lot during the year, the stock-based comp charge is higher. I'm reflecting that in the increase in our operating expense guidance. On SG&A, Jim? That's SG&A. Stock-based comp increased from 20% to 32%, so that's driving the bulk of the increase in SG&A. Understood. Thank you, guys. Okay. Our next question comes from Puneet Souda with SVB Leerink. Hey, guys. Thanks. First question is on just looking at the orders. If you could walk us through, I appreciate the $4.5 million that you called out, but I believe that was this quarter. Just walk us through the step- down here, the puts and takes to that. Given the sort of one-off orders that you're seeing here, just wanted to get a better sense of the order book. How should we be thinking about the order book for the year? Obviously, in terms of orders, first quarter orders were about $33.6 million. You take off $4.5 million, looking at $29 million. What's notable is that Ginkgo, the orders were $3.5 million. Revenue is $1.4 million. We do expect Ginkgo to pick up significantly in the rest of the year. That's why we called out revenue $11 million- $12 million for the year. In terms of our guidance, I think that's where you're getting at, Puneet. Yes, our guidance is conservative. However, we have taken into account the pandemic. We are seeing very strong bookings. As you noted in NGS, our pipeline NGS continues to grow. We'll see Ginkgo come back in the later half of our fiscal year. We continue to make progress on SynBio. We are conservative in terms of where we think the academic institutions are at. In terms of the overall $110 million-$118 million, we thought it was prudent to leave the revenue guidance in place and increase the gross margin, which reflects a higher gross margin in quarter one. Puneet, to build on what Jim said, I'm not sure I would characterize it as a one-off order. We highlight it because it's a significant next step in our liquid biopsy support as this customer goes into clinical trials. This is not the first order from this customer, and I don't expect it to be the last either. It just is the next step of as we will go through clinical trials, we need more, and then once we go to commercial launch, we anticipate that they will need even more than that. Okay. That's helpful. Within that context, if you can just help me understand. Last quarter, $9 million, $4.5 million this quarter. If we think about this sort of lumpiness continuing through the year, maybe just walk us through how much of these such orders are baked into the full-year guide. If you can just walk us through maybe how much of liquid biopsy are you baking into the full-year guide and how much of the $9 million order that came last quarter are you baking into the guide for the full year? The $9 million for last quarter, we actually shipped in quarter four. In terms of the way we build up the $54 million-$58 million, it didn't include the $4.5 million for liquid biopsy customer. We build it up by customer. We don't actually break it out by segment. As you know, we've got about 160 large customers we're tracking. They continue to give us their projections. We're working closely with them. We're pretty conservative in terms of the way we build up the guidance. We don't break it out by segment, i.e., we don't break it out by liquid biopsy, as an example. Okay. It appears that these orders are becoming routine rather than, as Emily pointed out, they're not really one-off. I just wanted to get a sense of those are the types of orders you're continuing to expect through the year, and are they baked into the guidance or not? To a certain extent, the base case guidance of $54 million-$58 million. What I'm trying to get across, Puneet, is we do track our key customers, and we are conservative in terms of our projections. We've grown the NGS business from $3 million to $21 million to $44 million, and we had almost $16 million in the first quarter of this year. Our expectation is we're going to continue to do well. However, it's very difficult to predict quarter- to- quarter, but year-over-year, we anticipate good, strong growth in NGS. Got it. On biopharma, it appears that obviously you were working on mAbs and now you're doing cell therapy products. It's good to see the progress on that front. Just help me understand how should the sort of the cadence of those new project adds should be through the year, sort of how many projects are you baking into the guide for the full year? Again, also, when should we expect to see the first clinical phase I entry of a product? What's your line of sight on the 10+ projects that you have so far? Thank you, Puneet. We were not guided on timing for when we will have a first recent study in the clinic. Definitely, it is a very important milestone for us, but we are not in control of that timing because we end at the pre-clinical development and then the company takes over, the partner takes over. That is why last year we were focusing on having as many partners as possible, because having more shots on goals get us there sooner. So one of those 13 last year will get there first. We do not know who. But it is great to have many shots on goals. As far as your first question, I think you were asking about how many new partnerships we are expecting. We have not guided this year on the number of partnerships, we have guided on a high [total] dollar amount for the upfront payment. I'm quite encouraged by how soon the funnel is. Those kind of partnerships are not like selling a kit. You can't close it in a week or in a month. It has a slightly longer development time. We are past the term sheet stage for many of them. Okay, great. If I could squeeze in the last one on Data Storage, since you've talked about that quite a bit. When do you think that could be a material revenue for Twist? It appears that there are stability studies that you have to do with DNA, and also redundancy has to be built out into the storage systems and whatnot in order to do so. When can we see such trials, when can we see data from such trials? Potentially when can we see material revenue for Twist longer term? Thank you so much. Yeah. We've done many demonstrations by now. We've done demonstrations for years with Microsoft. We've demonstrated Festival, with United Nations lately, now in Q4 with Netflix. I don't think we have much more to demonstrate that DNA is stable. The DNA capsule that we use, they are peer-reviewed, and where the DNA is stable for the equivalent of 100,000 years or more. I don't think there's a lot to demonstrate in terms of stability. That is pretty baked in. What we have to do for us is go through the technology cycles. We've guided that we will have our 1-micron chip working this year, and that we will have the next and final chip that we need, the 115-micron chip in hand in 2022. It's not one month away, but now we're thinking in terms of quarters to get to a commercial launch and to get to prototype production. Okay, thanks guys. That concludes today's question- and- answer session. I'd like to turn the call back to Dr. Leproust for closing remarks. Thank you very much for everybody for staying on a little bit beyond the schedule. It's a really exciting time to be empowering our customers to improve health and sustainability. With healthcare under the microscope and elevated through the COVID-19 pandemic, we are proud to continue to innovate and execute and applying our DNA synthesis platform to write the future of healthcare, diagnostics, sustainable chemicals, sustainable materials, ag bio and Data Storage. With that, we look forward to sharing with you our progress in the month ahead. Thank you so much for your attention. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.