On November 8, 2023 Eastern Time, synthetic biology company Ginkgo Bioworks (NYSE: DNA, hereinafter referred to as Ginkgo) released its financial performance report for the third quarter of 2023.
(Source: Company website)
According to the company’s official website, Ginkgo’s total revenue in the third quarter of 2023 was $55 million, down from $66 million in the same period last year and a 17% year-on-year decrease, mainly due to the expected decrease in K-12 testing by the biosafety department. As of the end of the third quarter of 2023, Ginkgo’s cash and cash equivalents exceeded $1 billion.
The total revenue in the third quarter was mainly composed of two major business segments: “Cell Engineering” and “Biosafety”. Among them, the Cell Engineering segment brought in $37 million in revenue, a year-on-year increase of 51% compared to the third quarter of 2022; The biosafety sector has brought in 18 million dollars of revenue, with a gross profit rate of 62%. The sector’s revenue has shifted from the school and community COVID-19 detection projects to a more routine model, focusing on long-term biosafety infrastructure. For example, its public health department, Concentric, has continued to expand the global “bio radar network”. At present, it has established partnerships with 14 countries and 9 operating airport projects, And building next-generation biological intelligence functions, including epidemic prediction based on artificial intelligence.
(Source: Company website)
A loss of $286 million was recorded in the third quarter (including $54 million in stock based compensation fees and $96 million in non cash impairment fees related to exiting the Zymergen leasing facility), compared to a loss of $655 million in the same period last year (including $563 million in stock based compensation fees).
The adjusted profit before interest, tax, depreciation, and amortization for the third quarter was $84 million, lower than the same period last year’s $72 million, due to the high operating rate of cell engineering expenses and the expected decrease in biosafety income.
(Source: Company website)
In the third quarter of 2023, Ginkgo added 21 new cell projects to the Foundry platform, a 40% increase from the same period last year, including signing a new multi target RNA drug discovery cooperation agreement with Pfizer. It is reported that the two sides reached a cooperation agreement in September this year, and Pfizer will pay Ginkgo $331 million for three potential projects, including advance payments, research and development fees, as well as commercial milestone payments and subsequent royalties; In return, Pfizer will utilize Ginkgo’s proprietary RNA technology platform to promote the discovery and development of new RNA molecules in priority research areas, while Ginkgo has the right to obtain further potential value through sales concessions.
At the same time, Ginkgo has also established a five-year cloud and artificial intelligence strategic partnership with Google Cloud to develop new large-scale language models for bioengineering applications. It is reported that the two sides reached a cooperation in August this year. The two companies will combine Ginkgo’s biological code library and Google Cloud’s Vertex AI platform to develop a new large-scale language model using ChatGPT as a model for drug discovery and biosafety. Ginkgo will raise over $250 million for the alliance in the next five years, with Google providing up to $56.3 million in funding.
Ginkgo Co founder and CEO Jason Kelly (source: company website)
We continued to expand our customer base and partnership in the third quarter, such as collaborating with Pfizer to promote the discovery and development of new RNA molecules. In addition, we signed a five-year cloud and artificial intelligence strategic partnership with Google Cloud, aiming to deploy and develop new artificial intelligence tools for biology and biosecurity. Our team is working hard to build new, advanced, and biologically compliant languages We are very excited about these collaborations and future opportunities based on the basic model According to Jason Kelly, co-founder and CEO of Ginkgo.
(Source: Company website)
Looking forward to the full year of 2023, based on the performance status in the third quarter and the signing of new collaborations, Ginkgo expects a total revenue of $250 to $260 million in 2023. Ginkgo has adjusted its revenue forecast for cell engineering to $145 to $150 million, including downstream value share revenue of $4 million confirmed to date, and increased its biosafety revenue forecast to $110 million.
Ginkgo has adjusted its cell engineering goal to add 80-85 cell projects on the Foundry platform by 2023. In addition, Ginkgo also signed several technology license evaluation agreements in the third quarter, which are not included in the statistics of cell projects as they do not involve OEM services, although they represent new potential sources of future revenue.
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