Company Overview - Ginkgo Bioworks Holdings, Inc. (DNA) shares increased by 18.9% to close at $11.25, with a notable trading volume compared to typical sessions, and a total gain of 36.1% over the past four weeks [1][2] Investor Sentiment - The surge in stock price is linked to positive investor expectations regarding Ginkgo's proprietary cell programming platforms, Foundry and Codebase, which are utilized in R&D services under collaboration and license agreements [2] Financial Performance Expectations - The company is projected to report a quarterly loss of $1.44 per share, reflecting a year-over-year increase of 55%, while revenues are expected to be $43 million, down 23.5% from the previous year [3] - The consensus EPS estimate for the quarter has been revised 12.1% lower over the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [4] Industry Context - Ginkgo Bioworks is part of the Zacks Medical - Biomedical and Genetics industry, where Novavax (NVAX) has seen a decline of 1.1% to $6.3, with a return of -13.2% over the past month [5] - Novavax's consensus EPS estimate has decreased by 46.9% over the past month to -$0.12, representing a year-over-year change of -112.1% [6]

Core Insights - Anne Wojcicki is set to regain control of 23andMe after a $305 million bid from a nonprofit she controls, surpassing Regeneron Pharmaceuticals' previous offer of $256 million in a bankruptcy auction [1][2] - The deal is expected to close soon, pending a court hearing scheduled for June 17 [1] - 23andMe filed for bankruptcy in March due to declining demand and a data breach in 2023 that compromised sensitive customer information [2][6] Company Developments - 23andMe's bankruptcy filing was a result of a significant decline in consumer demand for DNA testing services [2][6] - The company faced legal challenges, with New York and over two dozen other states suing to contest the sale of its customers' private information [3] - TTAM Research Institute, associated with Wojcicki, has committed to upholding 23andMe's existing privacy policies and complying with data protection laws [2] Competitive Landscape - Regeneron Pharmaceuticals initially offered $256 million for 23andMe, which was later outbid by Wojcicki's nonprofit [1][5] - Regeneron expressed willingness to make a new bid but requested a $10 million breakup fee if Wojcicki's bid is accepted [5]

Core Viewpoint - Acurx Pharmaceuticals is advancing its lead antibiotic candidate, ibezapolstat, to pivotal Phase 3 clinical trials for the treatment of Clostridioides difficile infection (CDI), with promising results from previous trials indicating high efficacy and safety [2][11][15]. Group 1: Company Overview - Acurx Pharmaceuticals is a late-stage biopharmaceutical company focused on developing a new class of small molecule antibiotics targeting difficult-to-treat bacterial infections, particularly those caused by Gram-positive bacteria [23]. - The company's lead product candidate, ibezapolstat, is a DNA polymerase IIIC inhibitor designed to treat CDI and has received FDA QIDP and Fast-Track designations [2][19]. - Acurx's research and development pipeline includes antibiotic candidates targeting various multi-drug resistant bacteria, including MRSA and VRE [23]. Group 2: Clinical Trial Progress - Ibezapolstat is ready to advance to international pivotal Phase 3 clinical trials, following positive outcomes from Phase 2 trials, which demonstrated a Clinical Cure rate of 96% [2][15][16]. - The Phase 2 clinical trial included a multicenter, open-label segment and a double-blind, randomized segment, with a total of 42 patients treated for CDI [13][14]. - The Phase 2b trial showed that ibezapolstat-treated patients had a higher sustained clinical cure rate compared to those treated with vancomycin, indicating its potential superiority [16][17]. Group 3: Scientific Collaboration and Research - Acurx's research is conducted in collaboration with Leiden University Medical Center, focusing on the structural biology of DNA pol IIIC and its inhibitors, which has implications for developing new antibiotics [1][4][10]. - The unique conformation of ibezapolstat and its analogues suggests a conserved mechanism of action across Gram-positive bacteria, enhancing the understanding of its selectivity and efficacy [3][4]. - Ongoing research aims to elucidate the structure of pol IIIC from multidrug-resistant organisms, which will guide the rational design of new inhibitors [6][7]. Group 4: Market Need and Impact - CDI is a significant healthcare issue, with estimates of 500,000 infections annually in the U.S. and a mortality rate of approximately 9.3%, highlighting the urgent need for new treatment options [20]. - The CDC has classified CDI as an urgent threat, underscoring the importance of developing effective antibiotics like ibezapolstat to combat antimicrobial resistance [19][20]. - Ibezapolstat's mechanism of maintaining a healthy gut microbiome while treating CDI may reduce the likelihood of recurrence, addressing a critical gap in current treatment options [17][22].

Core Viewpoint - Ginkgo Bioworks announces the resignation of CFO Mark Dmytruk, effective May 30, 2025, with Steven Coen appointed as the new CFO, highlighting a leadership transition aimed at continuing the company's financial strategy and goals [1][3]. Company Leadership Transition - Mark Dmytruk will resign to pursue another opportunity, and Steven Coen, who joined Ginkgo on May 1, 2023, will take over as CFO [1][2]. - Coen brings over 30 years of experience in public accounting and corporate finance, previously serving as Corporate Vice President and Corporate Controller at Charles River Laboratories, which has annual revenues of approximately $4.0 billion [2]. Financial Strategy and Goals - Coen expressed confidence in continuing the financial vision established by Dmytruk, focusing on cost reduction targets and achieving Adjusted EBITDA breakeven by the end of 2026 [3]. - Dmytruk acknowledged the high-performing finance organization he built and expressed confidence in Coen and the finance team to advance the company's financial objectives [3]. Company Overview - Ginkgo Bioworks is a leading platform for cell programming, providing services across various markets, including food, agriculture, pharmaceuticals, and biosecurity [4].

Core Insights - Regeneron Pharmaceuticals is acquiring the assets of 23andMe for $256 million, which includes its personal genome service, total health, research services, and biobank of genetic samples [1] - 23andMe will continue to provide consumer genome services post-acquisition [1] Group 1: Acquisition Details - The acquisition aims to enhance 23andMe's mission of helping individuals understand their DNA and improve personal health, while also supporting Regeneron's genetic research initiatives [2] - The deal is expected to close in the third quarter of this year, with Regeneron required to adhere to 23andMe's privacy policies regarding customer data [3] Group 2: Company Background - 23andMe filed for Chapter 11 bankruptcy protection in March, leading to the immediate resignation of CEO Anne Wojcicki [4] - The company, which went public in 2021 with a valuation of $6 billion, has struggled to achieve profitability and faced significant challenges, including a $30 million settlement for a data breach and substantial layoffs [5] - As of November, 23andMe reported debts of $2.3 billion and approximately $126 million in cash and cash equivalents, indicating a need for additional liquidity [5]

Financial Performance & Targets - Ginkgo achieved $205 million in annual run-rate cost savings from Q1 2024 to Q1 2025[13] - The company maintains a strong financial position with $517 million in cash, cash equivalents, and marketable securities[15] - Total Adjusted EBITDA improved from $(117) million in Q1 2024 to $(47) million in Q1 2025, a 59% increase[34] - Ginkgo is targeting Adjusted EBITDA breakeven by the end of 2026[11, 49] - The company aims for $250 million of annualized run-rate savings target by the end of Q3 2025[53] Revenue & Growth - Cell Engineering revenue increased by 37% year-over-year, reaching $38 million in Q1 2025[34] - This includes recognition of $75 million non-cash deferred revenue from BiomEdit[24] - Total revenue increased by 27% year-over-year, from $38 million to $48 million[34] - Biosecurity revenue remained stable at $10 million in Q1 2025 compared to Q1 2024[34] Biosecurity Expansion - Ginkgo's biosecurity segment has expanded its reach to 127 countries of origin of flights sampled, representing 65% of nations globally[33] - The biosecurity network includes 11 key international airports and 45 collection nodes cumulatively in 2025[33]

Core Insights - Ginkgo Bioworks Holdings, Inc. reported a quarterly loss of $1.58 per share, which was worse than the Zacks Consensus Estimate of a loss of $1.23, marking an earnings surprise of -28.46% [1] - The company generated revenues of $48.32 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 17.12% and showing a year-over-year increase from $37.94 million [2] - Ginkgo Bioworks shares have declined approximately 29.5% year-to-date, contrasting with the S&P 500's decline of -3.9% [3] Company Performance - Over the last four quarters, Ginkgo Bioworks has surpassed consensus EPS estimates only once, indicating inconsistent performance [2] - The current consensus EPS estimate for the upcoming quarter is -$0.47 on revenues of $44.55 million, and for the current fiscal year, it is -$3.72 on revenues of $171.48 million [7] Industry Context - The Medical - Biomedical and Genetics industry, to which Ginkgo Bioworks belongs, is currently ranked in the top 31% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Ginkgo Bioworks' stock performance [5][6]

Financial Data and Key Metrics Changes - The company achieved a reduction in annual run rate costs of $205 million between Q1 2024 and Q1 2025, surpassing the initial target of $200 million [8] - Total company adjusted EBITDA improved to negative $47 million in Q1 2025 from negative $117 million in Q1 2024 [17] - Cash burn decreased significantly to $58 million in Q1 2025 from $104 million in Q1 2024 [18] Business Line Data and Key Metrics Changes - Cell engineering revenue reached $38 million in Q1 2025, a 37% increase year-over-year, with a 10% increase to $31 million when excluding noncash revenue [11][12] - Biosecurity revenue was $10 million in Q1 2025, with a segment gross margin of 28% [13] - The number of revenue-generating programs in cell engineering increased by 32% year-over-year, totaling 123 programs [12] Market Data and Key Metrics Changes - The company has 28 government projects across cell engineering and biosecurity, with a contracted backlog exceeding $180 million [30] - The biotechnology sector is currently facing challenges in capital markets, but companies that navigate these difficulties are expected to emerge stronger [10][25] Company Strategy and Development Direction - The company aims to reach adjusted EBITDA breakeven by the end of 2026 while maintaining a cash margin of safety [5][6] - A focus on expanding the tools business to market directly to a wider range of customers, moving beyond traditional R&D solutions [7] - The company is positioning itself as a trusted R&D service provider to the U.S. government, with ongoing investments in biotechnology and biosecurity [20][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the biotechnology sector's resilience and the potential for growth despite current market challenges [10][25] - The new U.S. administration is expected to continue funding biotechnology, with a focus on reducing regulations and increasing investment in critical technologies [26][30] - The company is well-positioned with over $517 million in cash and no bank debt, allowing it to navigate the current market environment effectively [9][25] Other Important Information - The company has made significant progress in restructuring efforts, achieving substantial cost reductions while maintaining service to existing customers [8][19] - The introduction of new metrics for revenue-generating programs aims to provide more useful data for analysts and improve revenue modeling [12] Q&A Session Summary Question: Is there an opportunity for data points to evolve into a SaaS cloud computing product? - Management acknowledged the potential for Ginkgo to assist large pharma companies in developing their data architecture and systems, indicating a possible opening in the SaaS space [85][86] Question: Can you provide more details on the ARPA H contract and its revenue recognition? - The ARPA H contract is a $29 million, two-year agreement, with revenue expected to be recognized over that period, significantly derisking the company's guidance for the year [92][94]

Financial Data and Key Metrics Changes - The company achieved a reduction in annual run rate costs of $205 million between Q1 2024 and Q1 2025, surpassing the initial target of $200 million [7] - Cash and cash equivalents on the balance sheet stand at $517 million with no bank debt, positioning the company strongly among peers in the biotechnology sector [8][26] - Total company adjusted EBITDA improved to negative $47 million in Q1 2025 from negative $117 million in Q1 2024, indicating significant progress in profitability [17] - Cash burn decreased to $58 million in Q1 2025 from $104 million in Q1 2024, reflecting the impact of restructuring efforts [18] Business Line Data and Key Metrics Changes - Cell engineering revenue reached $38 million in Q1 2025, a 37% increase year-over-year, with a 10% increase to $31 million when excluding noncash revenue [11] - The biosecurity business generated $10 million in revenue in Q1 2025, with a segment gross margin of 28% [13] - The number of revenue-generating programs in cell engineering increased by 32% year-over-year, totaling 123 programs [12] Market Data and Key Metrics Changes - The company has 28 government projects across cell engineering and biosecurity, with a contracted backlog exceeding $180 million [32] - The company is positioned to benefit from increased government investment in biotechnology, as highlighted by recent speeches from government officials [28][32] Company Strategy and Development Direction - The company aims to reach adjusted EBITDA breakeven by the end of 2026 while maintaining a cash margin of safety [4] - The strategic focus includes expanding the tools business and enhancing the way the platform is sold, moving beyond traditional R&D solutions [6][21] - The company is actively pursuing opportunities in the automation and data points sectors, leveraging its expertise in high-throughput screening and AI [46][84] Management's Comments on Operating Environment and Future Outlook - The management expressed optimism about the biotechnology sector's resilience despite current market challenges, emphasizing that companies that navigate this period successfully will be in a strong position [9][26] - The management highlighted the importance of government funding for biotechnology and expressed confidence in the continuation of such funding [32][96] Other Important Information - The company has made significant strides in cost reduction while continuing to serve existing customers effectively [7][20] - The introduction of new metrics for revenue-generating programs aims to provide more useful data for analysts and investors [12] Q&A Session Summary Question: Is there an opportunity for data points to evolve into a SaaS cloud computing product? - The management acknowledged the potential for Ginkgo to assist large pharma companies with data architecture and automation technology, but clarified that the approach to market is still being evaluated [87][89] Question: Can you provide more details on the ARPA H contract and its revenue recognition? - The ARPA H contract is valued at $29 million over two years, with revenue expected to be recognized accordingly, which significantly derisks the revenue guidance for the year [94][95] - The management remains hopeful about the continuation of funding for biotechnology projects despite potential cuts in government spending [96]

Revenue and Financial Performance - Ginkgo's revenue from Cell Engineering primarily comes from license and collaboration agreements, with service fees structured as upfront payments, milestone payments, and downstream value share payments [141]. - Cell Engineering revenue increased to $38.2 million for the three months ended March 31, 2025, up from $27.9 million in the same period of 2024, representing a growth of 37.0% [167]. - Total revenue for the three months ended March 31, 2025, was $48.3 million, compared to $37.9 million in 2024, marking an increase of $10.4 million or 27.4% [166]. - Net loss for the three months ended March 31, 2025, was $90.9 million, compared to a net loss of $165.9 million in the same period of 2024, reflecting an improvement of $74.9 million [166]. - Adjusted EBITDA for Q1 2025 was $(47.5) million, compared to $(117.0) million in Q1 2024, indicating a significant reduction in losses [187]. - The company reported a net loss of $91.0 million for Q1 2025, adjusted for a net change in operating assets and liabilities of $11.6 million and non-cash charges of $51.0 million [193]. Research and Development (R&D) Expenses - The company reported a decrease in R&D expenses in Q1 2025 compared to Q1 2024, attributed to the restructuring plan [153]. - Research and development expenses decreased to $70.9 million in Q1 2025 from $136.5 million in Q1 2024, a reduction of 48.0% [174]. - The company plans to continue R&D activities and invest in its Foundry and Codebase [191]. General and Administrative (G&A) Expenses - General and administrative expenses fell to $49.0 million in Q1 2025, down from $70.3 million in Q1 2024, a decrease of 30.1% [175]. - The company anticipates that G&A expenses will either remain consistent or decline in 2025, reflecting the impact of restructuring actions [155]. Restructuring Plan - Ginkgo's restructuring plan, initiated in Q2 2024, is expected to stabilize R&D and G&A expenses, with a focus on prioritizing investments in Foundry, Codebase, and cell engineering tools [153][155]. - Restructuring charges include severance costs and asset impairments due to facility consolidation, with reductions in force expected to be substantially completed in 2025 [157]. - The company incurred restructuring charges of $5.3 million in Q1 2025 related to its restructuring plan, which began in Q2 2024 [176]. - Restructuring charges in Q1 2025 included employee termination costs from a reduction in force initiated in June 2024 [190]. Biosecurity Services - Ginkgo's biosecurity services include two core offerings: Canopy and Horizon, aimed at biomonitoring and bioinformatics support, with partnerships established domestically and internationally [149]. - The cost of Biosecurity revenue includes expenses related to sample collection, laboratory analysis, and customer support, which are recognized as services are performed [151]. Cash Flow and Investments - Cash and cash equivalents, along with marketable securities, totaled $516.9 million as of March 31, 2025, sufficient to fund projected operations for at least the next 12 months [189]. - Net cash used in operating activities for Q1 2025 was $51,521,000, compared to $89,259,000 in Q1 2024, indicating a decrease in cash outflow [192]. - Cash used in investing activities for Q1 2025 was $198,684,000, primarily due to purchases of marketable debt securities of $191.2 million [195]. - The company had cash equivalents and marketable debt securities totaling $483.8 million as of March 31, 2025, which are exposed to interest rate risk [202]. - The net decrease in cash, cash equivalents, and restricted cash for Q1 2025 was $250,338,000, compared to $102,371,000 in Q1 2024 [192]. Changes in Commercial Terms - Changes to commercial terms for new customer contracts were announced in Q2 2024, including revised intellectual property terms and the removal of downstream value share from certain program types [144]. Future Plans and Acquisitions - The company aims to potentially acquire and integrate companies or assets that align with its objectives [198]. Other Financial Metrics - Interest income, net decreased to $6.1 million in Q1 2025 from $11.7 million in Q1 2024, a decline of 52.1% [178]. - Loss on investments increased to $3.7 million in Q1 2025 from $2.5 million in Q1 2024, an increase of 48.0% [179]. - Foreign currency translation gain was $0.8 million for Q1 2025, compared to a loss of $3.0 million in Q1 2024 [203]. New Offerings - In Q3 2024, Ginkgo launched new cell engineering tools offerings, including Datapoints and lab automation solutions, aimed at providing large biological datasets for AI model training [145]. - Ginkgo's Foundry and Codebase enhancements are expected to improve service delivery and efficiency in biological R&D [133][136].