Twist Bioscience Corporation

Company Overview

Business Model: Twist Bioscience Corporation operates a disruptive DNA synthesis platform that industrializes the engineering of biology by "writing" DNA on a silicon chip. This proprietary technology miniaturizes traditional chemical DNA synthesis, enabling the production of over 1,000,000 oligonucleotides (up to 500 bases) per chip, significantly reducing chemical usage and offering high quality, precision, automation, and manufacturing throughput at a lower cost and quicker turnaround than competitors. The company generates revenue by applying this platform to manufacture a broad range of synthetic DNA-based products, including synthetic genes, tools for next generation sequencing ("NGS") sample preparation, and biopharma services for antibody discovery, optimization, and development. Twist Bioscience Corporation is also leveraging its platform to expand its portfolio to include synthetic RNA and antibody proteins.

Market Position: Twist Bioscience Corporation is positioned as a leading provider of synthetic DNA using a silicon chip on a large commercial level, serving a global customer base of more than 3,800 customers across healthcare, food/agriculture, industrial chemicals/materials, and academic research sectors. The company's technology addresses critical constraints in DNA synthesis and NGS applications, such as high cost and long turnaround times, by enabling precise, large-scale manufacturing of target enrichment probes and other products. In biopharma, it offers a "discovery trifecta" (in vivo, in vitro, and in silico antibody discovery) for rapid lead selection and engineering. Synthetic DNA is recognized by the National Security Commission on Emerging Biotechnology as a critical choke point in many supply chains.

Recent Strategic Developments:

• Product Portfolio Expansion: In November 2023, Twist Bioscience Corporation introduced Express Genes, offering perfect-quality clonal genes with a 5-business-day turnaround time at a premium. In fiscal year 2024, the Express product portfolio expanded to include Multiplexed Gene Fragments and IgG proteins. The company also introduced an IgG protein offering for drug discovery, leveraging its silicon-based platform for high-throughput antibody production.
• Market Compliance: In February 2024, Twist Bioscience Corporation launched IVDR-compliant Precision Dx products for whole exome sequencing to meet the needs of its European customers for clinical and diagnostic use in the EU.
• Strategic Partnerships: In October 2024, Twist Bioscience Corporation entered into an agreement with XOMA Royalty, receiving $15.0 million in cash in exchange for 50% of future milestone and royalty payments from its existing antibody discovery collaborations.
• DNA Data Storage Spin-out: In May 2025, Twist Bioscience Corporation completed the spin-out of its DNA data storage application to a new independent company, Atlas Data Storage, Inc. Twist Bioscience Corporation assigned and licensed its DNA data storage technology to Atlas Data Storage, Inc. in exchange for a minority ownership interest (73.0 million shares of Series Seed-1 Preferred Stock valued at $53.9 million), an upfront cash payment of $2.5 million, promissory notes of $2.0 million, contingent manufacturing and commercial milestone payments of up to $75.0 million, and royalties on future sales.
• Facility Expansion: In November 2025 (subsequent event), Twist Bioscience Corporation amended its lease agreement in South San Francisco, California, to increase its leased premises by approximately 33,000 square feet for office and lab space, extending the lease until June 30, 2036. The amendment includes a tenant improvement allowance of approximately $24.4 million.

Geographic Footprint: Twist Bioscience Corporation serves a global customer base, with revenues distributed across the Americas (60%), EMEA (33%), and APAC (7%) in fiscal year 2025. The company operates manufacturing facilities in South San Francisco, California, and Wilsonville, Oregon, with additional facilities for general administration, R&D, sales & marketing, and warehousing in Brisbane, California; Quincy, Massachusetts; Guangzhou, China; Carlsbad, California; and Singapore. The company intends to further expand its global presence.

Financial Performance

Revenue Analysis

Profitability Metrics (FY2025):

• Gross Margin: 50.7% (up from 42.6% in FY2024)
• Operating Margin: -36.2%
• Net Margin: -20.6%

Investment in Growth (FY2025):

• R&D Expenditure: $80.3 million (21.3% of revenue)
• Capital Expenditures: $28.0 million
• Strategic Investments: Investment in Atlas Data Storage, Inc. of $53.9 million (fair value of Series Seed-1 Preferred Stock received as consideration for the sale of DNA digital data storage business).

Business Segment Analysis

Twist Bioscience Corporation operates as a single reportable segment focused on the manufacturing of synthetic DNA products. The company's revenue is disaggregated by product line and industry, reflecting diverse applications and market penetration.

Product Line Performance (FY2025):

• NGS tools: Generated $208.1 million in revenue, marking a 23.0% year-over-year increase from $169.1 million in 2024. This growth is driven by demand for improved sample preparation products that enhance sequencing workflow, accuracy, and reduce downstream costs, particularly in diagnostic applications like liquid biopsy and minimal residual disease (MRD) testing. The portfolio includes library preparation kits, human exome kits, fixed and custom panels, Alliance panels, methylation detection kits, and fast hybridization solutions, supporting both DNA and RNA sequencing workflows.
• Synthetic genes: Contributed $113.5 million in revenue, up 20.9% from $92.7 million in 2024. The company shipped approximately 938,000 genes in 2025, a 22% increase from 772,000 in 2024. Products include clonal genes (up to 5,000 base pairs with perfect quality) and non-clonal gene fragments, with an error rate of 1:7500 nucleotides for gene fragments. The Express Genes product line, introduced in November 2023, offers a 5-business-day turnaround for perfect-quality clonal genes at a premium.
• Antibody discovery (Biopharma Services): Generated $23.5 million in revenue, an increase of 15.4% from $20.3 million in 2024. This segment offers comprehensive "discovery trifecta" services (in vivo, in vitro, and in silico antibody discovery), including library generation, screening, developability assays, and antibody expression and characterization. The company had 442 revenue-generating partnerships, 1182 completed programs, and 84 active programs (82 with milestones/royalties) as of September 30, 2025.
• Oligo pools: Accounted for $20.2 million in revenue, a 19.7% increase from $16.9 million in 2024. These high-diversity collections of oligonucleotides (up to 500 nucleotides with an error rate of 1:3000) are used in applications such as targeted NGS, CRISPR gene editing, and high-throughput reporter assays. Cloned oligo pools were added in 2024.
• DNA libraries: Generated $11.2 million in revenue, a decrease of 19.7% from $13.9 million in 2024.

Industry Revenue Distribution (FY2025):

• Healthcare: 57% of total revenue ($215.1 million)
• Industrial chemicals/materials: 25% of total revenue ($93.2 million)
• Academic research: 17% of total revenue ($65.9 million)
• Food/agriculture: 1% of total revenue ($2.4 million)

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: $0.016 million in common stock repurchases for income tax withholdings in FY2025.
• Dividend Payments: Twist Bioscience Corporation has never declared or paid, and does not anticipate declaring or paying in the foreseeable future, any cash dividends on its common stock.
• Future Capital Return Commitments: None explicitly stated.

Balance Sheet Position (as of September 30, 2025):

• Cash and Equivalents: $183.0 million
• Total Debt: $15.0 million (Liability related to the sale of future revenue)
• Net Cash Position: $217.4 million (Cash and Equivalents + Short-term Investments - Total Debt)
• Credit Rating: Not disclosed.
• Debt Maturity Profile: The $15.0 million liability related to the sale of future revenue will be amortized using the effective interest method over the estimated term of the Royalty Purchase Agreement.

Cash Flow Generation (FY2025):

• Operating Cash Flow: $(47.6) million (Net cash used in operating activities)
• Free Cash Flow: $(75.6) million (Operating Cash Flow less Capital Expenditures of $28.0 million)
• Cash Conversion Metrics: Not explicitly detailed.

Operational Excellence

Production & Service Model: Twist Bioscience Corporation's core is a proprietary DNA synthesis platform that "writes" DNA on a silicon chip, miniaturizing chemical reactions to produce over 1,000,000 oligonucleotides (up to 500 bases) per chip. This process significantly reduces chemical usage (by an estimated 99.8% per gene compared to plate-based synthesis) and delivers high quality, precision, automation, and manufacturing throughput at a lower cost and quicker pace. The gene synthesis business operates 24 hours a day, seven days a week, 365 days per year due to its on-demand nature. Oligo pooling is fully automated, and NGS tools manufacturing utilizes proprietary and off-the-shelf laboratory equipment.

Supply Chain Architecture: Twist Bioscience Corporation sources components and raw materials globally. For quality assurance, sole source availability, or cost-effectiveness, certain critical components are procured from a single supplier. The company has established contingency plans and, in some cases, long-term supply contracts with suppliers, and qualifies additional suppliers for key materials to ensure continuity of supply.

Key Suppliers & Partners:

• Critical Component Supplier: Twist Bioscience Corporation relies on one single-source supplier for a critical component in its DNA synthesis process.
• Manufacturing Partners: Some sub-assemblies are outsourced to third-party manufacturers.
• Technology Partners: Research and development efforts include collaborations with universities and research institutions.

Facility Network:

• Manufacturing: All products and multiple sub-assemblies are manufactured at facilities in South San Francisco, California (significant portion of NGS products) and Wilsonville, Oregon (all synthetic biology production, including the Express product line). The Quincy, Massachusetts facility also supports manufacturing.
• Research & Development: R&D activities are conducted in South San Francisco, California, and Quincy, Massachusetts.
• Distribution: A warehouse facility is located in Brisbane, California.
• Certifications: The Quality Management System (QMS) for manufacturing NGS Target Enrichment Panels at the South San Francisco facility was certified to ISO 13485:2016 in 2020, followed by certification of the Wilsonville facility in 2023. The latest successful surveillance audit was in September 2025.

Operational Metrics (FY2025):

• Number of genes shipped: 938,000 (+22% YoY from 772,000 in FY2024).
• Error rate for gene fragments: 1:7500 nucleotides.
• Error rate for oligo pools: 1:3000 nucleotides.
• Manufacturing capacity: Millions of high-quality oligos per day.
• Employees in operations and manufacturing: 412 (as of September 30, 2025).

Market Access & Customer Relationships

Go-to-Market Strategy: Twist Bioscience Corporation employs a multi-channel strategy to reach its diverse customer base, which includes over 100,000 synthetic DNA users, potential NGS tools customers, and antibody discovery partners.

Distribution Channels:

• Direct Sales: Utilizes a direct sales force targeting synthetic DNA customers, a separate direct sales force focused on the NGS market, and business development and sales representatives for biopharma solutions.
• Channel Partners: Engages commercial consultants in Europe and Asia, and works with distributors.
• Digital Platforms: Operates an e-commerce platform that allows customers to design, validate, place on-demand orders for customized DNA, receive real-time quotes, and track order status.

Customer Portfolio:

• Total Customers: More than 3,800 in FY2025 (up from 3,550 in FY2024).
• Repeat Customers: 99% of total revenue in FY2025 was generated from repeat customers (98% in FY2024).
• Customer Concentration: No single customer accounted for 10% or more of total revenue in FY2025, FY2024, or FY2023. One major customer accounted for 10% or more of net accounts receivable as of September 30, 2025.

Geographic Revenue Distribution (FY2025):

• Americas: 60% of total revenue ($225.6 million)
• EMEA: 33% of total revenue ($124.2 million)
• APAC: 7% of total revenue ($26.8 million)
• Growth Markets: The company intends to further expand in international markets.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The synthetic biology industry is intensely competitive, marked by price competition, rapid technological change, international competition, and challenges in product turnaround time and manufacturing yield. The broader bioeconomy, enabled by synthetic DNA, is projected to have a $2-4 trillion global impact by 2030-2040. The NGS market is evolving rapidly with declining sequencing costs, opening new applications in diagnostics and research. The antibody discovery market is increasingly complex, requiring advanced multi-modality platforms. The potential impact of artificial intelligence (AI) on the synthetic biology industry, including a possible reduction in demand for certain gene synthesis types, is an emerging dynamic.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Synthetic Biology Products: GenScript Biotech Corporation, GENEWIZ (owned by Azenta Life Sciences), Integrated DNA Technologies, Inc. (owned by Danaher Corporation), DNA 2.0 Inc. d/b/a/ ATUM, GeneArt (owned by Thermo Fisher Scientific Inc.), Eurofins Genomics LLC, OriGene Technologies, Inc., Eurofins Genomics Blue Heron, Elegen Corporation, Ansa Biotechnologies, Inc., Telesis Bio, Inc.
• NGS Tools: Thermo Fisher Scientific Inc., Illumina, Inc., Integrated DNA Technologies, Inc., Roche Holding AG, New England Bioloabs, Inc., Watchmaker Genomics, Inc., Agilent Technologies, Inc.
• Antibody Discovery: Contract research organizations including Curia Global, Inc., GenScript Biotech Corporation, and Genovac (formerly part of Aldevron, LLC), and antibody discovery biotechnology companies such as FairJourney Biologics S.A/IONTAS Limited, Adimab, LLC, Distributed Bio (owned by Charles River Laboratories International, Inc.), Ablexis, LLC, Specifica Inc., OmniAb, Inc., Alloy Therapeutics, Inc., and AbCellera Biologics Inc.

Emerging Competitive Threats: New entrants or existing competitors developing and commercializing alternative manufacturing processes using silicon chips or similar disruptive technologies, as well as the potential for AI advancements to alter market demand for gene synthesis.

Competitive Response Strategy: Twist Bioscience Corporation's strategy involves continuous product improvement, development of new products (e.g., mRNA and proteins), leveraging its manufacturing investments, protecting its extensive intellectual property portfolio, expanding antibody and protein production capabilities, and growing its global presence.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Customer Spending Volatility: Sales are significantly influenced by customer research and development budgets, which are subject to external factors such as government funding, research grants, economic conditions, and capital market access. Reductions in funding or market uncertainties can lead to delayed projects, reduced orders, or cancellations.
• Technology Obsolescence: The rapidly changing technological landscape in synthetic biology and extensive competition pose a risk that current products could become obsolete without continuous innovation and new product development.
• AI Disruption: Advances in AI capabilities could significantly disrupt the synthetic biology industry, potentially reducing customer demand for certain types of gene synthesis.
• Market Acceptance: Failure to achieve widespread market acceptance for existing products in new markets or for newly developed products could adversely affect future operating results.
• Clinical Value & Reimbursement: A significant portion of NGS tool revenues is derived from liquid biopsy applications (including MRD) that are undergoing clinical studies and subject to coverage and reimbursement determinations. If these applications demonstrate less clinical value or fail to receive adequate reimbursement, sales could be negatively impacted.
• Customer Concentration: Dependence on a limited number of large customers for a significant portion of revenue creates a risk that the loss of any major customer or a substantial reduction in their orders could materially harm financial performance and reputation.
• Pricing Pressures: Increasing customer demand for lower prices and the inability to pass on rising costs (e.g., due to inflation) could lead to reduced margins and profitability.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Single-Source Supplier Dependency: Reliance on one single-source supplier for a critical DNA synthesis component presents a risk of supply limitations, interruptions, or quality issues, which could cause manufacturing delays and adversely affect the business.
• Raw Material Shortages: Shortages or significant price increases for raw materials could disrupt production processes, impede the ability to meet customer demand, and negatively impact financial results.
• Capacity Constraints: Inability to scale manufacturing capacity at facilities in South San Francisco, California, and Wilsonville, Oregon, in a timely or cost-effective manner could lead to lost revenue and harm business operations.
• Third-Party Carrier Disruptions: Dependence on third-party carriers for product delivery exposes the company to disruptions (e.g., strikes, severe weather, public health emergencies), which could damage reputation and customer relationships.

Geographic Concentration:

• Manufacturing Facility Risk: All products are manufactured at two primary facilities. Damage, destruction, or significant manufacturing difficulties at either location could severely limit product supply and impact business operations.
• Natural Disasters & Catastrophic Events: Facilities are vulnerable to natural disasters (e.g., earthquakes in California, extreme heat/wildfires in Oregon) and other catastrophic events, which could disrupt operations and impair critical systems.
• Vivarium Site Disruptions: In vivo antibody discovery services involve mice, and disruptions at vivarium sites (e.g., from animal activists) could impact business operations or reputation.

IT Systems & Cybersecurity:

• System Disruptions & Breaches: Reliance on centralized IT systems and an e-commerce platform makes the company susceptible to damage, disruptions, cyberattacks (including AI-driven attacks), and unauthorized disclosure of confidential information, potentially leading to financial losses, legal liabilities, and reputational damage.
• New Systems Implementation: The need to invest in and successfully implement new IT systems and software for growth and efficiency carries risks of operational difficulties, system failures, and increased costs.
• Insider Threats: Risks associated with the misuse of network access or confidential information by current or former employees, contractors, or partners, whether intentional or unintentional.

Financial & Regulatory Risks

Market & Financial Risks:

• Net Losses & Profitability: Twist Bioscience Corporation has incurred net losses since inception, with an accumulated deficit of $1,319.6 million as of September 30, 2025, and expects to continue incurring losses, with no assurance of achieving sustained profitability.
• Additional Financing: The company may require additional financing to fund operations beyond the next 12 months, and such financing may not be available on acceptable terms, potentially leading to dilution or restrictive debt covenants.
• Foreign Exchange: Exposure to foreign currency fluctuations (primarily Euro, Chinese Yuan, and British Pound) can affect operating costs and product pricing in international markets.

Regulatory & Compliance Risks:

• Evolving Regulation: While most products are "Research Use Only" (RUO) and largely unregulated, the evolving nature of synthetic biology applications could lead to increased regulatory scrutiny from the FDA or other agencies, potentially requiring product clearance or approval.
• EU IVDR Compliance: Compliance with the In Vitro Diagnostic Device Regulation (EU) 2017/746 for products sold in the EU imposes stricter requirements and significant expenditures; non-compliance could prevent sales in the EU.
• Federal Select Agent Program (FSAP): Although Twist Bioscience Corporation has a biosecurity program to avoid FSAP rules, inadvertent non-compliance or new, far-reaching requirements could result in legal liability and reputational harm.
• Export Controls: Certain products may be subject to U.S. Export Administration Regulations, and new export controls (e.g., on DNA writers) could impose additional compliance burdens and business limitations.
• Data Privacy & Protection: Compliance with various data privacy and protection laws (e.g., GDPR) is critical; any violation could lead to significant fines, legal liabilities, and reputational damage.
• CLIA Certification: Future requirements from certain customers for Clinical Laboratory Improvement Amendments of 1988 (CLIA) certification could increase costs and divert management resources.
• International Trade Restraints: International business activities are subject to U.S. export controls and other trade restraints; non-compliance or new restrictions could result in legal penalties and business impediments.
• FCPA & Anti-Bribery Laws: Expansion into international markets increases the risk of violating the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws, potentially leading to substantial civil and criminal penalties.

Geopolitical & External Risks

• Geopolitical Exposure: Global economic conditions, geopolitical tensions (e.g., tariffs, trade restrictions, conflicts), and macroeconomic uncertainty can adversely affect business, supply chains, and financial results.
• Ethical, Legal, and Social Concerns: Public perception and governmental restrictions related to the use of genetic information and genetically engineered products could reduce demand for the company's technology.

Innovation & Technology Leadership

Research & Development Focus: Twist Bioscience Corporation is engaged in ongoing research and development to enhance existing products and develop new ones. Core Technology Areas:

• Oligonucleotide Quality: Process development for the highest quality oligonucleotides.
• Enzyme Development: Development of proprietary enzymes to optimize synthetic biology and NGS products and workflows.
• AI Applications: Evaluation and implementation of AI applications to optimize services for customers.
• Product Portfolio Expansion: Expansion of product offerings for oligo, gene, synthetic controls, NGS library preparation and target enrichment, and DNA Libraries.
• Process Improvements: Continuous process improvements across the business to facilitate speed, efficiency, and automation.
• New Product Development: Development of new products, including mRNA and proteins.
• Biopharma Capabilities: Expansion of capabilities for antibody and protein production to support multiple formats and provide a wide array of characterization assays. R&D activities are closely integrated with manufacturing to expedite new product commercialization and implement new process technologies. The company also participates in technology collaborations with universities and research institutions. As of September 30, 2025, 91 employees were primarily engaged in research and development.

Intellectual Property Portfolio: Twist Bioscience Corporation owns or exclusively in-licenses over 200 issued or allowed patents and more than 250 pending patent applications worldwide as of September 30, 2025. The intellectual property portfolio includes patents and applications directed to DNA synthesis, NGS, and antibody libraries. The company's policy is to file patent applications to protect important technology, inventions, and improvements, establishing competitive moats around its proprietary silicon-chip DNA synthesis platform.

Technology Partnerships: Twist Bioscience Corporation engages in strategic alliances and research collaborations with third parties, including universities and research institutions, to advance its technology. The company is also integrating AI and machine learning into various aspects of its operations to enhance productivity and innovation.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: Twist Bioscience Corporation conducts succession planning to identify individuals with the necessary skills and capabilities for key positions. However, the company does not have "key person" life insurance policies covering members of its management team or other key personnel.

Board Composition: The Board of Directors oversees management's processes for identifying and mitigating risks, including cybersecurity risks, to align risk exposure with strategic objectives. The Chief Information Officer regularly briefs the Board on cybersecurity matters, and the executive team informs the Board of significant cybersecurity incidents based on their nature and severity.

Human Capital Strategy

Workforce Composition: As of September 30, 2025, Twist Bioscience Corporation had 979 employees. The workforce is distributed across key functions: 91 in research and development, 278 in marketing, sales, and customer support, 198 in general and administrative activities, and 412 in operations and manufacturing. None of the employees are represented by a labor union, and employee relations are considered good.

Talent Management: Acquisition & Retention:

• Hiring Strategy: The company provides internship opportunities in scientific and non-scientific fields, engages with local communities, and partners with community colleges to build its brand as a source of high-quality candidates.
• Retention Strategies: Twist Bioscience Corporation offers a challenging work environment, ongoing skills development initiatives, attractive career advancement opportunities, and a culture that rewards entrepreneurial initiative and exceptional execution.
• Employee Value Proposition: The total rewards package includes above-market pay, fully covered healthcare benefits for employees (with family member healthcare benefits covered at 90%), and onsite services.

Diversity & Development:

• Development Programs: The performance management system supports a culture of continuous learning and development. The company encourages cross-team and integrated departmental communication to broaden employee skill sets and provide growth opportunities. It invests in leadership development through a six-month leadership program and individualized coaching for mid-level managers, and offers tuition reimbursement.
• Culture & Engagement: Guiding principles of grit, impact, service, and trust form the foundation of the company's culture. Open forums with executives, employee surveys, and engagement through focus groups, forums, and committees facilitate open communication. A recent survey in September 2025 had a 90% employee response rate.

Environmental & Social Impact

Environmental Commitments: Twist Bioscience Corporation's mission includes improving the sustainability of the planet. Its proprietary DNA synthesis platform significantly reduces chemical usage (by an estimated 99.8% per gene compared to plate-based synthesis), contributing to more sustainable production methods.

Supply Chain Sustainability: Not explicitly detailed in the filing.

Social Impact Initiatives:

• Community Investment: The company provides all employees with eight fully paid hours each year for community service at an organization of their choice and is working to engage with local community organizations for volunteer opportunities.
• Product Impact: Twist Bioscience Corporation's products are used by customers across various sectors (diagnostic, therapeutic, healthcare, agricultural biotech, chemical companies, academic institutions, government entities) to address large societal challenges, improve health, and enhance sustainability.
• Corporate Responsibility Report: Full results of corporate responsibility efforts, including the 2025 Corporate Responsibility Report, are available on the company's website.

Business Cyclicality & Seasonality

Demand Patterns: Twist Bioscience Corporation's sales and profitability are influenced by customer spending on research and development, which can vary significantly due to factors beyond its control. These factors include government funding, research grants, changes in government programs, economic conditions, political climate, and access to capital markets for biotechnology and life sciences companies. Declines or uncertainties in capital markets can restrict customer funding, leading to delayed projects, reduced orders, or cancellations. As the company expands internationally, revenue may also be impacted by seasonal trends in different regions and the seasonality of customer budgets.

Planning & Forecasting: The company provides guidance on future performance, but actual operating results may differ significantly from these estimates due to inherent business, economic, and competitive uncertainties. A significant portion of operating expenses is relatively fixed, meaning unexpected revenue shortfalls can lead to decreased gross margins and significant fluctuations in quarterly operating results.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• FDA: Most of Twist Bioscience Corporation's products are marketed as "Research Use Only" (RUO) and are largely unregulated by the FDA, aside from certain labeling requirements. However, if the FDA were to assert that any RUO products are subject to regulatory clearance or approval, the business could be adversely affected. The FDA's historical enforcement discretion regarding Laboratory Developed Tests (LDTs) has been a factor, though a recent attempt to regulate LDTs was rescinded.
• EU IVDR: Twist Bioscience Corporation has launched IVDR-compliant Precision Dx products for whole exome sequencing to meet the stricter requirements of the In Vitro Diagnostic Device Regulation (EU) 2017/746 for medical devices in the EU. Compliance with these regulations requires significant expenditures, and failure to comply could prevent sales in the EU.
• Federal Select Agent Program (FSAP): The company has a biosecurity program to comply with biosafety and biosecurity best practices and generally avoids DNA synthesis activities that trigger FSAP rules. Inadvertent non-compliance or new, far-reaching requirements could lead to legal liability.

Trade & Export Controls:

• Export Restrictions: Some of the company's sequences and synthetic controls may be subject to U.S. Export Administration Regulations, requiring licensing for export. New export controls, such as those expected regarding DNA writers, may necessitate additional compliance considerations.
• Sanctions Compliance: International business activities must comply with U.S. export controls and other international trade restraints, including economic sanctions regulations.
• OSTP Framework for Nucleic Acid Synthesis Screening: Twist Bioscience Corporation publicly attests to its adherence to the screening requirements of this framework, which is mandated for U.S.-funded researchers and institutions purchasing synthetic nucleic acids.

Legal Proceedings:

• Securities Class Action: A putative securities class action lawsuit (Peters v. Twist Bioscience Corporation, et al.) was filed in December 2022, alleging violations of federal securities laws based on a Scorpion Capital report. An amended complaint was filed in October 2023, and the court granted in part and denied in part the defendants' motion to dismiss in September 2025. Twist Bioscience Corporation intends to vigorously defend the remaining claims.
• Derivative Action: A shareholder derivative suit (Shumacher vs. Leproust et al.) was filed in September 2023, based on similar allegations as the Securities Class Action. This action has been stayed pending resolution of the motion to dismiss in the Securities Class Action.

Tax Strategy & Considerations

Tax Profile: Twist Bioscience Corporation has incurred net losses since inception, resulting in an accumulated deficit of $1,319.6 million as of September 30, 2025. The company recorded income tax expenses of $0.7 million in FY2025, primarily attributable to foreign operations.

• Effective Tax Rate: The effective tax rate is significantly impacted by a full valuation allowance against deferred tax assets.
• Geographic Tax Planning: The company's tax provision includes components from its foreign operations.
• Tax Reform Impact: The U.S. government's "The One Big Beautiful Bill Act" enacted in July 2025, which includes provisions for immediate expensing of qualifying domestic R&D and permanent extensions of certain Tax Cuts and Jobs Act provisions, was evaluated and determined not to have a material impact on FY2025 financial results. The company will continue to evaluate future impacts.
• NOL Carryforwards: As of September 30, 2025, Twist Bioscience Corporation had federal net operating loss (NOL) carryforwards of approximately $915.6 million (of which $714.8 million never expires) and state NOL carryforwards of approximately $621.2 million.
• R&D Credit Carryforwards: The company also had federal research and development credit carryforwards of approximately $58.1 million and state credits of $38.8 million as of September 30, 2025.
• Valuation Allowance: A full valuation allowance of $383.4 million was maintained against deferred tax assets as of September 30, 2025, as management believes it is more likely than not that these assets will not be fully realizable.
• Uncertain Tax Positions: The company has identified uncertain tax positions related to federal and state research and development credits and foreign jurisdictions, with unrecognized tax benefits of $2.9 million as of September 30, 2025.

Insurance & Risk Transfer

Risk Management Framework: Twist Bioscience Corporation manages various risks through a combination of internal controls and external insurance.

• Insurance Coverage: The company maintains property insurance that provides limited coverage for contamination from hazardous and biological products and associated cleanup costs. Cybersecurity insurance is maintained to mitigate risks from cybersecurity incidents.
• Risk Transfer Mechanisms: Twist Bioscience Corporation enters into indemnification agreements with its directors and officers, committing to indemnify them to the fullest extent permitted by Delaware law. The company also has directors' and officers' insurance.