NEW YORK – Ginkgo Bioworks said after the close of the market on Monday that it has raised its full-year 2022 revenue guidance to between $460 million and $480 million, up from previous guidance of between $425 million and $440 million, driven by strength in the firm's biosecurity business.
The new guidance includes lower foundry revenues in the range of $150 million to $170 million — previously between $165 million and $180 million — and biosecurity revenue of at least $310 million, up from $260 million. The firm also expects to add between 16 and 21 new cell programs in Q4.
"Biosecurity continued to perform well," and was "performing ahead of our expectations," CEO and Cofounder Jason Kelly said on a conference call with investors following the release of the firm's Q3 financial results. Overall, Ginkgo's third quarter 2022 revenues fell 14 percent, year over year, driven by lower milestone payments.
Ginkgo is seeing durability in COVID-19 monitoring in schools, and the US Centers for Disease Control and Prevention is extending contracts for surveillance. "We were also encouraged to see government investments in longer-term biosecurity infrastructure," Kelly said.
In the quarter, the firm purchased epidemiological data infrastructure assets from Baktus, including datasets, modeling and analytic tools, and a software platform with the capability to track, model, and forecast epidemics. The firm said it plans to integrate other epidemiological analysis projects and data experts into its Concentric biosecurity subsidiary.
Moreover, the firm highlighted a contract with the CDC for COVID-19 surveillance in airports; memoranda of understanding on biosecurity with the Rwanda Development Board and Saudi Arabia's Ministry of Investment; and a computational tool called ENDAR (Engineered Nucleotide Detection and Ranking) to detect genetic engineering in NGS data, in collaboration with the Intelligence Advanced Research Projects Activity.
ENDAR is a "great example of a pure-play biosecurity product," Kelly said. "Expect to see more of those."
For the three months ended Sept. 30, Ginkgo reported $66.4 million in total revenues compared to $77.6 million a year ago, beating the consensus Wall Street estimate of $60.4 million.
Biosecurity revenues actually fell 3 percent year over year to $41.7 million from $42.9 million in Q3 2021. Biosecurity service revenues in the quarter — mostly COVID-19 testing — were $36.5 million, up 6 percent from $34.4 million a year ago, while biosecurity product revenues were $5.2 million, down 39 percent from $8.5 million a year ago.
Foundry, or cell engineering, revenues were $24.7 million, down 29 percent from $34.7 million in Q3 2021. The firm added 15 new cell programs for a total of 85, representing 57 percent growth over the prior-year period.
Ginkgo's net loss for the quarter totaled $669.1 million, or $.41 per share, compared to a net loss of $102.4 million, or $.08 per share, in Q3 2022, missing the consensus Wall Street estimate of a $.30 loss per share. The number of weighted average shares of common stock used to compute its Q3 net loss per share was approximately 1.63 billion compared to approximately 1.32 billion in Q3 2022.
Ginkgo went public in September 2021 through a merger with a special purpose acquisition corporation, raising $1.63 billion.
Ginkgo reported $259.6 million in R&D expenses for the quarter, up nearly fivefold from $53.0 million a year ago, driven by stock-based compensation expenses. Excluding stock-based compensation, R&D expenses were approximately $73 million, up 37 percent from $53 million a year ago, Ginkgo CFO Mark Dmytruk said on the call.
Its SG&A expenses were $435.2 million, up more than fourteenfold from $29.0 million a year ago, also driven by stock-based compensation expenses. Excluding stock-based compensation, those expenses were approximately $59 million, double the $29 million spent a year ago, driven by investment in business development and public company requirements.
Dmytruk added that the firm incurred approximately $12 million in transaction and integration costs related to four acquisitions closed in October.
As disclosed in Q4 2021, Ginkgo's stock-based compensation was due to "catch-up" expenses resulting from the firm's historical practice of not booking restricted stock unit grants.
As of Sept. 30, Ginkgo had $ 1.3 billion in cash and cash equivalents.
In Tuesday morning trading on the New York Stock Exchange, shares of Ginkgo Bioworks were down 6 percent at $2.53.