Jason Kelly: There maybe 2 different questions there. There’s sort of — you asked program cancellation at the end, but I’ll defer that for a minute that’s like a slightly different topic. But in terms of like sales pipeline. No, again, it’s very strong. And Mark touched on this a little bit in his comments that like one of the challenges we have is like the timing of the close. So we do — we end up starting certain programs like in advance of closing — signing with the customers so that we get started a little faster and things like that. We do that as we get very close to being across the line with the customer from a deal standpoint. We have lots of those right now. So like I like where we’re at going into the upcoming quarters.
I like our sales infrastructure, I like our pipeline. Like those things are good. I think we will see quarter-to-quarter variability on what gets across the line. Sometimes that will break in our favor, and sometimes it won’t. I think that’s kind of Mark’s — not to put words in your mouth, Mark, general point about the timing challenges of complex enterprise sales. But I overall like it. And then on — does that answer your question? I just want to make sure.
E.V. Koslosky: Yes, that’s helpful. And then on program cancellations. I mean more on like the biotech programs or projects not like your programs, does that make sense, kind of the difference there?
Jason Kelly: In other words, like once I hand something off to a customer and then they fail in a trial and shut down the commercialization, is that what you mean?
E.V. Koslosky: Yes. Or if we’re seeing less discovery work being done, so more prioritization of like later-stage projects.
Jason Kelly: I think that’s true across the industry, yes. The good thing about biopharma is Ginkgo’s penetration into that industry today is like rapidly small. So like even though that is true, we’re still talking to like companies that have never even talked to us before. So like it’s not as if, oh well, we’ve got this level of penetration and they’re backing off. And it’s also not like industrial biotech, where it’s kind of gone to, right, like it’s really tightened up a lot. There’s still a good amount of funding, certainly at the large biopharmas, but even at the small ones, people are still pursuing research and most of them have not given Ginkgo a serious look yet. So that all bodes well for our enterprise sales team to go around and talk to people and show what we got.
E.V. Koslosky: Okay. Great. That’s super helpful. And then one more. You gave a lot of detail on biosecurity at the Investor Day. Nice to see the guidance raise there. Could you talk through the competitive environment in that market? Obviously, it’s very new and emerging. But has anything come up when talking to customers with other players you’re seeing in that space?
Jason Kelly: No, I’ve shown those 3 boxes of like kind of like monitor, decision-making and then response. Obviously, in response, there’s time, right, like response is just the whole biopharma industry vaccine developer. And so — but Ginkgo’s focus has been on the monitor and decision-making. And in that area, there is some — you might have seen there’s like people doing like Verily is doing like a wastewater in the U.S., like municipal wastewater. So that’s something that’s happening and that was with another smaller company Biobot. So those are folks that are kind of like at least doing some monitoring. On the airport side, right now, there’s not really a lot of that going on. We’re more fighting like convincing people that this is a good thing to have out in the world, and I think we’re making good progress on that.
But it’s a little more fighting like getting the infrastructure built in the first place and getting it funded versus like it being a blood red competition. So I’d say, overall, that’s the bigger thing, it’s just increasing the profile of biosecurity as a category. It’s not as competitive at the moment.
Megan LeDuc: And I think we have time for one more question from the public. This one comes from the investor inbox. Please provide more details on the recent Pfizer deal, specifically, what does Ginkgo need to do to earn the $330 million mentioned in the recent press release?
Jason Kelly: Yes. So I can give extra color on this. So I mean what we had in the press release is basically what we can actually say about the deal, but it does highlight that we get research payments as well as milestones, which are like once we’ve handed off the asset to the customer, and they’re going to move it through things like clinical trials and so on. And then there’s also potential for royalties. I will say, in general, I think you’ll see this a lot — across a lot of biopharma deals. We will typically have some type of milestone payments as a — if we’re doing drug development, R&D, it’s different if we’re doing, say, manufacturing R&D, which we’ve done with partners like Biogen and Novo Nordisk. But for drug development, you will see things like, okay, if it gets through Phase I, Phase II, Phase III clinical trial, those will be types of things that would typically provide milestones if you’re doing this type of research, that sort of stuff.
And then obviously, if there is a royalty that’s on once it’s gone commercial.
Megan LeDuc: Great. Thanks, Jason. That about closes it out. Do you have any closing thoughts for us today?
Jason Kelly: No, other than to say, like I mentioned, I’m really quite proud of the infrastructure that’s been — being built up on the enterprise sales side. I think that is unappreciated that how difficult that is because it is — we’re selling a different thing, right? Like there are CROs out in the world that are selling, what I’d call, like straightforward research services, like give me something that you pretty much know you could do or anybody else could do, and I can do it cheaper or whatever. Ginkgo selling like high-end drug discovery. It’s a much more complicated sale. So to be able to do that at scale, I think, it’s going to really be valuable for us in the long run. So I’m happy to see that.
Megan LeDuc: All right. Thanks so much. That concludes this quarter’s earnings call. Talk to you all next quarter.
Jason Kelly: Thanks, everybody.
Mark Dmytruk: Thank you.
