Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) Q4 2022 Earnings Call Transcript

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Anna Marie Wagner: The only thing I might add, Steve, and I know we’ve talked about this in the past is that there is an interesting dynamic where when R&D budgets are getting pressured, the idea of laying people off or closing a facility or something like that, it’s a really hard thing that R&D leads don’t want to be faced with us. And so the idea of working with a vendor that you can scale up and down and treat as variable cost is more healing and feels a lot safer in an environment like this than building a new plant or hiring a ton of folks when you’re not sure how much budget you’re going to have next year. And so I think as we think about what are the factors that could increase penetration in biopharma, in particular, over time, this type of a macro environment could actually be a nice catalyst for that shift.

Steve Mah: Okay. Yeah. Thanks for the color. And let me just sneak one more in. So yeah, I appreciate why you removed the milestones guidance because of unpredictability and whatnot. But at a later date, when you have more mature programs, would you be providing guidance at that point and when do you think that would happen? Thanks.

Jason Kelly: It’s a good question. I think it will be like a law of large numbers thing, right? So like at some point, there’s enough things happening that you’re just starting to move with I don’t know, like more obvious trends. So I think it will be until then that you’ll for us to do it, I would say, right? Like, I’m sure Apple somehow predicts their app store revenue, even though they don’t know exactly like which apps are going to fire next quarter because there’s just so many of them and it’s sort of just like moving with the Internet or something. — we’re very far from that. I think that’s the extreme form of it. But like somewhere along the way, there’s enough in there, we’re just enough of a utility that comes out in the wash and then maybe we start to do it. But I just don’t want to get back in the game of like individual event prediction, particularly outside of our control because I think it’s extremely distracting internally.

Steve Mah: Okay. Great. Thanks, Jason.

Anna Marie Wagner: Thank you. All right. Madeline from William Blair. Opened your line, if you want unmute, you are welcome to ask your question.

Unidentified Participant: This is Madeline on for Matt Larew (ph). Just wanted to go back to something you said earlier. I think that you mentioned that you’re going to be making some investments in the business in 2023 that might offset some of the phaseout of the Zymergen impact. Could you talk a little bit more about that specifically where you’re going to be investing?

Mark Dmytruk: Yeah. So some of our — well, Jason, do you want to talk about some of the biopharma capabilities?

Jason Kelly: Well, I don’t know the specific Zymergen, so do you want to explain that?

Mark Dmytruk: Yes. So what we’re really just talking about Madeline is OpEx. And so if you look at Q4, you’re going to have Zymergen costs layered into our Q4 numbers, some of which will be gone by the end of 2023 because they relate to certain support functions that we would think of as sort of transitional in nature. And so once the integration is done. So you’re going to have some of that cost coming out, but also sort of a counter acting sort of back would be on the core Ginkgo sort of R&D side, you’re going to have some continued expansion, right? I mean we don’t hire some people. We still have targeted investments in our mammalian capabilities, for example, and so that’s all I meant by that. And I’m not sure, Jason, if you want to elaborate.

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