Dr. Emily Leproust: Yes. Thank you, Matt. So, as you know, we serve the Biopharma industry in two ways. One, we sell products and that we record in our SynBio segment. And then we sell service that we record in Biopharma Solutions. And in the SynBio side we sell products, it’s going fine. So, our view of the market is that it’s all going well. And so, we have a particular issue in our Biopharma services. And when we analyze and look at particular territories, if we have commercial talent in a territory, we win business. It’s not a surprise because to your point around competition, we have a very competitive offering, the combination of our in vivo, in vitro, in silico solution is extremely competitive when we have commercial talent.
And so, the execution issue that we have in Biopharma Solutions right now is that we do not have enough commercial talent to cover all our territories. We have five currently. And the most important thing for me, the one that I am focusing on the most is making sure that we hire talent in all the territories. And if we can replicate what’s happening in the successful territories, I’m quite confident that the business will grow the way we expect it. So, in terms of milestones I’m looking for is first hiring of the talent, training them, then getting orders, then getting revenue. That’s the sequence of event in which we’re going to turn the business around. And as Jim mentioned, we are managing it actively and we’ll continue to do so.
Matt Sykes: Great. Thanks for that. And just for my follow-up, just on — for Emily and Jim, just on the transition, Jim, your transition. Maybe just talk about the timing. Why now? And in terms of — I know you hired a search firm, but are there thoughts on internal versus externally, exploring all possibilities? Just kind of want to get a sense for on timing, why today? And then kind of what your thoughts are in terms of replacement?
Jim Thorburn: Yes. In terms of timing, business is in good shape. I mean, the key issue, a challenge over the last year was bringing up Factory of the Future. That’s going well. We’re seeing a lot of interest. And we have line of sight to get to adjusted EBITDA breakeven Q4 next year. So, the timing from an overall commercial and business point of view is good in terms of that line of sight. And Emily, maybe you can answer the rest of the question.
Dr. Emily Leproust: Yes, yes. I think in terms of the search, it would be an external recruit at this point where we’re just starting the process. I haven’t talked to anybody yet, but it would be external.
Operator: Our next question will come from Puneet Souda from Leerink Partners.
Puneet Souda: So first of all, Jim, good luck in the new role. A couple of questions. I would say, first one on Biopharma. Emily, if you could step back a little bit on — about this business and talk about — I mean, look, you had meaningful cuts here. You’re replatforming. You are not reaching breakeven in that business in 2024 as you expected. You’re lowering your guide again. The Biopharma discovery CDMO peers are calling out benefit from rationalizing of trials that’s ongoing out there. So, it appears at a high level that you’re losing share as well. So, wondering when you look at the business overall, how does this fit into the Twist growth profile and outlook in the longer run? You’re obviously doing well in the NGS core business of serving customers on the research side and the growth side. But just trying to understand how Biopharma fits into the overall strategy and picture for the Company, longer term?
Jim Thorburn: Yes. No, thanks for the question. So, as a reminder, in our Biopharma services, what we sell are discovery services, so discovery of antibodies, bispecific HS, EDCs, some TCR, some cell engineering, so — but we are selling services for the early stage of the drug pipeline, so drug discovery, some optimization, some development. But typically, we stop at the preclinical stage. And actually, on the SynBio side, when we sell our fragments, our genes, our oligo pools to those same customers, we are also selling to those customers for the discovery development optimization. And so, the benefit to Twist of having both the product and the service is that when we get in front of a pharma customer, small biotech, large biotech, pharma, we’re able to sell the full menu, we’re able to sell our customers.
And if you’re going to do the work yourself by using our gene, gene fragments, IgGs from SynBio, you’re going to be more effective, more productive in your efforts for the antibodies and drugs, and that is working. That message resonates well. And then what we are saying at the same time is — and by the way, if you have a target for which you are not able on your own to find a therapy or if you have too many targets and you’re not able to prosecute all of those internally, outsource those targets to us, we’ll discover the antibodies for you as a service and then go into the Biopharma service business. And so, we are serving the same customer. And having both menu of products and services is synergistic. Right now, it’s benefiting more the SynBio side.
As I mentioned, we have some commercial execution issues in some territories on the Biopharma service. But adding the two together, we see it as a net positive. And again, I’m quite optimistic as I see the territories where we have commercial talent, it works. So, if it works once, do it again. And of courses, we’ll monitor the activity, but we are quite optimistic for the future.
