Twist Bioscience (TWST), a synthetic biology and genomics company, has completed the buyout of iGenomX for $35 million.
iGenomX delivers multiplex sequencing tools, which helps maximize laboratory capacity and statistical power for population and disease genetics, agricultural, food safety, microbiome, and synthetic biology applications.
Twist made an initial $500,000 payment in cash and the remaining $29.5 million in stocks. The company is also expected to make a contingency payment of $5 million in Twist shares upon achieving certain milestones.
With this acquisition, Twist’s capabilities to support multiplex sequencing preparations across multiple markets are expected to be bolstered. Twist’s conversion of customers from static microarray platforms to genotyping by sequencing workflows is also expected to speed up. (See Twist stock chart on TipRanks)
CEO and co-founder of Twist, Emily M. Leproust, Ph.D., said, “Already adopted by a number of agricultural, synthetic biology and healthcare customers, we anticipate this technology, together with our leading NGS product line and worldwide commercial infrastructure, will drive adoption of Twist NGS workflow solutions into fields that run large volumes of samples with shallow sequencing.”
Notably, the company anticipates revenue of about $4 – $6 million in Fiscal 2023. CFO of Twist Jim Thorburn said, “We expect the financial impact of the acquisition on our burn rate to be minimal for both fiscal 2021 and 2022.”
On June 4, Goldman Sachs analyst Matthew Sykes initiated coverage on the stock with a Hold rating and price target of $110 (17.45% downside potential). Sykes is of the opinion that Twist has been able to maintain high sales growth momentum by expanding gross margins.
The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 3 Buys and 2 Holds. The average Twist price target of $130 implies 2.4% downside potential from current levels.
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