Why Twist Bioscience shares rose 25.1% in July

What happened

Shares of Twist Biosciences (NASDAQ: TWST)a biotech company that makes synthetic DNA products, including synthetic genes, antibody libraries for drug development and tools for next-generation sample preparation, jumped 25.1 % in July, according to data from S&P Global Intelligence.

The stock closed at $34.96 on June 30, the last trading day of the month, reached $49.37 on July 21, and closed at $43.74 on July 29, the last trading day of the month. . Shares of Twist have a 52-week low of $25.07 and a 52-week high of $139.99 and its shares are down just over 31% so far this year.

So what

Two important factors drove the stock price higher last month. On July 14, the company announced that it was launching two synthetic DNA controls of the monkeypox virus, including the Congo Basin clade (genetic branch) from Central Africa and the West African clade. The controls will allow other companies to develop therapies for monkeypox quality control measures for the development of next-generation sequencing (NGS) and polymerase chain reaction (PCR) assays.

The timing was right because the World Health Organization on July 23 declared monkeypox an international health emergency.

The second news that helped push Twist’s stock higher is that Cathie Wood ARK Innovation ETF bought an additional 156,417 shares of Twist in July, bringing the ETF’s Twist share count to 6.27 million, making it the second-largest holder of Twist shares. Not only did the buys help push the price up, but investors who followed Wood’s moves also stepped in to push his stock price higher.

Now what

There are plenty of reasons to be excited about Twist’s potential. The biotech company has seen double-digit revenue growth over the past five years and last year improved its gross margin to 39%.

The company is working on using DNA for data storage, which has huge implications given the growing need for more data storage and something that could be the company’s main revenue driver , with long-term archival storage representing a $35 billion market within five years, according to twist.

The company also said it expects annual revenue of $203 million this year, up from previous estimates of between $191 million and $199 million, with a gross margin of 40%.

In the short term, however, Twist is not yet profitable. In its third-quarter report, the company said it posted revenue of $56.1 million, up 60% year-over-year and 16% sequentially. However, it reported a loss of $60.5 million, or $1.08 per share, in the quarter, compared to a net loss of $40.0 million, or $0.82 per share, for the same period last year.

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Jim Halley has no position in the stocks mentioned. The Motley Fool holds posts and recommends Twist Bioscience. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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