Twist Bioscience (TWST) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01We have incurred net losses in every period to date, and we may continue to experience losses as we develop our business and may never achieve profitability50% rewritten
2. 02If we are unable to maintain adequate revenue growth or do not successfully manage such growth, our business and growth prospects will be harmed
3. 03We may encounter difficulties in managing our growth, and these difficulties could impair our profitability22% rewritten
4. 04The continued success of our business relies heavily on our disruptive technologies and products and our position in the market as a leading provider or synthetic DNA using a silicon chip
5. 05We are substantially dependent on the success of our synthetic DNA products26% rewritten
6. 06We operate in a highly competitive industry and if we are not able to compete effectively, our business and operating results will likely be harmed38% rewritten
7. 07If we are unable to attract new customers and retain and grow sales from our existing customers, our business will be materially and adversely affected
8. 08Our revenue, results of operations, cash flows and reputation in the marketplace may suffer upon the loss of a limited number of large customers
9. 09If we, or our partners or suppliers, experience a significant disruption in, or breach in security of, information technology systems or other cybersecurity incidents, our business could be adversely affected
10. 10As we continue to grow our business, we will need to implement new systems and software successfully, otherwise our business and our financial condition and results of operations could be adversely affectedNew
11. 11Rapidly changing technology and extensive competition in synthetic biology could make the products we are developing and producing obsolete or non-competitive unless we continue to develop and manufacture new and improved products and pursue new market opportunities
12. 12Issues relating to the use of AI and machine learning and compliance with evolving regulations and industry standards could adversely affect our business and operating results
13. 13Adverse global economic conditions and U.S. policy changes could have a negative effect on our business, financial condition and results of operationsNew
14. 14A significant portion of our sales depends on customers’ budgets that may be subject to significant and unexpected variation, including seasonality
15. 15We generally do not have long-term contracts with our customers requiring them to purchase any specified quantities from us
16. 16We depend on one single-source supplier for a critical component for our DNA synthesis process. Although we have a reserve of supplies and alternative suppliers exist, the loss of this supplier or its failure to supply us with the necessary component on a timely basis could cause delays in the future capacity of our DNA synthesis process and adversely affect our business
17. 17We must continue to secure and maintain sufficient and stable supplies of raw materials. Any shortage of raw materials or materials necessary for our production capabilities may adversely affect our business
18. 18We depend on the continuing efforts of our senior management team and other key personnel, including our scientific and engineering personnel. If we lose members of our senior management team or other key personnel or are unable to successfully retain, recruit and train qualified researchers, engineering and other personnel, our ability to develop our products could be harmed, and we may be unable to achieve our goals21% rewritten
19. 19We may be unable to successfully recruit and maintain adequate sales, marketing and other support personnel in order to increase our market share and expand our customer base
20. 20We may engage in strategic transactions, including acquisitions, collaborations, or investments in other companies or technologies, that could disrupt our business, cause dilution to our stockholders, reduce our financial resources, or prove not to be successful
21. 21We may not achieve the anticipated benefits from the spin out of our DNA data storage applicationNew
22. 22We may be subject to significant pricing pressures and if we are unable to pass on any cost increase to our customers, our business, financial position and results of operations could be adversely affected
23. 23We use biological and hazardous materials that require considerable expertise and expense for handling, storage and disposal and may result in claims against us
24. 24We could develop DNA sequences or engage in other activity that contravenes biosecurity requirements, or regulatory authorities could promulgate more far-reaching biosecurity requirements that our standard business practices cannot accommodate, which could give rise to substantial legal liability, impede our business and damage our reputation28% rewritten
25. 25Third parties may use our products in ways that could damage our reputation
26. 26A violation of data privacy or data protection laws could adversely harm our operating results and financial condition, damage our reputation or otherwise materially harm our businessNew
27. 27Because we are subject to existing and potential additional governmental regulation, the markets for our products may be narrowed
28. 28Our products could in the future be subject to additional regulation by the FDA or other domestic and international regulatory agencies, which could increase our costs and delay our commercialization efforts, thereby materially and adversely affecting our business and results of operations52% rewritten
29. 29Certain of our potential customers may require that we become certified under the Clinical Laboratory Improvement Amendments of 1988
30. 30We currently manufacture all of our products and multiple sub-assemblies at our manufacturing facilities in Wilsonville, Oregon and South San Francisco, California, and if either of these facilities are destroyed or we experience at either of these facilities any manufacturing difficulties, disruptions, or delays, this could limit supply of our products or adversely affect our ability to sell products or conduct our clinical trials, and our business would be adversely impacted24% rewritten
31. 31Natural disasters, public health crises, political crises, severe weather events, and other catastrophic events or other events outside of our control may damage our facilities or the facilities of third parties on which we depend and could impact our ability to sell products
32. 32We may not be able to scale our manufacturing capacity to meet future demand, which could harm our business92% rewritten
33. 33Delivery of our products could be delayed or disrupted by factors beyond our control, and we could lose customers as a result
34. 34We may require additional financing to achieve our goals, and such additional financing may not be available acceptable terms, or at all, which could have an adverse effect on our business47% rewritten
35. 35As we expand our development and commercialization activities outside of the United States, we will be subject to an increased risk of inadvertently conducting activities in a manner that violates the U.S. Foreign Corrupt Practices Act (the "FCPA") and similar laws. If that occurs, we may be subject to civil or criminal penalties which could have a material adverse effect on our business, financial condition, results of operations and growth prospects22% rewritten
36. 36We could engage in exporting or related activity that contravenes international trade restraints, or regulatory authorities could promulgate more far-reaching international trade restraints, which could give rise to one or more of substantial legal liability, impediments to our business and reputational damage
37. 37Doing business internationally creates operational and financial risks for our business
38. 38Our ability to use our net operating loss carryforwards to offset future taxable income may be subject to certain limitations21% rewritten
39. 39The enactment of legislation implementing changes in taxation of international business activities, the adoption of other corporate tax reform policies, or changes in tax legislation or policies could impact our future financial position and results of operations61% rewritten
40. 40Ethical, legal and social concerns surrounding the use of genetic information could reduce demand for our technology

Risks related to being a public company

1. 41If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired, which would adversely affect our business
2. 42The requirements of being a public company may strain our resources and require a substantial amount of management’s attention

Risks related to our intellectual property

1. 43Our ability to protect our intellectual property and proprietary technology through patents and other means is uncertain28% rewritten
2. 44If we are unable to obtain, maintain and enforce intellectual property protection, others may be able to make, use, or sell products and technologies substantially the same as ours, which could adversely affect our ability to compete in the market
3. 45We may not be able to protect our intellectual property rights throughout the world
4. 46If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected
5. 47We may be involved in lawsuits to protect or enforce our patents and proprietary rights, to determine the scope, coverage and validity of others’ proprietary rights, or to defend against third party claims of intellectual property infringement that could require us to spend significant time and money and could prevent us from selling our products or impact our stock price
6. 48We may not be successful in obtaining or maintaining necessary rights to our products and technologies through acquisitions and in-licenses, and our intellectual property agreements with third parties may involve unfavorable terms or be subject to disagreements over contract interpretation
7. 49We have not yet registered some of our trademarks in all of our potential markets, and failure to secure those registrations could adversely affect our business
8. 50We depend on certain technologies that are licensed to us. We do not control these technologies and any loss of our rights to them could prevent us from selling our products

Risks relating to owning our common stock

1. 51We have never paid dividends on our capital stock and we do not intend to pay dividends for the foreseeable future. Consequently, any gains from an investment in our common stock will likely depend on whether the price of our common stock increases
2. 52Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our stock
3. 53Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees

General risk factors

1. 54The market price of our common stock is likely to be volatile and could fluctuate or decline, resulting in a substantial loss of your investment
2. 55Our quarterly and annual operating results and cash flows have fluctuated in the past and might continue to fluctuate, causing the value of our common stock to decline substantially
3. 56If securities or industry analysts do not publish research or reports about our business or publish negative reports about our business, our share price and trading volume could decline
4. 57Our actual operating results may differ significantly from our guidance21% rewritten
5. 58We have in the past and may in the future be subject to short selling strategies that may drive down the market price of our common stock
6. 59Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause the stock price of our common stock to decline
7. 60Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us
8. 61Increasing scrutiny and evolving expectations around corporate responsibility practices, specifically related to environmental, social and governance (“ESG”) matters, from investors, lenders, customers, government regulators and other market participants may impose additional costs and expose us to reputational and other risks76% rewritten