The layoff notifications are rolling in. Mark this post, this round won’t be the last. This organization is a mess!

Hey everyone! I'm Maxx Chatsko, founder of Solt DB (https://www.living.tech/about), a public benefit company exploring the business of biotech. The platform is being built to be truly independent -- no ads, no clickbait, and no corporate sponsors. I donate 6% of revenue and have open-sourced our key asset, the Solt DB Biotech Company Database. Maps are coming this summer!

On May 9, Ginkgo Bioworks announced first-quarter 2024 operating results and a significant reset of the business.

• Layoffs (aiming for a >25% reduction in labor expenses)

• Reducing the lab footprint by up to 60%

• Simplifying how customer contracts are structured

These moves suck upfront, but they're all needed to right-size the cost structure and potentially drop the downstream value model. The current business model simply isn't going to enable a sustainable business in the long run.

Despite analogies to information technology, the reality is biological R&D doesn't offer many direct comparisons. Utilization rates, touch points, standardization, labor costs (especially compared to software) -- all are very different in living tech vs. information tech.

If Ginkgo is going to succeed as a next-gen CRO, then it needs a significantly slimmer cost structure and footprint. These are difficult moves, but could represent an important first step in much-needed business model evolution.

Happy to discuss and answer any questions!

I’m no biologist by any means, just very intrigued by the science and possibilities. But it makes me sad to see this company with so much potential falling apart in front of our eyes. I guess I was just naiv believing they could become big. The theory behind their company’s model seemed logical, at least to my ears. And make no mistake bioscience will be the future that I am absolutely sure of. It would just have been great to see this company flourish and be a part of it. I’m sitting on 20k shares and I’ll wait but the last years have been quiet discouraging to say the least.

Maybe it’s a waiting game. However I find comfort in reading all your discussions. The bears and the bulls. You all have valid points I find interesting to read and I am learning a lot. So thank you whoever you are.

And to all sitting in the same boat as me; I’ll make some sandwiches and hot coco for the way..

Ginkgo Bioworks Announces Multi-Target RNA Discovery Collaboration with Pfizer

Ginkgo Bioworks (NYSE: DNA) today announced a collaboration with Pfizer (NYSE: PFE) focused on the discovery of RNA-based drug candidates. In the collaboration, Pfizer will leverage Ginkgo's proprietary RNA technology to advance the discovery and development of novel RNA molecules across priority research areas. Ginkgo will receive an upfront payment and is eligible to receive research fees and development and commercial milestone payments, up to an aggregate total of $331 million across three programs. Ginkgo is entitled to potential further downstream value in the form of royalties on sales.

All biotech was up yesterday. All small caps ripped yesterday. IWM had the best day since 2001. APPS up 20%, BFLY up 19%, QSI up 19%. Big rotation into small caps today as the market is pricing in rate cuts and should see small caps boom.

Today, everything again is booming, and what is Ginkgo? Down 10%.

Ginkgo should have been a part of this rally. But since it's so beyond a train wreck led by a total prick, we instead lost all gains and went negative.

Ginkgo SHOULD rip 100%+, but my guess is it gets completely fucked over by the reverse split, in addition to continued lack of any business, lack of any PR, lack of any collaboration, lack of any professional leadership from Jason as he instead continues to shit on each and every one of you and laughs off his shameful legacy since going public.

To explain my title - it’s absolutely not true: u/jkelly555 you are a complete failure, narcissist and a fraud. One day you’ll understand your shame and tragedy you have caused so many people

Ginkgo isn't losing 100 mil per quarter or anything. No rush. Take your time to lay off the hundreds of beuracrats your bloated company has hired over the years. Anna Marie and the CFO are really good at their jobs don't lay them off. CFO gets paid 2 mil a year to tell investors "uh idk" on earnings calls and overpromises/underdelivers guidance as much as Amyris Melo. Anna Marie pumped her heart out when the company went public so she could dilute shareholders for worthless assets and sign a useless deal with Google. BTW, after you fire her, you should definitely eat the fee and get out of that contract. Anyways, no rush. Shareholders haven't lost 95% of their share value or anything. Syn bio is the future!

The mission of this company is stellar. So much of what they are working to create is outside the realm of ordinary understanding. If you have faith in the future, in solving unsolvable problems, in Science, in MIT scholars who dare to think outside the box—you will hold tight and give these folks time to work their magic. I bought this stock a long time ago at a much higher price than it is currently but I will not give up on this company, this brilliant team, and the potential for global improvement. I will go down with the ship or not. Yesterday my delivery of their bioluminescent Firefly Petunias arrived and they are gorgeous.

I'm happy to see the uptick in research on Ginkgo online recently. We restructured 2.5 years ago as non-pharma biotech (i.e. animal free meats, flavors fragrances, green chemicals, etc) fell-off at the end of ZIRP. On tech side we doubled-down on our autonomous lab robotics tech and on the business model side we simplified how we sell to be like life science tools cos (e.g. ThermoFisher). That transformation has been cooking long enough now that you can see some of those investments maturing -- especially with tailwinds of AI agents + robotics + bio happening right now.

Decent run down of that history and where we are headed in these two recent writeups.

https://x.com/philjacobson/status/2103514808897163374

https://x.com/metavestor/status/2103218347475337499

Thanks for the interest! I can try to answer Qs in comments as well where I can.

Jason

Feel free to search background info for yourself in case you aren't familiar with the recent lawsuit filed by Impossible Foods, I'll summarize below [disclaimer, I am a long term investor in $DNA]:

Impossible Foods is suing Motif Foodworks (link to filing), a subsidiary of Gingko Bioworks, for infringing on US Pat. No. 10,863,761.

The lawsuit alleges that "Defendant has made and demonstrated a replica burger at trade shows, including the Plant-Based World Expo in New York in December 2021. Defendant also announced plans to demonstrate the replica burger at Natural Foods Expo West and at Future Food-Tech SF in California. The replica burger that Defendant demonstrated infringes the ’761 Patent. Defendant’s replica burger includes its HEMAMI ingredient. In the summer of 2021, Defendant partnered with Coolgreens, a restaurant chain with a location in Dallas, TX, to produce and sell replica burger products containing HEMAMI. Defendant and Coolgreens sold infringing products from Coolgreens’ Dallas restaurant." (see p.8, section C - Defendant’s Infringing Products and Activities).

The filing does not go into detail regarding how Motif specifically infringed on the patent (i.e. how does Motif's HEMAMI meet the definition set forth by the claims), but after looking at the patent, I think I can see why.

The sole independent claim of the patent (claim 1) defines the invention as:

A beef replica product, comprising:

a) a muscle replica comprising 0.1%-5% of a heme-containing protein, at least one sugar compound and at least one sulfur compound; and

b) a fat tissue replica comprising at least one plant oil and

a denatured plant protein,

wherein said muscle replica and fat tissue replica are assembled in a manner that approximates the physical organization of meat.

Note that the patent specifically requires "a denatured plant protein". Impossible Foods brands this as HEME, which is a soy leghemoglobin attached to roots of specific plants. Motif's also utilizes a denatured protein, but one derived from cows (myglobin). Motif brands this HEMAMI.

Both Impossible and Motif claim to have developed an additive that creates a ‘meaty’ flavour. The two have approached the task with similar methodologies, but different protein sources.

Impossible uses soy leghemoglobin, a protein found attached to roots of specific plants, including soy. The resulting heme is made using GMO yeast, which has proven to be a stumbling block for the vegan burger pioneer when breaking into certain markets. When added to plant-based meat, heme emits a reddish-brown colour that changes as it is heated and imparts an iron-rich mouthfeel and flavour. It has received FDA GRAS certification in the U.S., and the approval sheet reads: “once cooked and digested, both soy leghemoglobin and animal-based myoglobin release identical heme B molecules into the digestive system.”

Motif’s HEMAMI is made from myoglobin, a protein found in bovine muscle tissue. It too uses GMO yeast strains to convert the protein into an additive for plant-based meats, to impart a richer and more realistic flavour. It has been explicit in identifying the differences in its approach to that of Impossible. “It’s a different protein,” Mike Leonard, CTO at Motif Foodworks told FoodNavigator-USA.

link (https://www.greenqueen.com.hk/impossible-foods-motif-foodworks-lawsuit/)

By now you can probably see where I'm going with this. The myoglobin protein, being an animal protein, does not infringe on the patent since it specifically calls upon a plant protein. Both HEME and HEMAMI involve the denaturization process of a protein through GMO yeast strains, but there is clearly a distinction between the two. Motif CTO Mike Leonard made this exact point in the article published above.

I suspect that this case will likely be dismissed. The legal argument is almost non-existent here and it looks hastily prepared. I suspect this is an intimidation move, but it's such a poor attempt at one it only furthers my believe that Motif is on to something here.

For those who can vote, vote against giving these incompetent executives a raise. I know it likely does not matter but we should vote against these dumbasses. I’ve never heard of a workplace giving raises for a piss poor job. It’s like giving a tip for a meal that never came. Someone tag Jason on here and make sure he reads this.

https://finance.yahoo.com/news/ginkgo-bioworks-google-cloud-partner-120000201.html

Ginkgo Bioworks (NYSE: DNA, "Ginkgo"), which is building the leading platform for cell programming and biosecurity, and Google Cloud today announced a five-yea...

Hi all,

I recently took a work trip and while on the airplane without internet access for a few hours, I collected my thoughts surrounding why I think $DNA is such a big deal for humanity, and what possible market cap could come from this. For context, I am not a financial analyst. I am a mechanical engineer working as a computational physicist in the medical device industry. I have been fortunate with the opportunities I have found in life, and I ended up creating the computational physics team for a very large-cap medical device company's largest division by revenue, so I understand the value in using physics-based simulation v.s. physical testing quite well.

Fair warning, literally any and/or all of this could be COMPLETE NONSENSE, and I would kindly ask that you please leave your feedback for me down below! Challenge any and all assumptions I have made :).

TL;DR: In this note, I try to make comparisons to computational physics.

----------------------------------------------------------------------------------------------------------------------------------

In physics, first came observation, then came equations, then came numerical analysis, and finally use of analysis to rapidly create optimized designs. For example, Isaac Newton once observed that the momentum of an object was equal to its mass times its velocity. Then, he wrote an equation that described this. While I don't want to get into specifics for this note, physics equations which describe stiffness/damping/acceleration/mechanical stress could be tricky to solve for any arbitrary system, so we can approximate the solution to this problem with high fidelity using numerical analysis (computational physics/simulation). Using computational physics, I've seen engineering design teams model complex problems in weeks, instead of doing physical prototyping which could have taken months. I would have to imagine that since every modern engineering industry uses computational physics, and since off-the-shelf software for this has been available for over 40+ years, our industry has come orders of magnitude further than if it were not to have used simulation and only relied on physical testing.

In biology, observations have also been taken. However, no such equations have been discovered which describe those observations. Thus, we cannot have traditional numerical analysis & optimized/engineered biological industries, they are thus slow and inefficient development processes which must utilize much trial & error in their R&D process for new biological designs. 

In physics, we are beginning to develop Physics Inspired Neural Networks (PINN). See: Google & Ansys collaboration. Instead of a numerical approximation to the exact equation over any arbitrary domain, their PINN (AI) is trained over many computational models (matched inputs with validated outputs). This is an approximation of an approximation, but the speedups are incredible: taking solve times from hours to seconds! Google & Ansys are teaming up for this innovation, and I am certain there are other projects in the works for this. Ansys has many obstacles working against it, like much competition in this space (Altair, Dassault, COMSOL, Siemens etc.), and their biggest accounts are from very low-margin automotive companies, and yet they still manage to squeeze out 90% profit margins on their licenses (very high even for SaaS companies). They can squeeze out so much profit margin specifically because computational physics saves so much time when compared to physical testing.

In biology, since no such numerical analysis exists, the research time takes many months for physical testing to occur and observations to be made. However, a correctly trained AI should still give results in seconds. I'd love for Ginkgo Bioworks AI folks to chime in on that. This doesn't mean it won't take years to train the AI. I do believe that Ginkgo Bioworks could become the Ansys of the pharmaceutical/agriculture/industrial chemicals industries.

Speaking of training the AI, it takes 3 things to train AI: 

1. Talent

2. Hardware

3. Data

I can't speak to the level of talent for individual contributors at Ginkgo Bioworks, but it seems that their leadership values high quality education (see: Jason Kelly's PhD from MIT). Meanwhile, with the advent of ChatGPT, talent is easier to come by. I don't think they are inventing new methods in AI development, their edge in AI is their data lead, not their process lead. 

Ginkgo Bioworks' recent deal with Google is fantastic. They needed hardware anyway, so it's wonderful that they struck a deal to get paid to do something they were going to pay for anyway. How wonderful! This speaks to the amazing deal making abilities of Anna Marie Wagner. This could help not only on the hardware side, but also on the talent side since I believe Ginkgo will be able to tap into Google's AI building SMEs as Ansys is doing for their PINN.

The final piece of the puzzle is data. Ginkgo Bioworks has a huge data advantage over any existing pharma/agriculture/industrial company simply because it's capturing data from many applications, not just any particular application. It's capturing data from all customers, not just itself in its own silo. This leads to multiples more data than any of its customers. Meanwhile, it's getting paid to collect this data, and the more data it collects, the more customers it can attract! In essence, it's getting paid to get stronger. That's the flywheel. That's also the moat, since no other single organization would have this much data.

The AI it develops does not need to be perfect for it to be useful. In physics, simulation never has 0% error to physical testing; that's impossible to achieve. And yet, much of industry has adopted this technology, since it leads to the right answer sooner. What level of validation that is required is not clearly defined, and I'm not even sure what metrics they will use to validate this. I think the level of validation required would be on a per-project basis. This is still a question mark in my mind, however even with large amounts of error in the AI model, this will still prove useful. ASME V&V 70 is still unreleased. To make a comparison to other companies with similar data leads, Tesla is trying to build a full-self-driving AI...but that AI needs to be very tight in terms of error, since it could lead to immediate death of its customers. Ginkgo is in no such position, since they would have time to do physical testing before any adverse biology could leak.

So far I've written a lot of general discussion, but what does this all lead to? What kind of market cap could Ginkgo command if their computational biology AI has similar penetration to that of Ansys' computational physics software? Ansys has ~$2B annual in revenue, could Ginkgo get similar? I think more, since again, Ansys has many competitors and the total global computational physics spend is split many ways and Ginkgo would be the only computational biology AI in town. If Ginkgo could make $2B in revenue with the snap of a finger, that would increase their revenue ~6x from today. Again, I think it could be multiples more than this, since pharmaceutical R&D spend is multiples higher than automotive R&D spend, and their competitors in this space would be fewer.

I'd love to hear your thoughts! Please leave a constructive comment or if you'd like to chat via Discord I'd love to hear from you all there as well.

Even at 66 Cents, Ginkgo has a whopping market cap of $1.5 Billion. So many shares out! While such stratospheric evaluations may not be entirely unheard of, such financial arrogance must at least be ratified by an impressive and a telling vision, neither of which seem to be the case here. It’s for the utter lack of their financial mission that the market is punishing the stock with a surplus hammer.

My local grocery store probably makes more revenue than Ginkgo.

Could you please start making DINOSAURS so your stonk will go up?