Ginkgo Bioworks announced a five‑year collaboration with the Institute for Genomic Biology at the University of Illinois Urbana‑Champaign, backed by a $29 million award from the Advanced Research Projects Agency for Health (ARPA‑H). The partnership, named Microbe/phage Investigation for Generalized Health TherapY (MIGHTY), will leverage Ginkgo’s EncapS high‑throughput screening platform to identify phage candidates that target specific bacterial populations in the oral microbiome, with the goal of developing oral health therapeutics.
In its most recent earnings release, Ginkgo reported Q3 2025 revenue of $39 million, down 56% year‑over‑year but slightly beating analyst estimates of $38.85 million. The decline was largely driven by a $45 million non‑cash deferred‑revenue adjustment from the prior year; excluding that adjustment, revenue fell 11% YoY. The company posted a GAAP net loss of $81 million, compared with a $56 million loss in the same quarter last year, and an EPS loss of $1.45 versus an expected $1.24. Management reaffirmed full‑year 2025 revenue guidance of $167–$187 million, indicating confidence in the company’s long‑term trajectory despite short‑term profitability challenges.
The earnings miss can be traced to a combination of factors. Revenue in the Cell Engineering segment dropped from $75 million to $29 million, reflecting weaker demand for engineered cell products and a shift in customer priorities toward more cost‑effective solutions. Biosecurity revenue fell from $14 million to $9 million, partially offset by the new ARPA‑H partnership, which is expected to generate incremental revenue over the next five years. Operating costs increased due to higher R&D spend on the MIGHTY program and additional regulatory compliance expenses, compressing margins and contributing to the widened loss. The $45 million deferred‑revenue adjustment, while non‑cash, also distorted the year‑over‑year comparison and obscured the underlying operational performance.
Analysts reacted to the earnings miss with a mix of caution and optimism. Several research firms downgraded the company to “sell” or “reduce” while adjusting price targets downward, citing the persistent loss and margin pressure. However, the announcement of the ARPA‑H grant was viewed positively, with some analysts noting that the partnership could diversify Ginkgo’s revenue streams and position the company in the growing phage‑therapy market. The overall sentiment remained mixed, reflecting the tension between short‑term financial headwinds and long‑term strategic opportunities.
Ginkgo’s CEO Jason Kelly emphasized that the MIGHTY partnership aligns with the company’s broader strategy to shift toward fee‑for‑service revenue and accelerate the commercialization of its tools. “The EncapS platform gives us a unique advantage in rapidly identifying phage candidates, and this collaboration will help us bring oral health therapeutics to market faster,” Kelly said. CFO Steve Coen highlighted a significant reduction in cash burn due to restructuring and reaffirmed the company’s confidence in meeting its full‑year guidance, noting that the new partnership would contribute to future revenue growth and help offset current operating losses.
The partnership represents a strategic pivot for Ginkgo, moving beyond its traditional synthetic biology offerings into the emerging phage‑therapy space. By combining ARPA‑H funding with the University of Illinois’s expertise, Ginkgo can accelerate discovery and development of targeted oral health treatments, potentially opening new markets and creating a pipeline of high‑margin products. The collaboration also strengthens Ginkgo’s relationships with federal research agencies, positioning the company for future funding opportunities and reinforcing its reputation as an innovative biotech platform provider.
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