Josh

Josh asked about the gross margin expectations for Q2 and the rest of Fiscal 2026, specifically if sequential improvements should still be anticipated given the level of investments being made.

Answer

Adam Laponis, CFO of Twist Bioscience, stated that Q1's 52% gross margin validated their manufacturing engine. He explained that while continued gross margin improvements are expected throughout the year, they will be moderated due to strategic investments in operators, automation, and new product launches, prioritizing long-term revenue growth over short-term margin maximization. He reiterated the 75%-80% incremental revenue drop-through to gross margin over time and the commitment to Adjusted EBITDA break-even in Q4.

Josh inquired about the current lead time between receiving ZEVASKYN Product Order Forms (ZPOFs) and initial patient identification efforts, and whether this lead time is expected to decrease as patient demand grows.

Answer

Chief Commercial Officer Madhav Vasanthavada stated that the lead time is expected to decrease over time, noting that some patients with ZPOFs received months ago are now scheduled for biopsy. He mentioned that the process was about three months from patient identification to prior authorization on the Q2 call. CEO Vishwas Seshadri added that the recent publication of payer policies should help reduce future lead times by eliminating the need for exceptions. Madhav Vasanthavada emphasized that the company's experienced team and payer receptivity are also contributing to process streamlining.

Josh (Stifel) sought insight into the current lead time between receiving ZEVASKYN Product Order Forms (ZPOFs) and initial patient identification efforts, and whether this lead time is expected to decrease as patient demand grows.

Answer

Madhav Vasanthavada (Chief Commercial Officer, Abeona) indicated that the lead time is expected to decrease over time, noting that some ZPOF patients received months ago are now scheduled for biopsy. He mentioned that the process, previously estimated at about three months from patient identification to prior authorization, should shorten as payer policies are now in place and centers gain more experience. Vishwas Seshadri (CEO, Abeona) added that the recent publication of payer policies, which were not available for the very first patients, should help reduce future lead times by eliminating the need for exceptions.

Josh asked how to bridge the Q4 2025 margin into 2026, seeking clarity on main drivers and any unusual factors. He also inquired about the impact of key platform volumes and a richer mix towards off-road performance trims on Dana's powertrain changes.

Answer

Senior Vice President and CFO Timothy Kraus clarified that the Q4 run rate is highly indicative of the 10-10.5% margin target for 2026, driven by the full run rate of $310 million in cost savings and the removal of stranded costs. He emphasized that achieving the 2026 target is not expected to be difficult. Mr. Kraus also noted that a richer mix towards models like the Jeep Wrangler Rubicon and Bronco, along with increased Super Duty production, benefits Dana due to higher content and larger axles.