Ginkgo Bioworks Announces Strategic Biosecurity Segment Transaction with Tower Biosecurity

Key Highlights

• Completion of Major Transaction: On April 3, 2026, Ginkgo Bioworks, Inc., a wholly owned subsidiary of Ginkgo Bioworks Holdings, Inc. (“Ginkgo” or “the Company”), finalized a significant strategic transaction with Tower Biosecurity, Inc. (also known as Perimeter Systems, Inc.) and Ginkgo Biosecurity, LLC.
• Biosecurity Segment Divestiture: As part of the deal, Ginkgo contributed all the issued and outstanding equity interests of Ginkgo Biosecurity, LLC—representing substantially all of its Biosecurity segment operations—to Tower Biosecurity.
• Equity Stake in Purchaser: In exchange, Ginkgo received approximately 20% of the fully diluted equity of Tower Biosecurity, Inc. This stake will be accounted for under the equity method in Ginkgo’s financial statements.
• Strategic Shift and Discontinued Operations: This transaction is considered a strategic shift for Ginkgo. As a result, beginning with its Q1 2026 financial results, all historical financial results of the Biosecurity segment will be reported as discontinued operations.
• Pro Forma Financial Impact: Pro forma financial statements have been prepared to illustrate the effects of the transaction on Ginkgo’s financials, including the removal of Biosecurity segment results and the recording of the new investment in Tower Biosecurity.

Details and Implications for Investors

Ginkgo Bioworks’ completed divestiture of its Biosecurity segment marks a pivotal moment for the company, reflecting a major strategic realignment. By transferring the entire Biosecurity business to Tower Biosecurity, Inc., Ginkgo has effectively exited a segment that contributed substantial revenue but also significant costs and losses.

Transaction Structure and Accounting

• Ginkgo now holds an approximately 20% equity stake in Tower Biosecurity, to be recorded as an investment and accounted for under the equity method.
• The transaction involved the transfer of assets and liabilities related to the Biosecurity segment, as well as the recognition of new investments on Ginkgo’s balance sheet.
• The company has entered into a Transition Services Agreement (TSA) with Tower Biosecurity to provide certain transitional services on a temporary basis; these are not expected to have a material impact and are not recurring.

Financial Impact and Pro Forma Results

The pro forma unaudited financial results for the years 2023, 2024, and 2025 show the effect of removing the Biosecurity segment from Ginkgo’s consolidated results and adding the new investment in Tower Biosecurity:

• 2025 Pro Forma Results:
  • Total revenue drops from \$170.2 million to \$132.7 million with the removal of Biosecurity revenue.
  • Net loss improves from \$(312.8) million to \$(287.8) million, reflecting lower costs after divestiture, but the company remains deeply unprofitable.
• 2024 Pro Forma Results:
  • Total revenue decreases from \$227.0 million to \$174.0 million post-separation.
  • Net loss improves from \$(547.0) million to \$(507.6) million after the transaction.
• 2023 Pro Forma Results:
  • Revenue falls from \$251.5 million to \$143.5 million after removing Biosecurity operations.
  • Net loss improves from \$(892.9) million to \$(874.8) million.
• Balance Sheet Impact (as of December 31, 2025):
  • Total assets increase slightly from \$1.12 billion to \$1.13 billion, primarily reflecting the new investment value.
  • Stockholders’ equity increases by \$11.2 million after transaction-related adjustments.

The pro forma statements are illustrative and not necessarily indicative of future performance.

Potential Price-Sensitive Factors for Shareholders

• Strategic Refocus: The divestiture allows Ginkgo to focus on its core Cell Engineering business, potentially improving profitability and operational efficiency over time.
• Equity Upside in Tower Biosecurity: Ginkgo retains exposure to the Biosecurity business through its 20% equity stake in Tower Biosecurity, which could provide upside if the business performs well post-transaction.
• Improved Financial Clarity: Reporting Biosecurity as discontinued operations may result in clearer financial statements and potentially improve investor confidence in the remaining business.
• Ongoing Losses: Despite the transaction, Ginkgo remains significantly unprofitable, and investors should closely monitor the company’s path to profitability.
• Transaction Uncertainties: The final valuation of Ginkgo’s equity in Tower Biosecurity is preliminary and may be subject to change, which could affect future financial results.

Conclusion

The separation of Ginkgo’s Biosecurity segment is a transformative event for the company and its shareholders. While it reduces operational complexity and losses associated with the divested business, the company’s future performance will depend on the success of its core Cell Engineering operations and the potential value realization from its equity interest in Tower Biosecurity.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should refer to Ginkgo Bioworks Holdings, Inc.’s official filings and consult their own financial advisors before making any investment decisions. The pro forma financials presented are unaudited and provided for illustrative purposes only; actual results may differ materially.

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