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  "docSlug": "5fadb686cc03",
  "documentTitle": "Twist Bioscience (TWST)",
  "authorId": "58_Scorpion_Capital",
  "authorName": "Scorpion Capital",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2022-11-15 00:00:00",
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  "notes": "The slide uses red circles and lines to draw attention to specific data points in the table that support the argument of suspicious R&D spending.",
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      "kind": "callout",
      "text": "Trend has become even more troubling over last 8 quarters, as R&D as % sales has almost doubled to 66%, exceeding COGS which is 55% of sales.",
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      "kind": "callout",
      "text": "On an annual basis, R&D as % of sales has spiked from 48% to 60% despite revenue doubling",
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      "kind": "callout",
      "text": "We struggle to understand how a manufacturer can report R&D expenses significantly higher than direct labor and materials costs.",
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      "text": "R&D as % of sales: 66%",
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      "text": "The recent trend in R&D expenses is even more unusual. R&D as a percent of sales has spiked from 48% in 2020 to 60% in the last 12 months - while revenue has doubled, which should drive down a mostly fixed expense not tied to revenue. The trend became even more troubling in the last two quarters, with R&D rising to 66% of sales, while COGS was a mere 55%. We struggle to understand how a manufacturer can report R&D expenses significantly higher than direct labor and materials costs.",
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      "text": "Source: Capital IQ data;",
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      "text": "Financial table showing Revenue, COGS, and R&D from 2016 to LTM 6/30, and quarterly data from Sep-20 to Jun-22.",
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