Ginkgo Bioworks to Close Traditional Labs and Spin Off Biosecurity Unit

Ginkgo Bioworks is closing its traditional non-automated labs, spinning off its biosecurity unit and shifting its business to developing and selling AI-powered laboratory robots. The company has recorded total net losses of $6 billion since 2020. Revenue from its synthetic biology services unit fell 24 percent last year to $133 million, less than one-eighth of the amount forecast when the company went public in 2021.

The synthetic biology services business has declined for three straight years. Higher interest rates reduced life sciences funding and increased competition from China contributed to the downturn, particularly in the Boston area. The company has already cut hundreds of jobs and its stock price has fallen more than 95 percent from a peak valuation of $20 billion in 2021.

The company maintains a 50-robot automated lab at its Seaport offices in Boston.

The company struck a $47 million deal in December to provide almost 100 lab robots to the Department of Energy’s Pacific Northwest National Laboratory. The robots, called Reconfigurable Automation Carts, have wheels and robotic arms and can prepare, cultivate and measure thousands of samples.

The company plans to sell access to its automated lab over the cloud to smaller companies and individual scientists for as little as $39 per experiment. Larger fully automated systems will be sold to big drug companies and universities. The company has existing agreements with OpenAI and Google to develop AI and cloud systems for biotech research.

A company executive said the goal is to replace the traditional lab bench with automated systems that can operate nearly 24 hours a day, seven days a week, with minimal human staffing.

The company’s shares rose 17 percent in the first two months of the year but dropped about 30 percent in the three days after the new strategy was announced. Most of the decline occurred before a broader market drop linked to the war in Iran. An analyst at William Blair & Co.

wrote that the company is positioning itself within the AI drug discovery sector. The company stated that lower-cost automated research could help revive Boston’s life sciences sector.