Bionano Genomics, Inc. (NASDAQ:BNGO) is a provider of genome analysis solutions that can enable researchers and clinicians to reveal answers to challenging questions in biology and medicine. The company's mission is to transform the way the world sees the genome through optical genome mapping (OGM) solutions, diagnostic services, and software.

Financials

In the first quarter of 2024, Bionano reported revenue of $8.8 million, representing an 18% year-over-year increase compared to the same period in 2023. Excluding $1.4 million in revenues from discontinued clinical services, core revenues were $7.3 million, which represents a 21% year-over-year growth over the $6.1 million of core revenues for the same period in 2023. The company's OGM installed base grew to 347 systems during Q1 2024, an increase of 21 systems during the quarter and 34% growth over the installed base of 259 at the end of Q1 2023. Bionano also sold 8,249 flow cells in Q1 2024, a 58% year-over-year increase over the 5,226 flow cells sold in the same period last year.

For the full year 2023, Bionano reported annual revenue of $36.1 million and a net loss of $232.5 million. The company's annual operating cash flow was -$129.7 million, and its annual free cash flow was -$131.4 million.

Bionano's GAAP gross margin for the first quarter of 2024 was 32%, compared to 28% during Q1 2023. The company's non-GAAP gross margin was 34% in Q1 2024, compared to 30% in the same quarter last year. First quarter 2024 non-GAAP gross margin excludes $128,000 in stock-based compensation and $11,000 of restructuring expense.

GAAP operating expense for the first quarter of 2024 was $33.9 million, while non-GAAP operating expense was $24.7 million. Non-GAAP operating expense in the quarter excludes restructuring costs, stock-based compensation, and other adjustments. In the same period in 2023, GAAP operating expense was $39.9 million, and non-GAAP operating expense was $33.6 million.

Liquidity

As of March 31, 2024, Bionano had $53.2 million in cash, cash equivalents, and available-for-sale securities, compared to $102.3 million as of December 31, 2023. The company raised $15.1 million in net proceeds in the first quarter of 2024 through its ATM facility. The change in total cash balance from December 31, 2023, to March 31, 2024, consists of $19 million cash burn from operating activities, excluding interest and debt retirement fees, $9 million in interest and debt retirement fees, $37 million in repaid principal, offset by $15 million in net ATM proceeds.

Recent Developments

Bionano has taken steps to continue to streamline operations, reduce expenses, and extend its cash runway. The company's non-GAAP operating expenses in the first quarter of 2024 are consistent with its planned reductions announced in October 2023. In March 2024, Bionano expanded its cost-saving initiatives to include further reductions in force and reductions to discretionary spending unrelated to headcount. Overall, since May 2023 through Q2 of 2024, the company plans to have reduced headcount by over 200 people. Compared to the annualized non-GAAP operating expense for the first quarter of 2023, these initiatives are expected to reduce annualized non-GAAP operating expenses by about $65 million to $75 million by Q1 of 2025.

In April 2024, Bionano announced a registered direct offering priced at the market under NASDAQ rules, with gross proceeds to the company of approximately $10 million before deducting the placement agent fees and other offering expenses payable by the company. The company believes these activities will allow it to remain committed to its customers and partners and to continue expanding the opportunity and availability of OGM.

Business Overview

Bionano's strategy moving forward is to continue to accelerate revenue growth, operate efficiently, and raise capital that will allow the company to extend its cash runway on a path to profitability. Key updates to the company's product portfolio include the Stratys system, which is now fully commercially available, and early feedback from adopters has been positive. Bionano also plans to announce a series of major advancements to its suite of comprehensive analysis software tools for cancer, including Version 7.1 of its VIA software, which has AI-enhanced capabilities for cancer research.

In the second half of 2024, the company plans to release improvements to the data analysis processing time on the Stratys Compute, a high-performance workstation developed in collaboration with NVIDIA. Bionano is also addressing the DNA isolation bottleneck with isotachophoresis technology on the Ionic system, which was acquired in the company's acquisition of Purigen Biosystems. The company placed a precommercial system in the field for optical genome mapping on the Ionic system using a newly developed ITP cartridge for the isolation of ultra-high molecular weight DNA in the fourth quarter of 2023 and has recently added two more customer sites. Bionano is on track for a full commercial release of the Ionic system in the third quarter of 2024.

The company's objective in assembling this combination of solutions, including high-throughput data collection with Stratys, streamlined analysis and reporting with VIA, and automated DNA isolation with Ionic, is to enable optical genome mapping at scale for routine use. Bionano recently announced that Dr. Alexander Hoischen and his team at Radboud University Medical Center in the Netherlands have been awarded a grant of EUR 900,000 for the translation of optical genome mapping to routine use in an academic medical center, where they will focus on leukemias, solid tumors, and constitutional genetic diseases.

In terms of market development, the first quarter of 2024 saw the highest number of optical genome mapping publications in any quarter in Bionano's history, with 97 total publications, which is up 83% compared to the number of publications in the first quarter of 2023. The company's clinical studies are now streamlined based on its cost-saving initiatives and are focused primarily on advancing the heme trial, while publishing more pre- and postnatal study data from the constitutional trials.

Bionano is also eagerly awaiting the outcome of an application that has been submitted to the American Medical Association for a Category 1 CPT code covering optical genome mapping. The application will be reviewed at the CPT editorial panel meeting starting on May 9, 2024. The company views the fact that the application will go in front of the panel as a sign of progress, as the previous two cycles were withdrawn prior to the editorial panel meeting.

Outlook

Looking ahead, Bionano remains on track to meet its goal of installing 381 to 401 OGM systems by the end of 2024, which reflects some anticipated Saphyr to Stratys upgrades. The company expects Q2 2024 revenue guidance to be in the range of $7.8 million to $8.2 million and is maintaining its full-year 2024 revenue guidance of $37 million to $41 million. Both of these ranges take into account the financial impact of discontinuing certain clinical services products as part of Bionano's cost reduction initiatives.

Conclusion

Bionano Genomics is making significant progress in transforming the field of cytogenetics through its optical genome mapping solutions, diagnostic services, and software. The company's focus on cost savings, strategic productivity initiatives, and product portfolio advancements positions it well to navigate the current capital market challenges and continue driving the adoption and utilization of OGM across multiple end markets.