Buying Bionano: Stock soars early in the year
Bionano Genomics, Inc. has had its ups and downs in the early months of 2021, but some analysts think the best is yet to come. The recent news that two large labs belonging to the National Health System of the United Kingdom adopted Bionano’s Saphyr system for optical genome mapping pushed stock prices up in April, MSNBC reported.
The British labs are using the Saphyr system to characterize the genomes of patients with heme malignancies. One of them is also evaluating Saphyr for the detection of structural variants in patients with developmental delay, infertility, rare disease and other genetic diseases. The Saphyr adoption has been through the company's reagent rental program, which includes a commitment to purchase consumables over time in connection with the placement of a system.
At the beginning of the year the company discussed the progress and strengths of its optical genome mapping (OGM) technology at a five-day symposium. Then Bionano raised $335 million in operations including public stock offerings. The stock soared more than 400 percent from the start of the year through a peak in February, reported Adria Cimino of The Motley Fool.
Then, shares dropped more than 50 percent. Then, the recent announcement made them rise again, adding 3.33 percent to $5.57.
In genome analysis, optical genome mapping (OGM) enables researchers to find large structural variations, an important step in testing for genetic diseases. OGM and next-generation sequencing seem to be complementary technologies.
Last year the coronavirus pandemic hurt the genomic testing market. Bionano's full-year revenue dropped 16 percent to $8.5 million, and the company suffered a net loss. Still, Bionano showed growth, increasing installation of the Saphyr system to a total of 97 last year. Bionano's acquisition of Lineagen – which offers diagnostic testing for neurodevelopmental disorders -- increased fourth-quarter revenue by 43 percent to $4 million.
The Lineagen acquisition and Saphyr’s success, it could be a big year for Bionano. In the third quarter, Bionano plans to launch prenatal assays and broaden its selection of pediatric assays. Another priority is increasing the number of published studies showing Saphyr's capabilities. Results from pediatric clinical studies in the fourth quarter could help Bionano to sign on new customers and encourage reimbursement by third-party payers in the U.S.
In the fourth quarter, Bionano expects to complete its prototype of a next-generation Saphyr to serve both community cytogenetics labs and higher-throughput operating labs. It could produce a fourteenfold increase in the number of Saphyr-analyzed genomes per year.
Bionano anticipates more Saphyr installations this year. It predicts a 50 percent year-over-year increase to 150 systems.
The company claims that the prenatal and pediatric market totals about $3.5 billion. As more and more tests are routinely performed on newborns, this figure could go up precipitously. Bionano’s gains could just be beginning. While the genomics field always can be affected by new technologies grabbing a big market share, for aggressive investors willing to take a risk, “Bionano is a great stock to buy in April,” Cimino concluded.