Bionano Genomics (BNGO) Q3 Earnings call transcript Nov 13, 2024
2min read Bionano Technologies Inc., a pioneer in optical genome mapping for routine use in cytogenetics and software business, recently shared its financial results for the third quarter of 2024, along with key updates on the company's strategic initiatives. The call, led by CEO and Principal Financial Officer, Dr. Erik Holmlin, provided valuable insights into Bionano's current financial health and future prospects.
Financial Highlights and Strategic Shifts
Bionano reported a revenue of $6.1 million for the third quarter, with $6.6 million in sales of core products and software. The revenue, however, was offset by a write-down of aged receivables from discontinued clinical services products, resulting in a 35% year-over-year decrease compared to the same period in 2023. The company's revenue decrease also includes a 29% reduction in revenues tied to discontinued clinical services products and a shift away from instrument sales in certain regions. Despite the challenges, Bionano's installed base of 368 systems grew by 22% over the previous year.
In response to the financial challenges, Bionano has undertaken a series of cost-saving measures. The company has reduced its headcount from around 426 employees in May 2023 to 125 as of September 30, 2024, with further expectations to reduce it to less than 100 employees entering 2025. Bionano also shifted its go-to-market strategy to focus on driving utilization of consumables across customers who use optical genome mapping routinely. This shift has led to a return to growth in consumable sales, particularly in connection with sales of OGM consumables to customers using it routinely as a replacement for karyotyping and FISH, especially in analysis of hematological malignancies, constitutional genetic diseases, and bioprocessing applications such as cell and gene therapy.
Key Initiatives and Financial Metrics
Bionano's key initiatives include the development and commercialization of its Saphyr and Stratys systems, which are gaining traction in the market. The company has continued to ship commercial production units of the Stratys system and has seen good demand for it in focused geographies like Europe, the U.S., Canada, and Israel. Bionano also reported a significant reduction in operating expenses and cash burn, with a non-GAAP operating expense of $16.1 million in the third quarter, a 49% decrease from the third quarter of 2023. This reduction in expenses is a testament to Bionano's strategic focus on cost savings and cash efficiency.
Looking Ahead
Looking forward, Bionano expects to maintain its focus on driving the adoption of its VIA software for analysis of optical genome mapping across routine use sites. The company is also working on initiatives to improve the gross margin profile by reducing the cost of goods sold and increasing sample pull-through. Bionano expects Q4 revenues to be in the range of $6 million to $7 million, with an OGM installed base of 370 to 380 systems. The company's full-year revenues are projected to be in the range of $28 million to $30 million, reflecting a slower growth rate due to expense reductions.
Analyst Insights
During the Q&A session, analysts probed into Bionano's strategy, financial performance, and future prospects. Analysts were particularly interested in updates on the status of the Ionic Sample Prep system, the growth potential of target accounts, and the company's cost of goods sold (COGS). Bionano's management provided detailed insights into these topics, highlighting the company's focus on cost savings, strategic shifts, and future growth opportunities.
Conclusion
Bionano's third quarter financial results and strategic updates offer a comprehensive view of the company's financial health and future prospects. The company's focus on cost savings, strategic shifts, and product development is well-aligned with the current market dynamics and regulatory landscape. Bionano's optimistic outlook for Q4 and the full year reflects the company's confidence in its strategic initiatives and financial management. As Bionano continues to navigate the complexities of the genetic testing market, its innovative solutions and strategic focus on cost efficiency are expected to position it well for future growth.