Good day everyone,
Bionano Genomics, Inc. (NASDAQ: BNGO).
Bionano Genomics operates as a life sciences instrumentation company in the genome analysis space.
We were familiar with the company and decided to dig a little deeper. A quick look at the stock chart indicated the company shares gained 2200% over the past 5 weeks, starting at $.56/share on December 21st and closing at $12.58 on January 25th. That’s a remarkable gain and we wanted to know why. Moreover, we wanted to see if our acquaintances claim of another 300% in gains could be possible.
We always look for value in a company first. Have the shares been oversold? What is the P/E and P/S ratios? What is the current RSI (14)? Nothing about the financial metrics says value shares to us.
Share price $11.79.
Outstanding (est.) 271.8M shares
Market cap $322B
RSI (14) 70.59
Revenues (ttm) $7.3M
Then we wondered if BNGO could be a “wallstreetbets” type short squeeze scenario. We don’t think so. Maxim Group just raised their BNGO target to $14/share and analysts don’t generally raise a target price to chase a short squeeze. Even GameStop doesn’t have an analyst’s target over $33/share.
Jason McCarthy, of Maxim Group, raised his price target for Bionano Genomics’ stock to $14 from $2. McCarthy mentioned the recent presentations Bionano Genomics held that focused in part on the company’s Saphyr Optical Genome Mapping Instrument as they helped build awareness for the company’s potential in the fields of cytogenetics and genomics.
The company develops and markets the Saphyr system, a platform for ultra-sensitive and ultra-specific structural variation detection that enables researchers and clinicians to accelerate the search for new diagnostics and therapeutic targets, and to streamline the study of changes in chromosomes, which is known as cytogenetics. The Saphyr genome mapping system appears to be superior to any current methods.
Large structural genome variations are responsible for many diseases and conditions, including cancers and developmental disorders. Optical genome mapping (proprietary to the Saphyr System) detects structural variations ranging from 500 bp to megabase pairs in length and offers assembly and discovery algorithms that far outperform sequencing-based technologies in sensitivity.
So how can BNGO and the Saphyr technology impact the medical sector? The level of genome testing offered by the Saphyr System will change the accuracy and time needed for a medical diagnosis. It can detect gene variations that can identify cancer with specificity, and genetic diseases such as Alzheimer’s.
Saphyr can help detect structural variations in solid tumors helping the pharmaceutical industry develop better and more effective cancer medicines.
The testimonials and data from the initial use of the Saphyr System have just started to be published and the results are good. We’ve listed a few of them here, but there are many more. Their optical genome mapping is a breakthrough in the genetics sector.
This week, the company announced the publication of a study that measured DNA methylation, the chemical modification of the DNA that controls gene regulation, of the various regions regulating cancer genes on single DNA molecules.
Two weeks ago, Bionano Genomics published a study that used Saphyr to identify structural variants (SVs) in genes that control immune and inflammatory responses. The presentations by scientists and clinicians from leading hospitals and research institutions in Europe and the US showed that Saphyr was able to detect structural variants that may predispose to severe or mild COVID-19 disease. The results of the study could shed light on why COVID-19 causes some people to become severely ill.
Also two weeks ago, a researcher at The M.D. Anderson Cancer Center, published the results of a comparison study of Saphyr against standard of care methods for the analysis of cancer genomes.
BNGO is also providing diagnostic testing for those with autism spectrum disorder (ASD) and other neurodevelopmental disabilities through its Lineagen business acquired last year. Lineagen has been providing genetic testing services to families and their healthcare providers for over nine years and has performed over 65,000 tests for those with neurodevelopmental concerns.
Potential Revenues:
The Saphyr system is available for research use-only per FDA licensing and approval currently completed on the system and tests it performs so revenues from system sales is currently limited.
The Saphyr System sells for $150,000 – $300,000 and the chip clip, used for each genome test costs $450. Customers can also send their samples to Bionano for processing and pay $650-$750 each.
BNGO is still on the launch pad. Their Saphyr technology is still limited to research labs by the FDA. Eventually Saphyr could be in every diagnostic lab (like Quest), and every hospital, creating significant revenues for the company. Maybe more importantly, the Saphyr System could impact the genetics sector as much as CRISPR technology has. Saphyr could be a game changer.
There isn’t much in the way of financial metrics, now or in the near term, to support the sudden rise in BNGO’s value. But although the price seems dislocated and recent capital raises are based in much lower valuations BNGO has the technology of the future and THAT seems to have investors excited.
The Traders News Group
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