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Bionano Genomics to Lay off One-Third of Workforce as Q4 Revenues Grow 30 Percent


NEW YORK – Bionano Genomics said after market close on Tuesday that it has initiated a new cost-savings plan that includes "a potential reduction in headcount" by more than one-third of the company’s employees.

The San Diego-based optical genome mapping company also reported a 30 percent year-over-year increase in Q4 and full-year 2023 revenues.

The latest restructuring, which aims to reduce Bionano’s annualized operating expenses by another $35.0 million to $40.0 million, will likely lead to the termination of 110 to 125 employees, trimming the total headcount to approximately 200 from 324 as of Tuesday.

In combination with the layoffs announced in May and October 2023, the company said it aims to lay off approximately 200 people in total, decreasing its annualized operating expenses by about $65.0 million to $75.0 million.

"Essentially all areas of the company will be impacted," Bionano President and CEO Erik Holmlin told investors in a conference call recapping the company’s fourth quarter financial results. "We recognize that we have gone through some significant product developments … so the incredible people who have helped us get to this point, we don't need as many of them going forward."

The workforce reduction will also impact the company’s global sales and marketing activities, Holmlin acknowledged, adding that one way for Bionano to balance this is to leverage distribution partners.

"What you will see is that maybe we are not going to be as ambitious about growing our commercial footprint globally and internationally across [Asia-Pacific] and the rest of the world," he said. Instead, "we'll maintain our very successful focus in Europe, the United States, and Canada."

During the call, Bionano CFO Gülsen Kama said the firm expects to see the full benefit of the headcount reduction starting in the first quarter of 2024. She also noted that the newly announced cost-savings initiative will come with associated costs, for which the firm will provide further information once it has finalized the plans.

In addition to the cost-reduction measures, Bionano also announced that it is phasing out its First Step and Next Step Dx clinical services as well as its Fragile X test, which are legacy, non-optical genome mapping tests that were offered through the company’s clinical service subsidiary, Bionano Laboratories, which resulted from its 2020 acquisition of Salt Lake City-based diagnostic service provider Lineagen.

In 2023, these testing services generated around $7.0 million in revenues, making up roughly 19 percent of Bionano’s total revenues, the company said.

"We have made the difficult decision to phase out some of our clinical services products that we sell directly to physicians," Holmlin said. "One of the reasons that we decided to discontinue the services products was that there are a fair number of people associated with generating those revenues, so that allows us to meet part of that headcount target in a single move."

The move will also allow the company to streamline its operating structure and focus more on the core OGM products, he added.

According to a filing with the US Securities and Exchange Commission on Tuesday, Bionano plans to close down its Salt Lake City CLIA lab, as it has terminated its lease on Feb. 28, 2024. The lease termination, which will take effect after June 2024, will result in a one-time fee of approximately $200,000 in the third quarter, the company noted.

Bionano maintains another CLIA laboratory in San Diego, where it carries out all research and development activities and OGM services, according to the filing. All of its molecular diagnostics services had been offered through its Salt Lake City lab.

The company also said it plans to "continue exploring strategic opportunities" to maximize stakeholder value, such as debt financing, equity investments, combinations with other companies, or the sale of all or part of the company.

For the three months ended Dec. 31, Bionano booked $10.7 million in revenues, representing a 30 percent increase from $8.2 million a year ago. This exceeded analysts' average estimate of $10.6 million and was in line with preliminary results announced in January.

Q4 product revenue rose 32 percent to $8.2 million from $6.2 million in Q4 2022, while service and other revenue grew 25 percent to $2.5 million from $2.0 million.

During the fourth quarter, the company’s installed base of OGM systems grew by 25 to 326 instruments. Additionally, it sold 7,980 nanochannel array flow cells during Q4, representing 67 percent year-over-year growth from 4,781 flow cells sold in the same period in 2022.

The company's Q4 R&D expenses dropped 16 percent year over year to $11.7 million from $14.0 million, while its SG&A costs declined 38 percent to $15.7 million from $25.3 million.

The firm's net loss for the quarter was $43.9 million, compared to a net loss of $38.7 million a year ago. It did not report a per-share loss. On average, Wall Street analysts were expecting a per-share loss of $.87 for Q4 2023.

For full-year 2023, Bionano's revenues were $36.1 million, a 30 percent increase from $27.8 million in 2022. This slightly exceeded the average Wall Street estimate of $36.0 million and was at the top end of the previously stated guidance range of $35.8 million to $36.1 million.

Product revenue rose 31 percent to $26.7 million from $20.4 million in 2022, while service and other revenue was up 27 percent to $9.4 million from $7.4 million.

The installed base of OGM systems grew 36 percent in 2023 from 240 installed systems at the end of 2022. The firm sold 26,444 flow cells during 2023, up 72 percent over the 15,375 flow cells sold in 2022.

The company's R&D expenses for 2023 were $54.0 million, up 10 percent from $49.0 million in 2022, and its SG&A expenses rose 6 percent to $93.5 million from the prior year’s $88.6 million.

Bionano's full-year net loss was $232.5 million compared to a net loss of $132.6 million in 2022. The firm did not report a loss per share, which Wall Street estimated at $6.61 per share.

As of Dec. 31, 2023, Bionano had $17.9 million in cash and cash equivalents, $48.8 million in investments, and $400,000 in restricted cash. Last week, the company announced an amendment to its 2023 convertible debt financing to restructure its debt, providing it with immediate access to $30 million of near-term liquidity and access to up to another $25 million from a restricted cash account.

Bionano now expects full-year 2024 revenue in the range of $37.0 million to $41.0 million. The company anticipates Q1 2024 revenue to be between $8.25 million to $8.75 million.

In Wednesday morning trading on the Nasdaq, Bionano's shares were down almost 8 percent at $1.10.