NEW YORK – Bionano Genomics said after market close on Wednesday that it is slightly lowering its full-year revenue guidance due to underperformance of sales in China.
For 2024, the San Diego-based optical genome mapping company now expects revenues between $36.0 million and $40.0 million, down from a previous range of $37.0 million to $41.0 million.
"Given the slowdown that we are experiencing in China, we expect our full-year revenues to end up at the lower end of the range given previously, and therefore we are adjusting our full-year 2024 revenue guidance," Bionano President and CEO Erik Holmlin told investors in a conference call recapping the company's Q2 financial results.
Bionano's Q2 revenues for Asia-Pacific were $761,000, less than half the $1.6 million it booked in Q2 2023. The company did not provide a specific number for China but noted that revenues for the country in the prior-year period were about $1.3 million.
Holmlin attributed the underperformance in China to the company's original equipment manufacturer (OEM) partners falling behind with nanochannel array flow cell purchasing commitments during the quarter, which led to an estimated shortfall of sales of 1,200 flow cells.
The reasons behind that, Holmlin explained, were the economic slowdown in the country as well as the OEM partners waiting for regulatory approval from China's National Medical Products Administration (NMPA) for Bionano's Saphyr system, which will allow the platform to be sold directly into hospitals for clinical use.
While China led to the "most significant" year-over-year decrease in flow cell sales, according to Holmlin, it was not the only place contributing to Bionano's Q2 revenue shortfall. The company's revenues in the Americas, for instance, declined 21 percent year over year in Q2 from last year’s $4.3 million to $3.4 million.
Bionano's commercial execution also appeared to have taken a hit last quarter as a result of the firm's ongoing cost-cutting measures, which included massive layoffs earlier this year and last year.
Q2 is "the quarter where the majority of staffing reductions conducted [as part of] our cost-savings initiative took effect, which means we are learning how to operate within a streamlined team," Holmlin said, claiming that the reduced number of sales and field support staff is one of the reasons behind the decrease in flow cell sales in the Americas.
Additionally, Holmlin said the company has observed a "slowdown" in expected upgrades from existing customers who are transitioning from the Saphyr platform to the new Stratys system.
Moving forward, Holmlin said, company management will "remain vigilant" regarding further streamlining of its operations while trying to mitigate the negative impacts of the cost-reduction measures.
"We understand that we may see some slower growth in the adoption and expansion of optical genome mapping as a result of further expense reductions, but we believe that cash preservation and profitability are more important targets than growth at any cost," he said.
Looking at the Q2 financial results, Bionano booked $7.8 million in revenues, down 10 percent from $8.7 million in Q2 2023 and below the average Wall Street estimate of $8.0 million.
Of the total, $6.5 million was product revenues, representing a 2 percent decline from $6.6 million in the prior-year quarter. Service and other revenues dropped 38 percent to $1.3 million from $2.1 million in Q2 2023.
During the quarter, Bionano installed 16 new optical genome mapping systems, growing the total installed base to 363 instruments, which represents a 29 percent increase over Q2 2023.
The company sold 6,165 nanochannel array flow cells in Q2, a decrease of 13 percent from the 7,062 flow cells it sold during the year-ago period. This was the first quarter with a year-over-year decline in flow cell sales since the past 20 consecutive quarters, according to Holmlin.
Bionano's net loss for the quarter fell to $16.2 million, compared to a net loss of $38.9 million in Q2 2023. The firm did not report earnings per share. Analysts, on average, had expected a net loss of $.42 per share.
The firm's R&D expenses shrunk by more than half from $14.6 million a year ago to $6.8 million. Its SG&A expenses were down 57 percent to $11.6 million from $26.9 million in Q2 2023.
At the end of Q2, Bionano held $30.3 million in cash, cash equivalents, and available-for-sale securities, $11.4 million of which were subject to certain restrictions.
In early morning trade on the Nasdaq, Bionano's shares were up more than 1 percent to $.44.