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Bionano Genomics' Stock Spikes on Study Showing Strength of Structural Variation Detection Tech

NEW YORK – Shares of Bionano Genomics were up more than 40 percent in Wednesday afternoon trading after the company highlighted the results of a recently published preprint study demonstrating the superiority of its optical mapping technology for detecting large structural variations (SVs) in de novo sequencing data.

In a paper posted last week on the BioRxiv preprint server, researchers from the Human Genome Structural Variation Consortium presented a resource of phased genome assemblies corresponding to 64 haplotypes from 32 diverse human genomes.

The consortium assembled the genomes using a phased approach combining long-read Pacific Biosciences whole-genome sequencing and Strand-seq data, and further focused on uncovering novel SVs using supporting technologies such as Bionano's Saphyr platform "with the goal of comprehensively understanding the full complexity of SVs, including regions that cannot yet be resolved by long-read sequencing," the study's authors wrote.

Although the paper was not intended to be a head-to-head comparison of the PacBio and Bionano platforms, Bionano noted in a statement that the researchers' sequencing method, based on PacBio HiFi reads, detected only 72 percent of the large SVs detected by BioNano's optical genome mapping across the 32 genomes.

Further, Bionano noted, the cost of the consortium's custom sequencing method combining PacBio and Strand-seq is estimated to be between $10,000 and $20,000 per genome, whereas optical genome mapping with Saphyr costs less than $500 per genome.

Bionano also pointed out that the PacBio-based sequencing method did uniquely detect some large SVs, most of which were identified by optical genome mapping in further analyses but were classified differently. Overall, less than 2 percent of the large SVs detected using the PacBio method were missed by analysis with Saphyr.

"Something else worth noting in these studies is that longer read lengths improve the accuracy of SV calls," Bionano Genomics CEO Erik Holmlin said in a statement. "With PacBio's focus on matching Illumina-like read quality, their HiFi reads are significantly shorter than their traditional long reads. By contrast, Saphyr images molecules that are consistently 20 to 30 times longer than PacBio reads. Sequencing reads are not getting longer, which we believe implies that Saphyr will remain the only effective and affordable technology currently capable of detecting the structural rearrangements in the genome that are involved in disease."

In an emailed statement, PacBio CSO Jonas Korlach said that the company is "grateful that PacBio was used as a foundational technology in this exciting study, revealing the vast majority (greater than 100,000) of the unique structural variants reported, spanning the full size spectrum of genetic variation."

"In contrast, optical mapping was limited to SV information for variant sizes [greater than] 5 kb, contributing [approximately] 1,600 unique variants," Korlach noted. "In addition, PacBio sequencing provides both exact and sequence-resolved SV breakpoints as well as the actual sequences of insertions, both of which Bionano Genomics technology does not."

Nevertheless, for Bionano, investors reacted favorably to the news, driving the company's stock up more than 40 percent to $.78 in Wednesday afternoon trading on Nasdaq.

In a research note issued Wednesday, Openheimer analyst Kevin DeGeeter maintained Bionano's Outperform rating and set a price target of $1.50 on the company's stock, noting that the results of the study "confirmed Saphyr's unique clinical application based on superiority in resolving SV complexity relevant in cancer; added sensitivity in detecting indels in regions related to neurodevelopment; and cost-effectiveness compared to sequencing technologies."

DeGeeter also said that Oppenheimer expects the data "to support broader adoption of Saphyr for de novo sequencing and research applications. Furthermore, we expect 2021 to be an important year for adoption of Saphyr for the clinical cytogenetics market based on a series of positive recent publications."