NEW YORK – Bionano Genomics reported a 33 percent year-over-year decrease in third quarter revenues after the close of the market on Thursday, driven by a change in revenue mix between instrument sales and the firm's reagent rental program.
"We saw continued adoption by cytogenomic labs around the world and for COVID host genome research, publication of several major studies on cancer genomics, genetic diseases, and reference genome assembly, and made significant improvements to the Saphyr system," Bionano Genomics CEO Erik Holmlin said in a statement.
For the quarter ended Sept. 30, the company reported $2.2 million in revenues, down from $3.3 million in Q3 of 2019 and narrowly beating the average Wall Street estimate of $2.1 million. The top-line results included $1.6 million in product revenues and $616,000 in service and other revenues compared to $3.2 million in product revenues and $151,000 in service and other revenues a year ago.
During a conference call to discuss the firm's financial results, Holmlin mentioned that Bionano shipped 11 Saphyr systems in the quarter, including three bought by customers and eight shipped under reagent rental contracts. In total, Bionano now has 96 Saphyr instruments installed at customer sites and 21 additional ones waiting to be installed.
The company also sold a record 1,785 flow cells during the quarter, a 34 percent increase over Q3 of 2019. Holmlin said the firm is using flow cells as a metric to measure the usage and adoption of its platform, explaining that some of its nanochannel chips have two flow cells and others three.
Sales of a recently launched DNA isolation kit have beaten the company's expectations, he said.
Holmlin also mentioned that an estimated 80 percent of installed Saphyr instruments are used as part of research and 20 percent for clinical applications, but about half of the flow cells are going to clinical labs and half to research labs.
The company's optical mapping service business has taken off this year, he said, with 63 projects and 577 samples run so far. The company expects that these projects will result in additional publications and presentations, and ultimately more adoptions of its platform.
During the quarter, Bionano acquired diagnostics services provider Lineagen for $9.6 million, which added $445,000 to Q3 revenues and which Holmlin said can provide a potential path to reimbursement for laboratory-developed tests that run on the Saphyr instrument. In addition, Bionano appointed a new CFO and its first chief medical officer in Q3.
Holmlin pointed out a multicenter evaluation of the clinical utility of Bionano's optical genome mapping for assessing genomic aberrations in acute myeloid leukemia, results of which were published in a MedRxiv preprint this week. That study, which looked at 100 AML cases, concluded that optical mapping should be considered as a first-line test for detecting clinically relevant structural variants.
When it comes to reimbursement for lab-developed tests on its platform, Holmlin said the firm is banking on Lineagen. "We intend to leverage Lineagen's expertise and their existing portfolio of third-party payor contracts and certified coders to work out this path for reimbursement of LDTs based on Saphyr," he said. "We intend to use a combination of billing existing CPT codes where appropriate, obtaining PLA codes for the service and obtaining coverage from MolDx for Z codes."
Bionano then plans to share its reimbursement strategies with other clinical labs using its platform, he added. "Our goal with Lineagen is to support the commercialization of Saphyr by overcoming key barriers such as reimbursement and making those solutions available to the market," he said, adding that "our intent with Lineagen is not to compete with other service providers but to make them successful in adopting Saphyr."
Bionano's net loss for the quarter amounted to $10.8 million compared to a net loss of $6.4 million in Q3 of 2019.
The firm's R&D expenses increased slightly to $2.3 million from $2.2 million last year, while SG&A expenses almost doubled to $8.7 million from $4.4 million a year ago.
As of Sept. 30, Bionano had $18.9 million in cash and cash equivalents. This is sufficient to carry the company into the first quarter of 2021, according to CFO Chris Stewart, who added that the firm believes it has "sufficient options available to raise cash in the future."
In morning trading on the Nasdaq, Bionano's stock was down 10 percent at $.51 per share.