BNGO - The Latest Studies by Bionano Genomics Are Promising But It's Not a Buy Yet
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Bionano Genomics (NASDAQ:BNGO) is a life sciences company that provides genome analysis software solutions. It recently announced two important studies about the progress of its genome analysis space. This bodes well for BNGO stock, but that doesn’t make it a buy just yet.
Studies and news on its products other than earnings are key drivers of Bionano Genomics’ shares. Is it time to get more optimistic about this penny stock, down 30% in 2022? Based on these new studies the answer is yes, but based on its financials, it’s not yet time to buy.
On March 18, the company “announced the publication of comprehensive study results validating OGM for routine production use for genome-wide structural variant (SV) detection in hematological neoplasms.”
The results were very encouraging, as the key findings showed an optical genome mapping (OGM) sensitivity of 98.7%, an OGM specificity of 100%, an OGM accuracy of 99.2% and a first-pass success rate of 100%.
As Erik Holmlin, PhD, president and CEO of Bionano commented, “This study shows the possibilities of OGM and why labs around the world are adopting it.”
Additionally, on April 6, the company announced “a new study using OGM in combination with multiple other cytogenetic methods and a new single-cell analysis method as a comprehensive molecular strategy to characterize the genomic variation in B-cell acute lymphoblastic leukemia (B-ALL).”
This study showed optical genome mapping “can provide information on SVs occurring across a window of sizes that could help bridge sequencing with traditional cytogenetics.” This improves the odds of Bionano Genomics having a quicker penetration into the cytogenetics market soon. It also means it will likely see higher adoption of the Saphyr system, which is positive news for the company’s commercialization plans.
Is BNGO stock a buy based on these studies? Maybe, but the annual report for fiscal 2021 is not supportive of this.
In 2021, total revenue increased 111.47% to nearly $18 million from $8.5 million in fiscal 2020. However, net loss widened to $72.4 million versus a net loss of $41.1 million in the prior year.
Bionano Genomics has been unprofitable since 2017 and is having a cash burn problem. In 2021, free cash flow reported was a loss of $73.4 million compared to a loss of $38.3 million in 2020.
Keep an eye on BNGO stock and the progress of the company’s studies, but it’s not a buy yet with widening losses and a persistent cash burn problem.
On the date of publication, Stavros Georgiadis, CFA did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Stavros Georgiadis is a CFA charter holder, an Equity Research Analyst, and an Economist. He focuses on U.S. stocks and has his own stock market blog at thestockmarketontheinternet.com. He has written in the past various articles for other publications and can be reached on Twitter and on LinkedIn.
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