Yahoo Finance Bionano Genomics, Inc. (NASDAQ:BNGO) Q1 2024 Earnings Call Transcript
Bionano Genomics, Inc. (NASDAQ:BNGO) Q1 2024 Earnings Call Transcript May 8, 2024
Bionano Genomics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day, and welcome to the Bionano First Quarter 2024 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to David Holmes from Investor Relations. Please go ahead.
David Holmes: Thank you, operator, and good afternoon, everyone. Welcome to the Bionano first quarter 2024 financial results conference call. Leading the call today is Dr. Erik Holmlin, CEO of Bionano. He is joined by Gülsen Kama, CFO of Bionano. After market closed today, Bionano issued a press release announcing its financial results for the first quarter 2024. A copy of the release can be found on the Investor Relations page of the company's website. Certain statements made during the conference call may be forward-looking statements, including statements about Bionano's revenue outlook, profitability, cash runway, cost savings initiatives and commercialization and product plans. Such statements are based on current expectations and there can be no assurances that the results contemplated in these statements will be realized.
Actual results may differ materially from such statements due to a number of factors and risks, some of which are identified in Bionano's press release and Bionano's reports filed with the SEC. These forward-looking statements are based on information available to Bionano today, May 8, 2024, and the company assumes no obligation to update statements as circumstances change. In addition, to supplement Bionano's financial results reported in accordance with the U.S. Generally Accepted Accounting Principles, or GAAP, the company reports certain non-GAAP financial measures. A description of these non-GAAP financial measures as well as the reconciliation to the nearest GAAP financial measures are included at the end of the company's earnings release issued earlier today, which has been posted on the Investor Relations page of the company's website.
These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, should be read in conjunction with company's consolidated financial statements prepared in accordance with GAAP, have no standardized meaning prescribed by GAAP, and are not prepared under any comprehensive set of accounting rules or principles. An audio recording and webcast replay for today's conference call will also be available online on the company's Investor Relations page. With that, I will turn the call over to Erik.
Erik Holmlin: Thank you, David, and good afternoon, everyone. We accomplished a lot in Q1, and I look forward to discussing the progress in detail. I want to start off today's call, however, by sharing a remarkable story of medical advancement in which optical genome mapping played a significant role. I'm referring to the first successful kidney transplant from a genetically modified pig into a human patient, which was conducted at Massachusetts General Hospital on March 16th. eGenesis, a Bionano customer and OGM user, provided the kidney from a pig donor that was genetically edited using CRISPR-Cas9 technology to remove harmful pig genes and add certain human genes to improve its compatibility with humans. They also used gene editing to inactivate porcine endogenous retroviruses in the pig donor to eliminate any risk of infection in humans.
The process of creating the cells that eventually grew into the pig donor followed multiple steps of genetic modification to eventually arrive at the cells that were used to grow the donor. Throughout the process, optical genome mapping was used as part of a regimen to confirm that desired gene edits were in place and that off-target effects were not detected or those that were detected were not deleterious. Optical genome mapping was used as an alternative to G-banding karyotype analysis because of its ability to detect genome variation that other methods commonly miss. We are seeing growth in our biopharma customer group and we believe it's because these customers see tremendous value in OGM's utility for the development of safe and innovative therapies.
Our focus in 2024 remains on strengthening the company's long-term growth profile, as part of our on-going evolution, we are continuing to execute cost savings and strategic productivity initiatives that we began in May of 2023 and that are intended to allow us to be more agile, to increase efficiency across the company and to prioritize investing in opportunities where we see the greatest potential to drive adoption and utilization of optical genome mapping across multiple end markets. Gülsen is going to open our call today by walking you through our financial results for the quarter and explaining how some of the steps in our streamlined operational plan have begun to positively impact our financial performance and cash runway. Gülsen?
Gülsen Kama: Thanks, Erik. With that, let me share our results for the first quarter of 2024 with you. Revenue was $8.8 million, representing an 18% year-over-year increase compared to the same period of 2023, excluding $1.4 million in revenues from discontinued clinical services in the first quarter of 2024. Core revenues were $7.3 million, which represents a 21% year-over-year growth over the $6.1 million of core revenues for the same period in 2023. The OGM installed base grew to 347 systems during Q1, which represents an increase of 21 systems during the quarter and 34% growth over the installed base of 259 at the end of Q1 2023. We sold 8,249 flowcells in Q1 2024, which represents a 58% year-over-year increase over the 5,226 flowcells sold in the same period last year.
GAAP gross margin for the first quarter was 32% compared to 28% during Q1, 2023 and non-GAAP gross margin was 34% compared to 30% in the same quarter last year. First quarter 2024 non-GAAP gross margin excludes $128,000 in stock-based compensation and $11,000 of restructuring expense. First quarter 2024, GAAP operating expense was $33.9 million and non-GAAP operating expense was $24.7 million. Non-GAAP operating expense in the quarter, excludes restructuring costs, stock-based compensation and other adjustments as detailed in the reconciliation table accompanying the press release posted on the Investor Relations page of our website. In the same period in 2023, GAAP operating expense was $39.9 million and non-GAAP operating expense was $33.6 million.
Q1 2023 GAAP to non-GAAP reconciliation can be found in the same table. Our cash, cash equivalents, and available for sale securities as of March 31st, 2024 were $53.2 million compared to cash, cash equivalents, and available for sale securities of $102.3 million as of December 31st, 2023. As of March 31st, 2024, $24.8 million was subject to certain restrictions compared to $35.5 million as of December 31st, 2023. We raised $15.1 million in net proceeds in the first quarter of 2024 through our ATM facility. The change in total cash balance from December 31st, 2023 to March 31st, 2024 consists of $19 million cash burn from operating activities excluding interest and debt retirement fees, $9 million in interest and debt retirement fees, $37 million in repaid principal, offset by $15 million in net ATM proceeds.
Now I want to discuss the steps we have taken to continue to streamline operations, reduce expenses, and to extend our cash runway. The non-GAAP operating expenses in the quarter are consistent with our planned reductions announced in October 2023. In March, we extended those initiatives to include further reduction in force and reductions to discretionary spending unrelated to headcount. Overall, since May 2023 through Q2 of 2024, we plan to have reduced headcount by over 200 people. Compared to the annualized non-GAAP operating expense for the first quarter of 2023, these initiatives are expected to reduce annualized non-GAAP operating expenses by about $65 million to $75 million by Q1 of 2025. We also announced a registered direct offering priced at the market under NASDAQ rules in April 2024 with gross proceeds to the company of approximately $10 million before deducting the placement agent fees and other offering expenses payable by the company.
We believe these activities will allow us to remain committed to our customers and partners and to be able to continue expanding the opportunity and availability of OGM. Back to you, Erik.
Erik Holmlin: Thanks, Gülsen. Our strategy moving forward is straightforward. We need to continue to accelerate revenue growth, operate efficiently, and raise capital that will allow us to extend our cash runway on a path to profitability. Key updates to our product portfolio which we believe will drive this growth include the Stratys system which is now fully commercially available and early feedback by adopters has been positive. We're shipping commercial production units now and we have the capacity to meet the expected demand. We expect to announce later this week a series of major advancements to our entire suite of comprehensive analysis software tools for cancer including version 7.1 of our VIA software which has AI-enhanced capabilities for cancer research.
In the second half of the year we plan to release improvements to the data analysis processing time on the Stratys Compute which is a high-performance workstation developed in collaboration with NVIDIA. We are addressing the DNA isolation bottleneck with isotachophoresis technology on the ionic system which was acquired in our acquisition of Purigen Biosystems. We placed a pre-commercial system in the field for optical genome mapping on the ionic system using a newly developed ITP cartridge for the isolation of ultra-high molecular weight DNA in the fourth quarter of 2023 and we have recently added two more customer sites. We are on track for a full commercial release of the product in the third quarter of 2024. Now the objective in assembling this combination of solutions high throughput data collection with Stratys, streamlined analysis and reporting with VIA and automated DNA isolation with ionic is to enable optical genome mapping at scale for routine use.
We're pleased to announce and congratulate Dr. Alexander Hoischen and his team at Radboud University Medical Center in the Netherlands on their award by the Research and Innovation Board at Radboud UMC of a grant of €900,000 for the translation of optical genome mapping to routine use in an academic medical center where they will focus on leukemias solid tumors and constitutional genetic diseases. This work will leverage our high throughput end-to-end workflow. On progress in market development, the first quarter in 2024 saw the highest number of optical genome mapping publications in any quarter in our history, 97 total publications which is up 83% compared to the number of publications in the first quarter of 2023. Growth in publications has an influence on how all stakeholders view optical genome mapping from prospective customers to third-party payers and medical societies so this growth is really outstanding.
Our clinical studies are now streamlined based on our cost savings initiatives and they are focused primarily on advancing the heme [ph] trial while publishing more pre and post-natal study data from the constitutional trials. Finally, I'd like to comment briefly on an application that has been submitted to the American Medical Association for a Category 1 CPT code covering optical genome mapping. We understand that the application may be reviewed at the CPT editorial panel meeting which starts tomorrow May 9th at 9 a.m. Eastern Time. This application is the third one that's been submitted for optical genome mapping, but in the previous two cycles it was withdrawn prior to the editorial panel meeting. We view the fact that it will go now in front of that panel as a sign of progress and we are eagerly awaiting the outcome which will be published publicly on or before June 6th.
Although we do understand that the meeting taking place will be public and it's possible that anyone who registers may be able to attend. A link to register for this meeting is listed on the AMA Association website. Looking ahead, we remain on track to meet our goal of installing 381 to 401 OGM systems by the end of 2024 which reflects some anticipated software to Stratys upgrades. We expect Q2 revenue guidance to be in the range of $7.8 to $8.2 million and we are maintaining our full year 2024 revenue guidance of $37 to $41 million. Keep in mind that both of these ranges take into account the financial impact of discontinuing certain clinical services products as part of our cost reduction initiatives. In closing, I'm excited about the progress we have made in 2024.
We acknowledge challenges we are facing due to the current state of capital markets and we need to continue the great momentum we have built. I am confident in optical genome mapping's ability to transform the field of cytogenetics and with that operator, please go ahead and open the line for questions.
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