Bionano Genomics, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022. Bionano provides optical genome mapping (OGM) systems and related products and services, diagnostic testing through Lineagen, and genomics software through BioDiscovery.
Financial performance
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Revenue | $6.67 million | $3.86 million | $12.37 million | $7.02 million |
| Gross profit (margin) | $1.47 million (22%) | $1.44 million (37%) | $2.33 million (19%) | $2.48 million (35%) |
| Operating expenses | $33.55 million | $17.92 million | $64.36 million | $30.12 million |
| Operating loss | $(32.08) million | $(16.48) million | $(62.02) million | $(27.64) million |
| Net loss | $(32.16) million | $(18.79) million | $(62.11) million | $(28.73) million |
| Net loss per share, diluted | $(0.11) | $(0.07) | $(0.22) | $(0.11) |
- Revenue rose 73% in Q2 and 76% for the first half. Product revenue increased 57% and 55%, respectively; service and other revenue increased 103% and 115%.
- BioDiscovery, acquired in October 2021, contributed $1.0 million of Q2 and $2.2 million of first-half revenue.
- Gross margin fell year over year, primarily due to unfavorable flowcell production yields, scrap and quality-control costs. Management reported Q2 margin improved from 15% in Q1 2022 as chip yields improved.
- R&D and selling, general and administrative expenses rose substantially, reflecting higher headcount, product development, acquisition-related amortization and stock-based compensation. First-half stock-based compensation was approximately $10.9 million, versus $2.1 million a year earlier.
Cash, liquidity and obligations
- At June 30, 2022, cash and cash equivalents were $27.2 million and available-for-sale investments were $160.2 million; working capital was $188.4 million. Cash plus investments totaled approximately $187.3 million.
- Operating cash use was $60.8 million in the first half, compared with $26.3 million in the prior-year period. Investing activities provided $63.2 million, mainly reflecting net sales and maturities of investment securities; financing activities provided $0.2 million.
- Total liabilities were $36.8 million. The company reported no term-loan debt outstanding; the Innovatus term loan was repaid in 2021. Lease liabilities totaled approximately $10.8 million.
- Management said available cash, cash equivalents and investments should fund planned operations, obligations and capital investments for at least the next 12 months, while noting ongoing expected losses and possible future financing needs.
Business developments, outlook and risks
- The Saphyr installed base reached 196 instruments, up approximately 62% from June 2021. Q2 flowcells sold increased 24% year over year to 3,394, and the service lab analyzed 373 samples versus 190.
- Management expects revenue to increase as OGM awareness and published supporting data grow. It also expects R&D and SG&A expenses to increase during the remainder of 2022; the filing provides no specific revenue, earnings or margin guidance.
- Management attributed supply-chain challenges and higher component and manufacturing costs to COVID-19-related disruption and the Russia-Ukraine conflict and related sanctions. It expects those elevated costs to persist; supply constraints and flowcell yields could limit production or pressure margins.
- A $9.2 million BioDiscovery acquisition milestone liability was classified as current at June 30. Management estimated a 95% probability of achieving the commercial milestone; the $10.0 million payment is contingent on achievement within 18 months of acquisition.
- Available-for-sale securities had $1.4 million of unrealized losses in the first half, recorded in other comprehensive loss. The company said it did not consider the losses credit-related and did not recognize an impairment.
- Principal risks include ongoing losses and cash burn, the need for potential future capital, early-stage commercial adoption, dependence on limited or single-source manufacturers, manufacturing yields, regulatory restrictions on research-use-only products, competition, and macroeconomic and geopolitical disruption. The company reported no material litigation exposure and said disclosure controls were effective; BioDiscovery control integration was ongoing.
Important facts for investors to verify
- Whether flowcell yields and gross margins improve, and whether supply constraints ease.
- Whether installed-base growth translates into recurring consumables demand and sustainable revenue growth.
- Actual cash burn against management’s stated minimum 12-month liquidity expectation, and whether additional financing is needed.
- Whether the BioDiscovery commercial milestone is achieved and the related cash payment becomes due.
- The scale and continuing impact of stock-based compensation, equity awards and potential shareholder dilution.