Bionano Genomics, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022; unaudited. Bionano sells optical genome mapping (OGM) systems and consumables, diagnostic services through Lineagen, and genomics software through BioDiscovery, acquired in October 2021.
Financial performance
| Metric | Q1 2022 | Q1 2021 or comparison |
|---|---|---|
| Revenue | $5.70 million | $3.17 million; up 80% |
| Product revenue | $3.12 million | $2.05 million; up 52% |
| Service and other revenue | $2.58 million | $1.12 million; up 131%, including $1.2 million from BioDiscovery |
| Gross profit and margin | $0.86 million; 15.1% | $1.04 million; 32.9% |
| Operating expenses | $30.80 million | $12.21 million; up 152% |
| Operating loss | $29.94 million | $11.16 million |
| Net loss | $29.95 million; $0.11 per share | $9.95 million; $0.04 per share |
| Cash used in operations | $32.49 million | $13.90 million |
R&D expense rose 293% to $10.53 million, and SG&A rose 113% to $20.28 million. Management attributed increases to higher headcount, product development, BioDiscovery-related amortization and compensation, and stock-based compensation. Stock-based compensation was $5.10 million, versus $0.37 million a year earlier.
Liquidity, debt and cash flows
- At March 31, 2022, cash and cash equivalents were $24.05 million and available-for-sale investments were $192.42 million, totaling $216.47 million. Working capital was $223.7 million, with current assets of $242.36 million and current liabilities of $18.66 million.
- Cash and investments together declined about $34.1 million from December 31, 2021. Operating cash use was partly offset by $31.96 million of investing cash inflow, primarily proceeds from securities sales and maturities; financing cash flow was $7,000.
- The company reported no outstanding term loan; its Innovatus loan was repaid in May 2021. Lease liabilities totaled $11.12 million, including $3.93 million under a related-party finance lease. Total liabilities were $37.03 million.
- Net loss increased the accumulated deficit to $246.07 million. Unrealized investment losses of $1.10 million were recorded in other comprehensive loss.
Changes and operating trends
- Revenue grew 80% year over year. Management cited higher demand for Saphyr OGM solutions and the addition of BioDiscovery revenue. Saphyr’s installed base reached 176, up approximately 64% year over year; flowcells sold increased 24% to 3,225.
- Gross margin fell to 15.1% from 32.9%. Management attributed pressure to unfavorable flowcell yields, scrap and quality-control costs, as well as higher service costs.
- Operating cash use more than doubled year over year, which management primarily linked to workforce expansion. Q1 2021 financing cash inflow included substantial equity offering proceeds; Q1 2022 had no comparable fundraising.
- Q1 2021 results included a $1.78 million gain on forgiveness of the PPP loan. The prior-year quarter also incurred higher interest expense before the Innovatus loan was repaid.
Outlook, risks and unusual items
- No specific revenue or earnings guidance was provided. Management expects continued losses and higher R&D and SG&A expenses through the remainder of 2022, including continued investment in product development, manufacturing workflows, sales and customer support.
- Management believes cash, cash equivalents and available-for-sale securities are sufficient to fund planned operations, obligations and capital investment for at least 12 months. It also says future funding may be needed; additional equity financing could dilute shareholders, and unavailable funding could require spending reductions.
- COVID-19-related supply constraints increased costs and contributed to unfavorable flowcell yields. Management warned that persistent yield issues could reduce future gross margins. Restrictions could also impede manufacturing, customer installations, service and sales.
- A $9.15 million BioDiscovery contingent consideration liability reflects a $10 million cash milestone payment, which management assessed as highly likely to be achieved using a 95% probability factor. The milestone is contingent on achievement within 18 months of the acquisition.
- Other risks include reliance on single contract manufacturers for OGM instruments and chip consumables, early-stage commercialization and market adoption, research-budget sensitivity, and potential regulatory requirements if RUO products are used or marketed for clinical diagnosis. The company reported no material litigation and stated disclosure controls were effective; integration of BioDiscovery’s internal controls was ongoing.
Important facts for investors to verify
- Whether flowcell yields improve and whether gross margins recover from the Q1 decline.
- Whether cash burn remains within management’s 12-month liquidity assessment, particularly as expenses and capital investment rise.
- Progress against the BioDiscovery commercial milestone and the resulting cash payment obligation.
- Whether installed-base growth and consumables utilization translate into sustained, profitable revenue growth.
- How supply constraints, COVID-related disruption, regulatory developments and potential future financing affect execution and shareholder dilution.