Bionano Genomics, Inc. — FY2020 Form 10-K
Reporting period: Fiscal year ended December 31, 2020. This is an annual report, not a standalone fourth-quarter filing. Bionano sells Saphyr optical genome mapping systems, consumables and related services, and acquired diagnostic-testing provider Lineagen in August 2020.
Financial performance and liquidity
| Metric | FY2020 | FY2019 | Change |
|---|---|---|---|
| Total revenue | $8.5 million | $10.1 million | Down 16% |
| Product revenue | $6.2 million | $9.5 million | Down 34% |
| Service and other revenue | $2.3 million | $0.7 million | Up 247%; includes $1.5 million from Lineagen after acquisition |
| Gross profit / gross margin | $2.8 million / 32.6% | $3.4 million / 33.2% | Margin lower by about 0.6 percentage points |
| Operating expenses | $41.3 million | $29.2 million | Up 41% |
| Net loss | $41.1 million | $29.8 million | Loss increased 38% |
| Cash used in operations | $38.3 million | $29.5 million | Use increased $8.8 million |
| Cash and cash equivalents at year-end | $38.4 million | $17.3 million | Up $21.1 million |
At December 31, 2020, working capital was $37.8 million. Debt principal totaled $17.8 million, including $16.0 million of Innovatus term loans and a $1.8 million PPP loan; debt carrying value was $16.3 million. No revolver borrowings were outstanding, and $5.0 million was available under the revolving facility. The PPP loan and accrued interest were forgiven in March 2021.
Material changes versus FY2019
- Instrument revenue fell 54% to $3.1 million, while consumables revenue rose 16% to $3.1 million. Management attributed the overall revenue decline largely to COVID-19 disruptions and customer laboratory restrictions.
- Cost of revenue declined 15% to $5.7 million, but operating expenses rose $12.1 million. Selling, general and administrative costs increased 54% to $31.1 million, reflecting commercial and back-office hiring, Lineagen-related costs, higher professional fees and $1.8 million in bad-debt expense.
- R&D expense rose 13% to $10.3 million. The installed base of Saphyr systems reached 97, up 24 from year-end 2019; consumable units sold increased 59%.
- Lineagen added diagnostic testing operations and $1.5 million of post-acquisition revenue. The acquisition consideration included approximately 6.2 million Bionano shares, $1.9 million in cash and assumed liabilities.
- Financing increased year-end cash, but substantially expanded the share count: common shares outstanding rose from 34.3 million at year-end 2019 to 190.0 million at year-end 2020. Additional equity offerings and ATM sales in January 2021 generated substantial proceeds.
Outlook, risks and unusual items
- Management expects continued operating losses and negative operating cash flows while investing in commercialization, R&D and personnel. It stated that available cash, including subsequent financing, should fund operations and obligations for at least 12 months. The filing provides no revenue, earnings or margin guidance.
- In January 2021, the company completed two public offerings for approximately $331.8 million gross proceeds; January ATM sales added approximately $16.9 million. Together with late-2020 ATM proceeds, the filing reports approximately $370.8 million in gross proceeds from October 2020 through January 2021, before offering costs.
- COVID-19 reduced customer activity and revenue; future effects on demand, supply chains and operations remained uncertain. Management reported cost-control measures during 2020, including temporary salary and work-hour reductions.
- Innovatus debt is secured by substantially all company assets, including intellectual property, and carries restrictive covenants. Bionano obtained covenant waivers after prior breaches and was in compliance at December 31, 2020; future noncompliance could trigger accelerated repayment or enforcement against collateral.
- Saphyr is marketed for research use only. Clinical adoption depends on regulatory pathways, laboratory-developed-test rules, and coverage and reimbursement. Single-source or limited suppliers and contract manufacturers pose continuity risks.
- The company disclosed a material weakness in internal control over financial reporting due to insufficient financial-reporting resources and inadequate segregation of duties. Controls were not effective at year-end; remediation was underway. The auditor issued an unqualified opinion on the financial statements but did not audit internal-control effectiveness.
- The filing reports no material pending legal proceedings. It also identifies dilution, stock-price volatility, competition, and the ability to achieve market acceptance and profitability as significant risks.
Most important facts for investors to verify
- Whether Saphyr placements translate into sustained utilization and recurring consumables growth, given the decline in instrument revenue.
- Whether Lineagen can grow diagnostic revenue and whether its integration and acquisition economics meet management’s expectations.
- Cash burn, remaining liquidity after the January 2021 offerings, debt service and ongoing compliance with Innovatus covenants.
- Progress in remediating the material weakness and establishing effective financial-reporting controls.
- Evidence supporting clinical adoption, regulatory status and payer reimbursement for tests using OGM or Lineagen services.
- Potential dilution from equity issuance, warrants and employee awards; compare subsequent share counts and financing costs with the year-end figures.