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After Bionano (NASDAQ:BNGO) reported very strong first-quarter results and showed that its Saphyr DNA analysis tool is progressing on multiple fronts, I remain extremely bullish on BNGO stock.

Source: Connect world /

On May 13, Bionano reported that its Q1 revenue had soared 179% year-over-year to $3.2 million, while its gross margin increased to roughly 33% from 25% during the same period a year earlier.

Moreover, Bionano expects to expand the user base of its Saphyr genome analysis machines by 50% this year to 150.

Bionano CEO Erik Holmlin noted that the company had sold record numbers of flow cells (the amount of DNA that can be analyzed) and analyzed a record number of service samples.

Since flow cells and service samples are the revenue-generating razor blades in the company’s shaver and razor-blade model, those records are extremely important achievements for Bionano.

More specifically, the number of flow cells sold by Bionano jumped 275% YOY and rose 5% versus the previous quarter, reaching 2,603. In its services lab, the company analyzed 227 samples, during Q1, the CEO reported.

Importantly, Bionano acquired a number of very promising customers last quarter.

Both of the key deals it made in Q1 involved the acquisition of new Saphyr systems. One deal was with Toronto’s University Health Network, which has the largest hospital lab in all of Canada. That agreement leaves Bionano well-positioned to grow in Canada.

In the other noteworthy deal, one hospital and one lab that are part of the UK’s national insurance system agreed to launch Saphyr systems.

I think that, in the wake of those transactions, Bionano is very well-positioned to expand not only in the UK, but in all of Europe.

Remarkable Scientific Achievements

In recent weeks and months, a number of important scientific achievements that are likely to increase the demand for Saphyr systems have been documented.

For example, MD Anderson Cancer Center released a study showing that Saphyr reduced the time needed to analyze the tumors of patients with myelodysplastic syndrome from “several weeks” to four days. 

Children’s Hospital proved that Saphyr, unlike older methods of analysis, detected gene fusions in pediatric acute leukemias, Holmlin said, adding that these fusions can be treated with drugs.

Tel Aviv University showed that Saphyr can be used to analyze  “DNA methylation” in the DNA of tumors, the CEO reported.  According to the Journal of Clinical Oncology, ” Alterations in DNA methylation are common in a variety of tumors.”

Meanwhile, in the U.S. and Europe, Bionano’s customers are developing and validating new tests that can be performed with Saphyr. Among these are whole-genome analysis within constitutional genetic disorders, whole-genome analysis for neurodevelopmental disorders and blood cancers.

The company also is in the midst of comparing Saphyr with older tools when it comes to analyzing prenatal and postnatal genetics, hematological malignancies and solid tumors.

If the results of these studies are favorable, the acceptance of Saphyr will become more widespread, Holmlin said. Moreover, I believe that positive data from these studies would likely drive BNGO stock much higher.

Finally, Penn State has used Saphyr to analyze solid tumors and has published protocols on how to do so. As a result, Saphyr can “expand into solid tumors in areas such as breast cancer, colon cancer, melanoma, lung cancer and many other areas of solid tumor oncology, including glioblastoma, et cetera,” Holmlin said.

The Bottom Line on BNGO Stock

Clearly, adoption of Bionano’s Saphyr is rapidly accelerating, while new, vital, potentially life-saving uses for it are being found.

Given these points, along with the relatively low market capitalization of BNGO stock, I remain very bullish on the name.

On the date of publication, Larry Ramer held a long position in Bionano. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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