Bionano Genomics, Inc. (NASDAQ:BNGO) Q3 2023 Earnings Call Transcript

Erik Holmlin: Thanks, Sung Ji. So, it’s a little bit early to have concrete feedback from users. So, the installations have just begun, and given that it’s a brand new instrument, it takes some time for us to even qualify it on site. So that process is ongoing. And what I can tell you about though is that labs are really focused on bringing on that product in that they have identified a variety of use cases that indicate to them that they need the higher throughput that Stratys offers. And so, excitement is high, and let’s hope that Stratys delivers. And we, of course, believe very confidently that it will, and we’re excited to have it out in the field. With regard to a backlog into 2024, I only want to say sort of anecdotally that we’ve had a tremendous response to Stratys that in I think many respects, it sees our expectations towards the early access program.

So, quite a number of labs have raised their hand and asked to be a part of that. In the event that those requests exceeded the sort of number of early access systems that we have available, which is 10, we believe that they would still be interested in adopting the full commercial model of Stratys. And what we’re doing now is managing that transition between one product, the Saphyr system, into an environment where we have two products, Saphyr and Stratys. And this is one of the more tricky paths that a leadership team, especially a commercial team in this industry has to traverse. And so, we’re making sure our principal focus is that customers are excited about adopting optical genome mapping, and they get the system that’s best for them, whether that’s Saphyr or Stratys.

And so far, and based on the guidance that we’ve provided, we think that we are navigating that transition smoothly.

Sung Ji Nam: Great, that’s super helpful. And then just on the VIA software launch, just kind of curious if you expect all the customers currently doing hematological — research on hematological malignancies to convert over to that, just kind of curious kind of what you expect from a penetration standpoint.

Erik Holmlin: Yeah. So, I think it’s reasonable to expect that the vast majority, I mean substantially all, there’s going to be that one lab that doesn’t want to do it, but substantially all of the labs will convert. The timing of the conversion is a little bit dependent on their progress because a new software would need to be revalidated in some cases depending on how they’re using the platform. And so, they will pick the right point in time and perhaps align that revalidation with bringing on other menu items or other applications that they would be running. But for us, the expectation is that everybody adopts. And so, yeah, we believe that that will be the case.

Sung Ji Nam: Got it. And then lastly from me, on China, great to see a lot of your OEM customers gaining traction there. Just kind of curious, given the environment, the macro environment and kind of a lot of the larger cap, those companies seeing increasing headwind in China. Just kind of curious, I would love to hear your perspective just from Bionano standpoint, kind of what your expectations are kind of heading into next year in China.

Erik Holmlin: Yes, it’s a good question and we’re watching with great interest the reports of other companies in the space. What I can tell you is that we reiterated guidance — full-year guidance, and that includes sales to China. We’ve been progressing well. We’re not seeing pressure that would cause us to come off of those numbers, but it’s clear that spending on research has seen some headwinds in China. And one of our rationalizations for us thinking that we’re going to continue to progress there is that the applications that optical genome mapping get used for there are very, very close to healthcare applications, clinical research, as opposed to academic and basic research. And so that’s why we were comfortable reiterating guidance. Of course, there’s a global aspect to the whole revenue mix. But we’re mindful of the sort of headwinds that others are facing and we’re going through China carefully this quarter.