Bionano (BNGO) is a name that few knew about a year ago. However, the life sciences company’s profile – and share price – has increased significantly in recent months, as interest has grown around its genome imaging system, Saphyr, and how it can shape the world of cytogenetics.
Following Bionano’s presentation at Oppenheimer’s Annual Healthcare Conference, firm analyst Kevin DeGeeter talked with management to learn what’s in-store for the company.
The discussion turned to the subject of reimbursements.
“Given complex payor infrastructure in the US,” DeGeeter said, “Management has identified three pathways to reimbursement: 1) applying for Z-Codes for which the mechanism applies (region-specific); 2) applying for Proprietary Lab Analyses codes (PLAs), which take the place of Z-Codes appended to CPT (current procedural terminology) codes; and/or 3) labs with existing payor contracts to provide evidence of technical validation.”
Notable progress on the development of LDTs (laboratory developed tests) and reimbursement is expected over the next year to year and a half, according to management.
Clinical utility has already been established for the chosen indications and particular tests that Bionano hopes to replace with Saphyr-based LDTs. In the majority of cases, technical validation is “the limiting step,” and according to DeGeeter, remains the “key to reimbursement.”
The talks also centered on how Bionano plans to expand its TAM (total addressable market).
Validation studies of hematological malignancies and post-natal constitutional disorders have progressed nicely, and management anticipates having data from “no-call” reflex testing in NIPS (noninvasive prenatal screening) later this year and next year for solid tumors.
Lastly, the company said that via a combination of better hardware capabilities and software updates that lower the amount of consumables required for each run, Bionano can achieve the goal of a $100 per genome cost in the next-gen Saphyr.
“The goal is to be able to process 5,000 genomes annually at a minimum throughput of 100x,” DeGeeter noted.
All in all, DeGeeter reiterates an Outperform (i.e. Buy) rating on BNGO shares along with a $15 price target. Investors are expected to pocket a 69% gain if the analyst’s thesis materializes. (To watch DeGeeter’s track record, click here)
Two other analysts have been tracking Bionano’s progress recently and both recommend to Buy. Accordingly, the stock boasts a Strong Buy consensus rating, backed by a $14.33 average price target. The implication for investors? Potential gains of 62% on the one-year time horizon. (See BNGO stock analysis on TipRanks)
To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.