Bionano: BioDiscovery acquisition further strengthens Bull case, says Oppenheimer

Bionanos (BNGO) profile has grown significantly over the past year, primarily due to the disruptive potential of its genome mapping platform Saphyr.

On Tuesday, the company announced that it is further expanding its genome analysis capabilities with the acquisition of BioDiscovery, a software company with industry-leading analysis tools. These include NxClinical, a variant analysis software solution. The purchase will cost up to $100 million, consisting of a mix of cash and equity, and should be completed by October 22.

Bionano will benefit from the computational expertise of BioDiscovery founder and CEO, Soheil Shams, who, along with 13 bioinformatics employees, will join Bionano as Chief Informatics Officer (CIO). The life sciences company’s latest move further consolidates its position as a leader in the field, says Oppenheimer’s Kevin DeGeeter.

“We view Bionano’s strategic acquisition of BioDiscovery as a significant buy-vs.-build transaction that: 1) rapidly expands BNGO’s IT capabilities, including 13 new IT staff; 2) provides opportunities for cross-selling BioDiscovery’s NxClinical product with Saphyr; and 3) provides a platform for integrating Optical Genome Mapping (OGM) with other data types.”

The integration of the NxClinical software solution should simplify the data analysis workflow, accelerating OGM adoption and the analyst expects it to “generate synergies” as early as 1Q22. However, DeGeeter believes that with the introduction of the next-generation Saphyr platform in 2023 and the “lower cost and potential to extend OGM into clinical testing beyond cytogenetics”, the real “full potential” of NxClinical will be unlocked.

On another topic, looking ahead to Bionano’s upcoming Q3 results, DeGeeter expects $4 million in revenue based on 14 “new placements” and a total of 135 Saphyr systems. This roughly matches the Street’s estimate of $4.2 million. In addition, the 5-star analyst considers the guidance for 150 installed Saphyr systems “feasible” by the end of the year.

DeGeeter is a full-fledged BNGO bull; its 12-month price target stands at $14, indicating a whopping 155% gain. No need to add, the analyst maintains an Outperform (ie Buy) rating. (To view DeGeeter’s track record, click here)

With two other recent buy recommendations, the analyst consensus rates BNGO stock as a strong buy. While the average price target doesn’t extend all the way to DeGeeter’s high levels, at $11, the figure is still expected to generate a 100% return over a one-year period. (Check out the BNGO stock forecast on TipRanks)

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Disclaimer: The opinions expressed in this article are those of the featured analyst only. The content is for informational purposes only. It is very important to do your own analysis before making any investment.