Bionano Genomics, Inc.

Good day and welcome to the BioNano Genomics first quarter 2021 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Amy Conrad from Investor Relations. Please go ahead.

Thank you, Lateef. And good afternoon, everyone. Welcome to the BioNano Genomics first quarter 2021 financial results conference call. Leading the call today is Dr. Eric Holman, CEO of BioNano. He is joined by Chris Stewart, CFO of Bionano, and Dr. Alka Chalbi, CMO of Bionano. After market closed today, Bionano issued a press release announcing its financial results for the first quarter of 2021. A copy of the release can be found on the investor relations page of the company's website. Before I jump into the forward-looking statements, we want to remind you that our annual meeting is coming up on June 10th, and if you haven't already done so, please vote your shares as soon as you can. I would like to remind everyone that certain statements made during this conference call may be forward-looking, including statements about our strategic and commercialization plans, sales pipeline, anticipated benefits or improvements to the SAFIRE system, and the advantages of the SAFIRE system over current technologies, our expectations regarding timing and content of study results, and anticipated benefits of these studies in driving adoption of the software system. Such forward-looking statements are based upon current expectations and there can be no assurances that the results contemplated in these statements will be realized. Actual results may differ materially from such statements due to a number of factors and risks, some of which are identified in our press release and our reports filed with the SEC. These forward-looking statements are based on information available to BioNano today, and the company assumes no obligation to update statements as circumstances change. An audio recording and webcast replay for today's conference call will also be available online in the investor section of the company's website. With that, I will turn the call over to Eric.

Thank you, Amy, and good afternoon, everyone. Let me begin by saying that 2021 is off to a solid start for BioNano, and we're thrilled with our progress during this first quarter. We ended 2020 with a strong fourth quarter, and that momentum has really continued into this first quarter of 2021, where we had record numbers of flow cells sold, services samples analyzed, and SAFIRE systems installed. There are now more SAFIRE systems in service than ever before, and that's really important because it means our customers are able to analyze more and more genomes. With the improvements in throughput and cost of operation that we've introduced, They're running larger and larger studies, which in turn means there'll be more data in the field. And those data really tell the story of the value of optical genome mapping. And what we're seeing is that the quality and number of presentations and publications featuring this optical genome mapping data is continuing to increase. And I can't really think of a better illustration of that progress than our Next Generation Cytogenomics Symposium that some of you may have followed. It was originated and organized by Dr. Alka Chabe, our CMO. And it featured 32 customers presenting breakthroughs that were enabled by optical genome mapping across basic research, clinical research, including applications in COVID. during a total of 33 presentations over the course of five days in January of this year. And that message of scientific success has resonated beyond our expectations and really elevated the profile of the company throughout the market. And we expect this momentum to continue. And we believe that it will be connected to our ongoing commercial success over the course of this year, but into the future. Looking at the numbers for the first quarter, our commercial indicators grew year over year. Since the start of 2020, our focus has been on pursuing a go-to-market model that is intended to remove barriers that have historically made it difficult for customers to get BioNano data. We now offer them sample analysis services, a reagent rental option where they can commit to a certain volume of consumables, and we will provide them with a SAFIRE system that they rent. And we have attractive options for capital acquisition, allowing customers to buy a SAFIRE system. And we believe that this commercial strategy is working and that its success is reflected in our performance during this first quarter. We shipped 11 Sapphire systems into the market. And when you compare that to the five systems that we shipped in the same quarter in 2020, you can see that the business is definitely improving. Completed a number of installations over the course of the quarter, bringing the total number of SAFIRE systems installed in the field to 107. We sold 2,603 nano-channel array flow cells. Now remember, a flow cell is the measure of the number of human genome analysis capacity that's acquired in consumables on a quarterly basis. And this is the highest number that we've sold in a quarter ever. It represents 275% growth over the number of flow cells that we sold in the first quarter of 2020. And we also grew by 5% the number sold over the fourth quarter of 2020. So more flow cells that are purchased correlates with more samples analyzed more bio-nano data in the field, which helps to propel us forward. This is an incredible result. We also analyzed 227 samples in our SAFIRE services lab, which is a record number for us in any first quarter ever. We believe the availability of commercial services is an effective way to put bio-nano data in the hands of customers so that they can evaluate optical genome mapping, and that this approach will result in more publications, which are critical to driving the BioNano story forward and more and more Sapphire adoption. We also expanded into new geographic markets, including South Africa, Greece, Russia, South Korea, and important clinical research sites in the United Kingdom and Germany. I want to highlight that King's College Hospital in London which is part of the, and the National Health System Regional Genetics Laboratory in Belfast City Hospital, have recently adopted SAFIRE systems. Now the NHS is the national health service in the United Kingdom, and adoption of SAFIRE by these two important sites sets us up for growth in the UK as researchers seek to develop alternatives to their traditional cytogenetic methods there. We also expanded our installed base in Canada where SAFIRE was adopted by the University Health Network in Toronto. This network has the largest hospital lab in all of Canada, and they're going to use the SAFIRE system to research better methods for genome analysis across a variety of indications. Finally, we saw a good volume of samples coming into our lineage in business for analysis on that suite of laboratory-developed tests, which focus on pediatric neurodevelopmental disorders. And revenues for these diagnostic services contribute to the revenues that are listed on the services line on our P&L. Now, regarding product development, we continue to make Sapphire faster, easier, and more cost-effective to operate. This quarter, we increased the speed of our cloud computing solution by 30% and reduced the cost of it to the end user by 50%. New applications for optical genome mapping that we released this quarter include prenatal genome analysis on amniocytes, as well as solutions for genome analysis in connection with infertility research. Dr. Jim Broach at Penn State University, who is somebody who we've worked with for a number of years, published a method for solid tumor analysis by optical genome mapping, and Dr. Yuval Ebenstein, at Tel Aviv University published a method to analyze DNA methylation in cancer genomes. It's these types of publications and advances in methods that will allow us to expand into additional substantial markets. We also had an important patent issued that showed how different probes can be used to detect even more variants and possibly even single nucleotide variants. Now I want to talk a little bit about what we see as the critical milestones to achieving adoption of optical genome mapping as an alternative to existing cytogenetic methods. And these milestones include publication of large studies comparing optical genome mapping to the traditional methods that are used today, highlighting concordance with those methods and highlighting incremental improvement in finding the relevant variants that help better understand genetic conditions. Another milestone includes the development of assays on SAFIRE by these labs that are adopting the system. And then finally, acceptance of OGM assays by third-party payers. With regard to progress on the concordance data, MD Anderson Cancer Center published a study showing how SAFIRE significantly reduced the time to results for tumor analysis of subjects with myelodysplastic syndrome from several weeks to just four days, while being 100% concordant with the traditional methods and finding biologically relevant variants that the traditional methods did not find. This was a very significant enhancement. The Next Generation Cytogenomics Symposium featured a presentation from multiple speakers, each showing similar performance of SAFIRE for genetic disease, a variety of blood and solid cancer types. One highlight was a presentation by Dr. Gordana Rocca from Children's Hospital in Los Angeles, who showed that SAFIRE detects known druggable gene fusions in pediatric acute leukemias that panels typically used on next-generation sequencing or cytogenetic methods for these subjects missed. Also, in the first quarter, we had an increased scientific presence at major conferences at the 2021 Annual Clinic clinical genetics meeting of ACMG, one of the most important medical genetics meetings in the world. BioNano customers presented a record number of studies across each of our target growth markets. This base of public optical genome mapping data resonates with our potential customers and noticeably drives commercial interest and future adoption in the platform. And that's why we made a point of announcing how significant our presence at ACMG was this year. Development and validation of assays by end users who adopt the research-use-only platform is also important, and we see progress in this area in the U.S. and Europe as well. In the U.S., Augusta University has developed an assay for whole genome analysis with optical genome mapping for constitutional genetic disorders, and they are developing assays for prenatal analysis, and solid tumor analysis as well. In Europe, we expect the accreditation of optical genome mapping-based assays for acute leukemias and FSHD in certain European markets in this second quarter. And lastly, I want to talk a little bit about this challenge around third-party reimbursement, which is most acute in the U.S. Here we acquired Lineagen to help us overcome this barrier. With their CLIA license and vast clinical expertise, combined with the leadership of Alka-Chabay, we believe we can develop optical genome mapping assays on SAFIRE, validate LDTs that may improve upon the standard of care. We are leveraging the Lineagen existing portfolio of third-party payer contracts and certified coders to work out this path for reimbursement. ALCA has built an incredible effort to generate the most comprehensive data set needed for optical genome mapping to speed up this process of acceptance by the reimbursement community. ALCA is here today, and I'd like to ask her to tell you about this program. So with that, I will turn it over to ALCA.