Bionano Genomics, Inc.

Good day and welcome to the BioNano fourth quarter and full year 2022 earnings conference call. At this time, all participants are in a listen-only mode. To ask a question during the question and answer session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising you that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that this 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, Michelle, and good afternoon, everyone. Welcome to the Bionano Genomics fourth quarter and full year 2022 financial results conference call. Leading the call today is Dr. Eric Holmland, CEO of Bionano. He is joined by Chris Stewart, CFO of Bionano. After market closed today, Bionano issued a press release announcing its financial results for the fourth quarter and full year 2022. A copy of the release can be found on the investor relations page of the company's website. I would like to remind everyone that certain statements made during this conference call are forward-looking, including statements about BioNano's strategic and commercialization plans, sales pipeline, future fundraising activities and prospects, anticipated benefits or improvements to the SAFIRE system and ionic purification system, goals and anticipated milestones for 2023, and achievement of our Elevate Growth Strategy. Our anticipated compound annual growth rate, the size and our ability to access our estimated target markets, the advantage of the SAFIRE system and ionic purification system over current technologies, the anticipated benefits of recent acquisitions, expectations regarding timing and content of study results, and anticipated benefits of these studies in driving adoption of the SAFIRE system and ionic purification 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 BioNano's press release and BioNano's 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. In addition, to supplement BioNano's financial results reported in accordance with U.S. Generally Accepted Accounting Principles, or GAAP, the company is reporting non-GAAP operating expense. This non-GAAP financial measure is not meant to be considered in isolation or as a substitute for comparable GAAP measures. should be read in conjunction with the company's consolidated financial statements prepared in accordance with GAAP, has no standardized meaning prescribed by GAAP, and is not prepared under any comprehensive set of accounting rules or principles. A description of non-GAAP operating expense and reconciliation of non-GAAP operating expense to GAAP operating expense are included at the end of the company's earnings release issued earlier today, which has been posted on the investor relations page of the company's website. 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 now turn the call over to Eric.

Thank you, Amy, and good afternoon, everyone. Thank you for joining us today. I want to start off by saying that 2022 was simply a spectacular year for BioNano. We really couldn't be happier with the results. And in fact, we're just blown away with what we see as progress around the world in adopting optical genome mapping. We started 2022 in a pretty difficult macro environment. There was continued uncertainty around COVID, which was limiting our access to laboratories and impacting our ability to install the SAFIRE system. We faced challenges with chip suppliers. and production yields were lower than anticipated. And I'm happy to report that over the course of the year, we were able to get production yields back up and restore them to levels that they were previously. And then we hit our installed base milestone for Sapphire Systems for the year. And never once did we face any backlog or any inability to ship product to customers based on supply chain issues and that's a credit to so many incredible employees across our company who battled through difficult conditions to produce a great result and i'm thankful to them we kicked off our strategy for growth which we named elevate at the start of 2022 and we delivered against all of our elevate milestones for the year We met or exceeded our guidance for revenues on both a full year basis and in each quarter over the course of the year. I'd like to take a little bit of time to share with you some highlights from our 2022 achievements, including those in the fourth quarter. To begin, we grew the installed base of Sapphire Systems in the world to 240. which represents a 46% increase over the 164 systems that were installed at the end of 2021. In the fourth quarter of 2022, we sold 4,781 flow cells, which represents 49% growth over the same period in 2021 and brought the total for 2022 to 15,375 flow cells sold. That represents a 23% growth over the 12,518 flow cells sold in 2021. And that's just tremendous progress. You have to remember that the flow cell is the unit consumable that really connects most closely to the number of human genomes that are being analyzed by optical genome mapping. And so this growth is truly impressive. We continue to process a substantial number of samples for optical genome mapping through BioNATO laboratories. And this is a vehicle that we leverage to introduce people who are interested in OGM to how powerful that data is on their samples. Revenues for the fourth quarter of 2022 were $8.2 million, which is up 30% versus the fourth quarter of 2021. Revenue for the full year was, 2022 was 27.8 million, which represents year over year revenue growth of 55%. And we're incredibly impressed by the performance on the top line in the fourth quarter. And we believe it really shows what we're capable of doing in this business, both from an absolute standpoint, but on an ongoing growth basis. And so it's an outstanding outcome for our team selling optical genome mapping and our other products, clinical services and software. In fact, we exceeded the goals and expectations for all of our planned milestones over the course of the year and advanced the company strategy as well as our products. I'd like to share some of those key highlights from the full year. We made significant progress towards streamlining the optical genome mapping workflow with our acquisition of Purigen Biosystems, which closed in November. of 2022, that acquisition brings their ionic system, which uses isotacophoresis technology, into our optical genome mapping workflow. And we believe that it really completes the assembly of the extremely streamlined end-to-end workflow for optical genome mapping once we launch the ionic system. and its consumables for OGM. We developed and released enhanced kits for DNA isolation and labeling in our OGM workflow, the SP G2 labeling kit and the BioNanoprep direct label and stain G2 DNA isolation and labeling kits. These enable a sample to result in as little as three days for cancer samples. And they are proving to dramatically increase the reliability of the workflow in customers' hands. And it's always been a key pillar of our strategy to delight customers with robust products. And these new kits do exactly that. We also released an automated version of our DNA isolation chemistry. which has been done in partnership with Hamilton and is linked to their long-string Vantage DNA isolation robot. We launched a number of optical genome mapping laboratory-developed tests, or LDTs, through BioNano laboratories. One is for hematologic malignancies, and another is for the genetic disorder FSHD1. We believe these allow healthcare providers to explore the clinical utility of optical genome mapping based assays through these LDTs, and we believe that this utilization will support efforts to gain coding and coverage for reimbursement by third party payers. We also met all of our milestones in our clinical studies for prenatal and postnatal and hematologic trials, including study enrollment targets, completion of our postnatal study, which has now been published as a preprint, as well as the interim publication of the prenatal study, which was published in December of 2022. We also initiated our solid tumor trial. These trials are critical to providing the critical mass of data that will be used to drive medical societies to support the inclusion of optical genome mapping in their recommended first-line tests. Several sites across the United States and Europe validated laboratory-developed tests, and in the United States, they submitted applications for reimbursement codes, including Z codes and proprietary laboratory analysis, or PLA codes, which enable them to get paid for optical genome mapping tests. And they have been very pleased with the level of reimbursement that's been assigned to these codes, ranging in the area of about $1,300 for constitutional genetic disorder testing. which is comparable to reimbursement rates available in the market today. NX Clinical Software version 7.0, which is the version of that software enabled for OGM data analysis, is being used in the field, and we are planning a full commercial release for applications in hematologic malignancies in the first half of 2023. A pre-commercial version of our next generation high-throughput SAFIRE system has been running in the field with excellent results, and we plan to launch that new instrument into the field this year. Initial launch will be in the first half of 2023, and we'll see adoption and installation towards the second half of the year. We expect this instrument to enable optical genome mapping analysis at substantially higher throughputs compared to the SAFIRE system. and that it will support labs that are running much higher volumes. Finally, there were a number of amazing publications that were published in 2022, and we believe they tell the story of optical genome mapping and how the future of the company will unfold. Five groundbreaking publications that I want to outline for you today are as follows. You may remember that we talked about an incredibly powerful publication from a number of scientists at the University of Texas MD Anderson Cancer Center where they described the use of optical genome mapping and evaluation of myelodysplastic syndrome or MDS prognostication. And what was incredible about this paper is it showed that up to 21% of study subjects had a different prognostic risk score when optical genome mapping was used to evaluate them compared to the standard of care. That's one in five people. So the impact of OGM cannot be denied. This publication really underscores it. Researchers from Necker Hospital in France found that optical genome mapping detected more clinically relevant variants in 33% of MDS patients and 54% of acute myeloid leukemia samples, which is a critical demonstration of the utility of optical genome mapping to go above and beyond the standard of care. Researchers from eight different institutes analyzed OGM's utility for cytogenetic abnormalities in, again, AML samples, and here they found that 12 percent of the cases had different risk levels and were eligible for clinical trials as a result of these new findings. This inclusion in clinical trials is incredibly meaningful because it connects these patients to potentially life-saving therapeutics that they otherwise would not have had access to without the findings of OGM. So you can imagine the impact of these findings. Researchers from Augusta University published the first validation study to evaluate the performance of optical genome mapping versus traditional methods for hematologic neoplasms, which showed an incredibly high technical performance and concordance rate with, importantly, 100% first pass rate, meaning that the reliability of optical genome mapping in these workflows is highly reliable and does not require repetition of the test, which drives up costs for payers and delays results to patients. Finally, researchers from a foundation at Kyoto University demonstrated the utility of optical genome mapping as part of a workflow to evaluate hypoimmunogenic induced pluripotent stem cells, IPSCs, and that this workflow could be used in regenerative medicine showing OGM's ability to detect off-target effects or areas where genome modification has gone awry and reveals that these modified stem cells may or may not be useful in a particular patient setting, and this is an area of significant interest in the adoption of optical genome mapping for various applications in cell therapy. At the close of this call, I want to go through our milestones planned as part of Elevate for 2023, but before doing that, I want to turn the call over to Chris Stewart, our CFO, who will review the financials for the year. Chris?