BNGO Stock: Bionano Genomics Is Flying on COVID-19 News

BioNano Genomics Inc (NASDAQ: BNGO) is screaming for the top in the market this morning, and for good reason. The company announced COVID-19-related news, exciting investors. This is a strong follow up on the autism news released last week. Here’s what’s going on:

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BioNano Genomics Announces COVID-19 News

In the press release, BioNano Genomics announced the first publication from its COVID-19 Host Genome Structural Variant Consortium. The company explained that the study found that optical genome mapping with its Saphyr System identified structural variants, also known as SVs, that affect genes in pathways that control immune and inflammatory response, viral production, and mucosal function. 

In the release, BNGO said that the authors believe these SVs may provide key insights into the pathogenesis of COVID-19 and outcomes in patients who become severely ill. 

The company went on to explain that the consortium was formed by Dr. Ravindra Kolhe from Augusta University. The goal of the consortium is to identify large SVs that factor into the clinical course and outcomes of patients who contract COVID-19. 

The analysis of the host genome was unlike anything before as these analyses are usually limited to genome-wide association studies or exome/genome sequencing. They also generally aim to detect single basepair changes. However, the consortium focuses on finding larger variants in patients’ genomes because they are believed to have a greater potential impact. 

Based on Saphyr’s previous performance, the consortium selected OGM with the Saphyr System for genome analysis. 

BNGO went on to explain that the study reports the analysis of the genomes of 37 patients who were admitted to the ICU at Augusta University with severe COVID-19 disease. The company explained that 30 of these patients needed mechanical ventilation with a mean intubation duration of 12 days. Unfortunately 12 patients died. 

The company went on to explain that one of the most compelling findings among the SVs identified was the duplication of the STK26 gene. This is a key element of the Toll-Like Receptor signaling pathway which controls the cell’s response to viral infection. 

Importantly, the study found significant upregulation of the STK26 gene in all severely ill patients tested, but not asymptomatic COVID-19 patients. As such, the company believes the duplication to be a potential novel, prognostic biomarker for severe immune response seen in severely ill patients. 

Management Commentary

In a statement, Ravindra Kolhe, MD, PhD, senior author of the study, had the following to offer:

As director of a high-volume testing lab at Augusta University for COVID-19 I’ve seen first-hand the pain and devastation this virus can cause in those who get severely ill. The majority of the ICUs across the country are filled with patients fighting for their lives, yet we did not know why some become so severely ill while the same virus causes only mild symptoms in most. Our study shows clearly that many of the severely affected patients carry genetic variants that may cause or at least contribute to the severity of their disease by weakening the effectiveness of the immune response, increasing viral replication, or making it easier for the virus to spread between cells in the body. Importantly, the large genomic variants detected by optical genome mapping in this study are typically missed by the short-read sequencing or SNP-based methods used in other studies, which explains why previous studies haven’t made the same impact.

The above statement was followed up by Erik Holmlin, PhD, CEO at BNGO. Here’s what he had to offer:

The COVID-19 pandemic continues without signs of slowing down. This study demonstrates that the wide variation in symptoms exhibited by patients is likely not random for most of them, but instead, at least partially, the result of SVs affecting critical pathways in patients’ defenses against infection and immune responses to the disease. The results also demonstrate that even when a disease has already been studied extensively with sequencing, OGM with Saphyr has the potential to reveal significant insights not seen without it. While we are devastated by the loss of lives caused by this global pandemic, we are grateful that our genome analysis platform can contribute to a better understanding of the disease and possibly help save lives.

Today’s News Follows up on Autism News From Last Week

Importantly, this isn’t the only positive news we’ve seen out of BioNano Genomics recently. In fact, just last week the company announced a publication in the Journal of Personalized Medicine by Lineagen, its CLIA certified diagnostics services subsidiary. 

The publication surrounded an analysis of Professor Temple Grandin’s genome in one of the most comprehensive evaluations of a single genome of a high functioning individual with Autism Spectrum Disorder. 

BNGO went on to explain that through the use of the Lineagen’s suite of genetic tests, customized for individuals with ASD and other disorders of childhood development, the study identified novel variants in known ASD risk genes and other genetic variants important to her health and wellness. 

Moreover, these findings have led to the improved management of Professor Temple Grandin’s symptoms. 

What Analysts Think About BNGO Stock

According to TipRanks, analysts have a pretty positive opinion of BNGO stock. In fact, there are currently three analysts covering the stock, one that rates it a Hold, and two that rate it a Buy. 

Price targets on the stock range from $0.75 to $2 per share, with an average coming in at $1.42. However, it’s important to remember that there has been quite a bit of positive news since these price targets were issued. As such, I’m expecting to see major revisions upward relatively soon. 

Nonetheless, you should also keep in mind that it’s never a good idea to blindly follow the opinions of analysts, or any expert for that matter. However, it is a good idea to use these opinions as a source of validation for your own. 

Risks to Consider Before Buying BNGO Stock

If you’re going to invest, you’re going to accept risk. BNGO stock is no exception to that rule. Before diving in, prospective investors should take time to consider the following:

  • BioNano Genomics Doesn’t Make Money. Sure, the company generates revenue, but that revenue isn’t nearly enough to keep the company above water. If BNGO can’t reach profitability before its funds run out, it may sell newly-issued shares in an attempt to raise funds, which will ultimately lead to the dilution of existing shareholder value and likely significant declines. 
  • A Speculative Bet. BioNano Genomics’ business model is a largely unproven one. As a result, an investment in the stock is a speculative bet that could result in significant losses. 

Final Thoughts

While there are risks to consider, there are risks associated with any investment you make. When it comes to BioNano Genomics however, there’s also quite a bit of opportunity. 

The company’s Saphyr System is proving to be invaluable in the assessment of genes that may play a major role in the treatment of key conditions like Autism Spectrum Disorder and COVID-19. Should the company continue on this positive trend, its technology may become a cornerstone in the biotechnology space as a whole, creating a compelling opportunity surrounding BNGO stock.