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Bionano: BioDiscovery Acquisition Further Bolsters the Bull Case, Says Oppenheimer

Bionano’s (BNGO) profile has grown considerably over the past year, mostly due to the disruptive potential of its genome mapping platform Saphyr.

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

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

“We view Bionano’s strategic acquisition of BioDiscovery as an important buy-vs.- build transaction that: 1) rapidly expands BNGO’s informatics capability including 13 new informatics employees; 2) provides opportunities for cross-selling BioDiscovery’s NxClinical product with Saphyr; and 3) offers a platform for integration of Optical Genome Mapping (OGM) with other data types.”

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

On a different subject, looking ahead to Bionano’s upcoming Q3 earnings, DeGeeter expects sales of $4 million, which is based on for 14 “new placements” and a total of 135 Saphyr systems. This is roughly in-line with the Street’s $4.2 million estimate. Additionally, the 5-star analyst considers guidance for 150 installed Saphyr systems by the end of year as “achievable.”

DeGeeter is a fully-fledged BNGO bull; his 12-month price target stands at $14, suggesting gains of a whopping 155%. No need to add, the analyst maintains an Outperform (i.e. Buy) rating. (To watch DeGeeter’s track record, click here)

With 2 other recent Buy recommendations, the analyst consensus rates BNGO stock a Strong Buy. While the average price target doesn’t quite stretch to DeGeeter’s elevated levels, at $11, the figure is still anticipated to generate returns of 100% over the one-year timeframe. (See BNGO stock forecast on TipRanks)

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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.