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Why Is Bionano Genomics (BNGO) Stock Up 20% Today?

  • Shares of biotechnology firm Bionano Genomics (BNGO) are up double digits in early afternoon trading.
  • The company demonstrated the viability of optical genome mapping for analyzing a class of genetic diseases.
  • BNGO stock soared 20%, though it pared back down gains to 10% as it entered the afternoon session.
BNGO stock - Why Is Bionano Genomics (BNGO) Stock Up 20% Today?

Source: Dennis Diatel / Shutterstock.com

Following brewing clinical momentum, shares of Bionano Genomics (NASDAQ:BNGO) — a biotechnology firm specializing in nanoscale imaging and analytics — soared on Thursday. This came after the company announced the publication of a new study. The study demonstrated the utility of optical genome mapping (OGM) in the analysis of repeat expansion disorders, or a class of genetic diseases. Potentially providing an alternative to the traditional (and time-consuming) mechanism of DNA detection, BNGO stock skyrocketed on the underlying implications.

According to the details of the study, “researchers screened 626 samples for the presence of (AAGGG)n repeat expansions in the RFC1 gene using a combination of PCR [polymerase chain reaction] to detect repeat sequences, and OGM, to determine the size of the repeat expansions. OGM confirmed the presence of expanded RFC1 alleles in all cases where it was used as part of the workflow.”

Understanding the broader implications for BNGO stock requires some scientific background. Repeat expansions refer to diseases that catalyze expansions in DNA sequences. Further, these repeats can impact coding and non-coding sequences. That can result in a “diverse group of diseases with mechanisms linked to protein levels or toxicity, RNA, and/or both,” according to researcher Lisa M. Ellerby.

Traditionally, medical experts utilize Southern blotting to assess these repeat expansions. This process involves the “separation of DNA fragments by gel electrophoresis followed by the identification by labeled probe hybridization.” Examples of Southern blotting include DNA finger printing, paternity testing and criminal/victim identification.

While effective, Southern blotting is time and labor intensive. OGM offers a more precise and efficient protocol. Therefore, BNGO stock is benefitting from the enormous enthusiasm.

Clinical Momentum for BNGO Stock

Erik Holmlin, PhD, president and CEO of Bionano Genomics, offered further commentary on the study. “We believe this study helps demonstrate the important role OGM can play in understanding the most complex regions of the genome and that OGM is well-suited for the analysis of repeat expansion disorders that require the measurement of long, intact DNA molecules for accurate sizing.”

“We plan to continue developing better tools for the detection of a range of repeat expansion disorders, including those causing adult-onset ataxia and CANVAS.” Holmlin further stated, “We are optimistic that adding OGM to repeat expansion disorder research can potentially lead to better diagnosis for patients and more accurate data for neuroscience researchers.”

Indeed, Bionano is on a clinical roll. Earlier this month, the company announced landmark research evaluating the utility of OGM for patients with myelodysplastic syndrome (MDS).

Dr. Rashmi Kanagal-Shamanna, the corresponding author of the research paper, stated that the “results of this study demonstrate that we are grossly under-evaluating the degree of genomic aberrations. Most patients with high-risk MDS are not responsive to available therapies, pointing to the urgent need for new therapeutic alternatives that will improve the clinical outcomes of these patients and better tools to help in that pursuit.”

In response, over the trailing month, BNGO stock is up a staggering 128%.

Why It Matters

To be fair, despite the remarkable momentum, BNGO stock is up around 13% on a year-to-date basis. This variable performance reflects the often-volatile nature of biotech names.

However, one factor to keep in mind is that BNGO stock may be attracting short-squeeze speculation. As of data from July 15, 2022, Bionano shares feature a short ratio (or days to cover) of 7.55 days and a short percentage of float of 15.26%. Both figures are elevated, particularly the latter, raising the possibility of a contrarian burst to the upside.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.


Article printed from InvestorPlace Media, https://investorplace.com/2022/08/why-is-bionano-genomics-bngo-stock-up-20-percent-today/.

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