Volatility is back on the Wall Street menu, but extreme market moves are a familiar sight in 2020 for investors of life sciences company BioNano Genomics (BNGO). The wild ride has seen shares swing from one extreme to the other, although, unfortunately, mostly to the downside. Overall, shares have declined by 53% since the turn of the year.
However, if Maxim analyst Jason McCarthy’s forecasts are anything to go by, the next 12 months should involve plenty of upside.
The 5-star analyst has a Buy rating on BNGO shares to go with a $2 price target. The implication for investors? Upside of a massive 224%. (To watch McCarthy’s track record, click here)
So, what’s driving such a bullish outlook for this San Diego based micro-cap? Mostly it is down to the potential of the company’s genome imaging system, Saphyr. McCarthy argues the latest data available “continues to demonstrate that Saphyr is important in interrogating the underlying genomic causes of diseases.”
Last week, Bionano disclosed new data from the Mayo Clinic and University of Florida concerning studies of Amyotrophic Lateral Sclerosis (ALS) and Myotonic Dystrophy (DM), respectively.
In the two studies, the structural variations discovered assist in improving the understanding of the underlying disease processes, and were in the 10s to 100s of thousands of base pairs, which current short and long read sequencing technologies cannot accurately measure.
“Both of these studies demonstrate that technology like Saphyr is needed to better understand the disease mechanisms (the variations were too large for sequencing technologies) which can lead to better diagnostics, support drug development, and facilitate theranostics,” McCarthy noted.
But Saphyr is not the only reason for McCarthy’s bullish thesis. In August, Bionano acquired molecular diagnostic services company, Lineagen, in a deal worth $9.6 million, and last week saw the launch of a new product from the Lineagen pipeline - the EpiPanelDx PLUS. The new laboratory developed test is based on a proprietary panel of 223 genes correlated to epilepsy and is tailormade for patients experiencing seizures, infantile spasms, encephalopathy, or febrile seizures.
With 3.4 million people affected in the US alone, McCarthy believes epilepsy represents a significant market opportunity.
“A test like EpiPanelDX PLUS can help patients by explaining the underlying genetic causes, which can enable more personalized treatments, avoid potentially ineffective and even harmful treatments, and provide a more concrete diagnosis for patients,” the analyst explained.
McCarthy might be Wall Street’s most prominent BNGO bull but both other analysts to have posted a review over the past 3 months have high hopes as well. The two additional Buys coalesce to a Strong Buy consensus rating and come with a $1.55 average price target. Upside from current levels is an impressive 151%. (See BNGO stock analysis 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.