Good day, and welcome to the Bionano third quarter 2023 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to David Holmes from Investor Relations. Please go ahead. Thank you, operator, and good afternoon, everyone. Welcome to the Bionano third quarter 2023 financial results conference call. Leading the call today is Dr. Erik Holmlin, CEO of Bionano. He is joined by Gülsen Kama, CFO of Bionano. After market close today, Bionano issued a press release announcing its financial results for the third quarter of 2023. 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 may be forward-looking, including statements about Bionano's annual and quarterly revenue outlook, profitability, cash runway, commercialization and product plans, its strategic pillars and associated publicly announced milestones, the anticipated benefits and the timings of those benefits from the announced reduction in force and other cost savings initiatives, advances in obtaining reimbursement and FDA clearance for OGM, and Bionano's expectations regarding study results and publications, and anticipated benefits of these studies and publications in driving adoption of OGM. Such forward-looking statements are based on 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, November 8th, 2023, 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 and non-GAAP gross margin. These non-GAAP financial measures are 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, have no standardized meaning prescribed by GAAP, and are not prepared under any comprehensive set of accounting rules or principles. A description of both non-GAAP operating expense and non-GAAP gross margin, and reconciliations of non-GAAP operating expense to GAAP operating expense, and non-GAAP gross margin to GAAP gross margin, are identified 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 on the company's investor relations page. With that, I would like to turn the call over to Erik. Thank you, David, and good afternoon, everyone. We accomplished a lot in Q3, and we look forward to discussing the progress in detail. Importantly, we took significant steps to reduce operating expenses and to extend our cash runway, which together helped shorten the potential path to profitability. The focus on managing expenses and driving toward profitability is in part facilitated by the change in financial leadership of the company with the appointment of Gülsen Kama to the role of CFO, which was effective September 11th, 2023. Gülsen is going to open the call today by walking you through our financial results for the quarter and explaining how some of the initial steps in our streamlined operational plan will reduce costs. Gülsen? Thanks, Erik. I'm pleased to be on board at Bionano and to join the effort to help expand the adoption and utilization of OGM around the world. To achieve that goal, we have to be financially disciplined as we seize the opportunities ahead of us. With that, let me share our results for the third quarter of 2023 with you. Revenue was $9.3 million, representing a 29% year-over-year increase to the same period of 2022, which exceeded our original guidance of $8.8 million-$9.2 million provided on our second quarter earnings call, and is in line with our earnings pre-release. The Saphyr installed base grew to 301 systems during Q3, which represents an increase of 20 systems in the quarter and 39% growth over the installed base of 217 at the end of Q3 2022. We sold 6,176 flow cells in Q3 2023, which represents a 55% year-over-year increase over the 3,975 flow cells sold in the same period last year. GAAP gross margin for the third quarter was 30%, compared to 25% during Q3 2022, and non-GAAP gross margin was 32%, compared to 25% in the same quarter last year. Third quarter 2023 non-GAAP gross margin excludes $0.2 million in stock-based compensation. Third quarter 2023 GAAP operating expense was $116 million compared to $34 million in the same period in 2022. Non-GAAP operating expense in Q3 2023, which excludes $84.1 million in GAAP charges, as described in our press release, mainly comprised of a one-time impairment charge of $77.3 million, related to revaluation of goodwill, was $31.8 million, compared to $26.3 million in Q3 2022. The increase was driven by higher headcount, R&D, and marketing expenses related to product launches. Non-GAAP operating expense in the third quarter went down $2.8 million, compared to $34.6 million in Q2 2023, mainly as a result of headcount reductions implemented in May of this year. We raised net proceeds of $12.7 million on our ATM facility, selling on a split-adjusted basis, 2.11 million shares at an average price of $6.16 per share. Our cash, cash equivalents, and available-for-sale securities as of September 30th, 2023, was $63.6 million. Now, I want to discuss the steps we have taken since the end of the quarter to streamline operations and to extend our cash runway. On October 9th, we implemented additional cost reductions in continuation of the reductions initiated in May 2023. These cost savings initiatives included reduction in force and steps to reduce facility costs and discretionary spending unrelated to headcount. When taken together with the cost savings realized from the reduction in force the company announced in May, we expect to see an annual cost savings of approximately $33 million starting in 2024. We also announced the completion of an $80 million registered offering and concurrent private placement. Our objective with this financing was to obtain enough capital to provide a meaningful extension in the cash runway, while also managing the dilutive impact. We believe we found a good balance in achieving both objectives through this financing. Back to you, Erik. Thanks, Gülsen, and welcome aboard. Great results, and congratulations on your first earnings call. We're pleased to have your energy and skills as we navigate an important phase for Bionano. I would now like to talk to everyone on the call about our plan going forward. I've just returned from the annual meeting of the American Society of Human Genetics in Washington, D.C., where thousands of clinical researchers, lab directors, and physicians meet to discuss the latest advances in human genetics. Based on the overwhelming number of talks, posters, publications, and mentions of optical genome mapping, I and my whole team believe that OGM is now widely recognized as a powerful alternative to traditional cytogenetics, with the potential to have a tremendous impact on health outcomes and health economics. Our strategy moving forward is straightforward. We need to accelerate revenue growth and operate efficiently to reach profitability. When we first established the Elevate strategy, it was based on six pillars. We now see it's more important than ever to be focused on those strategies that will result in achieving our goals in as expeditious a manner as possible. Therefore, moving forward, Elevate will be based on four pillars. Number one, expand global adoption and utilization of OGM in hematologic malignancies, cell and gene therapy, and rare diseases, with a robust end-to-end workflow as an alternative to traditional cytogenetic techniques for efficient detection, analysis, and reporting of structural variants. Number two, clear the path for value-based reimbursement of OGM and inclusion of OGM analysis into medical society guidelines by addressing the need for large data sets, showing clinical and health economic value of OGM. Number three, obtain regulatory clearances in the United States and the European Union to make adoption of OGM easier for labs that require such clearances. Number four, drive operational efficiency to shorten the path to profitability. We're making great progress along these strategic pillars. In addition to strong revenue this quarter, we saw growth in the adoption and utilization of optical genome mapping, with increases in the install base of Saphyr systems and growth in flow cells sold. Installations of our newly released VIA software as a critical component of the end-to-end workflow, first for heme, began at the end of July. Many laboratories are now in various stages of integrating VIA for visualization, interpretation, and reporting of OGM data. The response to the early access program for the Stratys system has really exceeded our expectation. Stratys systems are now in the field, and installation and testing have begun. Full commercial availability of Stratys is expected early in 2024, based on our ability to ramp production. Automating sample preparation is an important component to the front end of the OGM workflow, as VIA is to streamlining the back end. Our development work to adapt isotachophoresis, or ITP, for the isolation of ultra-high molecular weight DNA for OGM on the Ionic system, is progressing well, and we're on track to have a pre-commercial version of that capability in the field by the end of this year. Hamilton, which offers the Long String STAR V system for isolating DNA for OGM, presented data at the ASHG conference, showing their systems perform well. They also discussed their plans to automate the DNA labeling step for OGM. Automating as much of this workflow as possible is really important to driving maximum utilization of the higher throughput that Stratys brings to market. We also saw amazing progress around reimbursement of OGM-based tests, as two labs, Praxis Genomics and Augusta University, received an approval from CMS of $1,863.22 for their proprietary analysis or PLA codes for hematologic malignancy testing, after going through the Gap Fill process with CMS. Regarding the critical mass of data in the field that's required to influence third-party payers and impact medical societies as they're evaluating the inclusion of OGM into their guidelines, I'd like to highlight the terrific growth we saw this quarter in the number of publications. Overall, publications featuring OGM were up 61% from Q3 2022 to Q3 2023, including a total of 47 human-focused publications, which demonstrates the utility of OGM in clinical research. The number of publications on rare diseases grew a remarkable 172% from 2022 to 2023, with increasingly large average numbers of samples per study. Now, we have also formally engaged with the FDA around a future FDA-cleared assay to be run on the Stratys system, and we've received positive initial feedback, and that process will continue into 2024. Looking ahead at strategic milestones we've previously outlined for the second half of 2023, we remain on track to meet our goal of installing 325 optical genome mapping systems by the end of 2023. Our prenatal and postnatal and hematologic malignancy studies remain on track to meet the associated milestones planned for the end of this year. Finally, I want to reiterate our full year 2023 revenue guidance, which we originally provided at the outset of the year, of $35 million-$38 million in top-line revenue. We look forward to updating you on our Q4 call regarding the progress toward the remaining 2023 milestones. Operator, please go ahead and open the line for questions. Thank you. And as a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. For our first question, it comes from the line of Jason McCarthy from Maxim Group. Your line is open, please ask your question. Hey, guys. Thank you for taking the question. This is Michael Okunewitch on the line for Jason. So I guess, to kick off, I'd like to see if you could just give a little bit more clarity on what the pathway is to gaining FDA approval for the assay on the Stratys system. What sort of data do you need to produce for that? Yeah. Hey, thanks, Michael. So the process involves a series of engagements with FDA, followed by a clinical study. The clinical study is relatively small, and can be conducted within a reasonably short period. We'll likely do that trial later in 2024, and we would be seeking to establish substantial equivalence to existing standard of care methodologies. Part of the discourse that's ongoing with the FDA right now is the specific clearance path that we choose. We're fairly convinced, although it remains to be something that the FDA and we agree upon, but we're fairly convinced that pre-market approval won't be required, but there are other paths around 510(k) clearance that we would need to decide to follow and then get support with the FDA. So we're engaged in those discussions now. And there are certain aspects of product development ongoing to support that trial around the proper documentation in connection with the development of the product, the software, and the assay as one integrated system. But we'll be in a position, we currently hope, to conduct that clinical trial sometime later in 2024. All right. Thank you. And then, I would like to just follow up and see if you could provide a bit more color on the financing, and in particular, in the context of trying to understand your cash balance and how that looks going forward. Could you explain a bit more about how the redemption feature works that was utilized on November 1st? And then do the redemptions include the full amount of interest on the amount redeemed, or is that prorated to the amount of time elapsed until maturity? So, you know, with regard to the convertible debt deal overall, I think as you know, there's a portion of it which is unrestricted and a portion of it which is restricted. The restricted portion is released upon paying down the initial unrestricted portion and then meeting other financing conditions. And so the process of retiring that initial restricted portion includes the retirement through the redemption, and the redemption feature does include, you know, financing charges and interest on top of that. All right. Thank you for that. And then just one last one, I'll hop back in the queue. Regarding the gap fill rate that you got, that Praxis and Augusta got, how does that compare to the actual cost of the materials for running that test? So these are, rates and codes that have been obtained by those labs, and so we actually don't know, right? They, submitted the application and drove the Gap Fill, but the standard process is to fully burden their costs and include, what would be considered a fair margin. So I suspect that they have a good margin at that rate. All right. Thank you very much for answering my question and congrats on the progress this quarter. Yeah, thanks, Michael. Thank you. And for our next question, it comes from the line of Sung Ji Nam from Scotiabank. Please go ahead. Hi, thanks for taking the questions. Maybe, let's see here. Kicking off with Stratys, we'd love to hear any feedback you're getting from the early access users, including kind of what type of—you know, if you're seeing utilizations on the system, kind of tracking in line with your expectations there. And then do you expect significant buildup of backlog heading into next year for the full commercial launch? Thanks, Sung Ji. So it's a little bit early to have concrete feedback from users, so the installations have just begun, and, you know, given that it's a brand-new instrument, it takes some time for us to even qualify it on site, so that process is ongoing. And, you know, what I can tell you about, though, is that, you know, labs are really focused on bringing on that product in that they have identified a variety of use cases that indicate to them that they need the higher throughput that Stratys offers. And so excitement is high, and let's hope that Stratys delivers. And we, of course, believe very confidently that it will, and we're excited to have it out in the field. With regard to a backlog into 2024, I, you know, only want to say sort of anecdotally that we, we've had, you know, a tremendous response to Stratys, that in I think many respects, this exceeds our expectations towards the early access program. So quite a number of labs have raised their hand and asked to be a part of that. You know, in the event that those requests exceeded the sort of number of early access systems that we have available, which is 10, we believe that they would still be interested in adopting the full commercial model of Stratys. And what we're doing now is managing that transition between one product, the Saphyr system, into an environment where we have two products, Saphyr and Stratys. And this is one of the more tricky paths that a leadership team, especially a commercial team in this industry, has to traverse. And, you know, so we're making sure our principal focus is that customers are excited about adopting optical genome mapping, and they get the system that's best for them, whether that's Saphyr, or Stratys. And, you know, so far, and, you know, based on the guidance that we've provided, we, we think that we are navigating that transition smoothly. Great, that's super helpful. And then just on the VIA software launch, just kind of curious if you expect all the customers you know, currently doing hematological research on hematological malignancies to convert over to that? Just kind of curious, kind of what you expect from a penetration standpoint. Yeah. So I think it's reasonable to expect that the vast majority, I mean, substantially all, there's gonna be that one lab that doesn't want to do it, but substantially all of the labs will convert. The timing of the conversion is a little bit dependent on, you know, their progress, because a new software would need to be revalidated in some cases, depending on how they're using the platform. And so they will pick the right point in time and perhaps align that revalidation with bringing on, you know, other menu items or other applications that they would be running. But, you know, for us, the expectation is that everybody adopts and, you know, so we believe that that will be the case. Got it. And then lastly from me, on China, great to see a lot of your OEM customers, gaining traction there. Just kind of curious, you know, given the environment, the macro environment and kind of a lot of the larger cap tools companies, and, you know, seeing increasing headwind in China, just kind of curious, I would love to hear your perspective, just from Bionano's standpoint, kind of what, you know, what your expectations are kind of heading into next year in China. Yes, it's a good question, and we're watching with great interest the reports of other companies in the space. What I can tell you is that, you know, we reiterated guidance, a full year guidance, and that includes sales to China. We've been progressing well, and so we're not seeing pressure that would cause us to come off of those numbers, but it's clear that spending on research has seen some headwinds in China. And, you know, one of our rationalizations for us thinking that we're gonna continue to progress there, is that the applications that optical genome mapping get used for there are very, very close to, you know, healthcare applications, clinical research, as opposed to academic and basic research. And so that's why we were comfortable reiterating guidance. Of course, there's a, you know, global aspect to the whole revenue mix, but we're mindful of the sort of headwinds that others are facing, and, you know, we're going through China carefully this quarter. Sounds great. Thank you so much. Thank you, Sung Ji. Thank you. For our next question, it comes from the line of Jeffrey Cohen from Ladenburg Thalmann. Jeffrey, your line is open. Please ask your question. Oh, hi, Erik and Gülsen. How are you? We're well, Jeffrey. So, a few questions from our end. So firstly, could you maybe talk about, the newer systems that have been placed for Saphyr? Could you tell us if, what you're seeing as far as sales or leases or per-use arrangements, as far as any, flexibility that you have on the sales front, and is a, a right purchase, becoming more or less of an obstacle from, more recent quarters? So, you know, the go-to-market model for the early access systems mirrors in many respects what we do for the Saphyr system. And so there's a flexible rental program and the purchase model, and the pricing on the purchase is, is higher. But what we're seeing in terms of the distribution, and again, it's early, so the statistical significance of the observations is probably not really well established. But what we're seeing in terms of the distribution is that it's comparable to what we see for the Saphyr system. So some rental and some purchase. Okay, got it. And then Gülsen, can you perhaps walk us through some of the commentary as far as the $33 million in savings expected for 2024? I mean, I guess how we're looking at it, you're talking about a 20% reduction off of SG&A and R&D, when could you outline perhaps for us, where you're gonna see some of those savings and perhaps which line item may see a more pronounced reduction than the other? Thank you. Thank you, Jeffrey. So in terms of the $33 million savings, it is actually, some of it is coming from the cost of goods sold area, relatively small, proportionally small. And as you said, most of it is in R&D and SG&A. And big part of the savings, it was actually in our announced, in our pre-release, we talked about the headcount reductions, so you can ex- and combined with the ones that we did back in May. Big portion of the savings will come from that area. Now, we have looked through every line item on the P&L to see where else we can achieve savings. So, you know, it varies, but I don't think there's anything that was untouched. So hard for me to give you the exact guidance, but certainly the majority is from headcount reductions. Okay, got it. And then lastly, for us, could you give us a sense of pro forma shares and cash, please? I see the queue just hit as well. Yeah, I think it's best if you refer to the cover of the Q. And I think we described the cash balance as of 9/30, which was $63.6 million. Perfect. Okay, thanks for taking our questions. Thank you, Jeffrey. Once again, if you'd like to ask a question, please press star one one on your telephone keypad. For your next question, it comes from the line of Frank Brisebois from Oppenheimer. Your line is open. Please ask your question. Hi, this is Dan on for Frank. Thanks for taking my question. Just a quick one regarding Stratys. I know you mentioned that it's too early to talk about feedback, but just in terms of the early access program, is currently all 10 systems out in the field? And also, are all 10 of those users currently, were they already Saphyr users, or are they also users who are not? So, hi, Dan. What I can say is that we—all 10 are not out in the field, and that's not a demand issue, it's just based on our production timeline. So when we produce them, they go out. With regard to the sort of composition of users, what we see now, and this, this is actually really important, is that the majority of folks who are coming on board to adopt Stratus are new customers. And I think that that's a little bit of a unique component in, you know, this kind of a product cycle within the industry, and it's good. We introduced, you know, we developed the Stratys to address a segment of the market that was excited about optical genome mapping and the value that it brings to them, but unable to really implement it because of the throughput limitations that the current Saphyr has. And so when we start to see folks raising their hands to adopt Stratys and that they're new, new customers, what the connection there is that they actually have higher volume utilization plans for OGM in their lab. So I think that that indicates that we developed the right product for a segment of the market that we're not yet penetrating. Now, over time, I think we will see the conversion of Saphyrs to Stratys systems, but the purpose of Stratys is to really bring in new customers, new users, who are currently on the sidelines. Okay. A last one from me. You started the call highlighting the Human Genetics Conference that you attended. Could you give us a sense of the feedback from that compared to, say, a year ago? Would you say there is a notable increase in the lab's presentations that included OGM this time around? And also related to that, any particular area that you are noticing increased OGM adoption application, say, rare diseases, where you're seeing an increase in publications, basic versus clinical research? Any color there. Yeah. So, you know, ASHG is, you know, really one of the premier meetings, conferences around the world. Takes place every year around this time in the fall. And ASHG is somewhat, you know, differentiated from others in that it has a, you know, heavy orientation towards research, but there's a lot of clinical folks there as well. And I would say that if we compare the presence of optical genome mapping in that environment this year to that of last year, what I think is, and of course, this is, you know, anecdotal based on my observations, but I've reviewed those observations from all of our folks who are there. The observation is that we are really in the regular conversation of techniques that are intended to be used throughout clinical translational research. The kinds of clinical translational research that we're talking about here are the understanding of genetic diseases. Now, that may be in a workflow where a patient gets tested and subsequently enrolled in a research program because the standard of care didn't really reveal any useful information. That happens about half the time, by the way. So that's the kind of research that's going on. The other kind of research that's going on is to really use optical genome mapping to explain very complex disorders. An example that came up in our meeting was neural tube defects, things like spina bifida and other disorders. And, you know, the genetics of these diseases are incredibly poorly understood, and what's amazing is that optical genome mapping is unlocking an incredible new understanding. Why is that important? Therapeutic application. So treatment of these disorders can be developed on the basis of this new information. You know, an abundance of these types of presentations, posters, talks, some of them in Bionano sessions that we organized, but amazingly, as part of the regular program, we see optical genome mapping featured very prominently. Our observation is that with regard to that community, optical genome mapping is really part of the mainstream. If you compare that to a year ago, it was just beginning. I think a year ago, there was a dedicated session in the regular program to optical genome mapping, but it was something that was really new. The last thing that I'll comment on is that there were a number of important publications that are intended to represent industry-wide views. The Thompson and Thompson Genetics and Genomics Manual, which came out earlier in the year, this was something that we were able to talk about, and the inclusion of optical genome mapping into that edition, the ninth edition, is really a step forward around the awareness of what we're doing. Then there was a rather significant review publication that came out right around the time of the start of the meeting, and it was written by many, many preeminent scientists and researchers who really set the tone for that entire community. This is an extensive publication that covers not only optical genome mapping, of course, but all of the different methods. When you look at publications like that, they're starting to spell out algorithms that discuss the use of optical genome mapping alongside all the other tools. So the reason that that kind of advancement is so incredibly important is that when Bionano commercial teams goes to a lab and says, "Hi, I'm here to talk to you about optical genome mapping," a year ago, the question that they would get is, "Where does optical genome mapping fit in my lab, and what should I do with it?" But now, after all these publications, they understand the answers to those questions before we meet them. It's a huge leap forward for us, so thanks for giving me a chance to talk about it. Thank you. That's very encouraging. Thanks for taking my questions. Thank you, and there are no further questions at this time. I would now like to turn the conference back to Erik Holmlin, CEO, for closing remarks. Thanks, Kyle. I appreciate everyone joining here today. We're excited to finish out this fourth quarter and then share with you the results after the end of the year in our full-year call. Thank you very much for joining today. This concludes today's conference call. Thank you for participating. You may now disconnect.