Good morning, everyone. Thank you for joining the 2026 H.C. Wainwright 28th Annual Global Investment Conference. My name is Ahmed Mahmoud, an Associate Research Analyst here at H.C. Wainwright, and I am happy today to introduce our presenter for this session, Albert Luderer, Chairman and Interim CEO of Bionano Genomics, a genomics company developing optical genome mapping solutions for genomic analysis. Albert?
Thanks, Ahmed, and it is a pleasure to be here this morning. Beautiful weather. Our forward-looking Safe Harbor statement for everybody. This morning, I am going to describe Bionano, and this is a company that has digitized the human chromosome. In so doing, it is really changing the practice of laboratory medicine. Our technology is referred to as optical genome mapping, or OGM, so you will hear that a lot during this talk. It is a wonderful genomic analytic technique that is transitioning strongly into the clinic right now and is transforming the structural analysis of chromosomes for medical indications. We are obsoleting many of the major laboratory standards, and I will show you some of those later on. The reason it is doing this is because we can consistently identify previously undetected anomalies in chromosomal structure, which are directly linked to disease.
There is a tremendous amount of global clinical evidence that is building up for the last 7-10 years. We will show you some of that uptake later. It is really establishing the utility of this application across many branches of medicine, and especially in hematologic oncology and constitutional genetic diseases. We are also gaining tremendous traction in the clinical setting because of the reimbursement that is being realized by the technology. In January, we were granted CPT coding for both hematologic oncology and also for constitutional genetic diseases. These went live in January. In addition to that, we received very favorable news back in late August from MolDX.
You can read in the italics here, the provisional LCD, which is being considered now, it is open for public comment, is for OGM-based genomic wide molecular assay for the detection of copy number alterations, that is CNVs, and structural variants, SVs, in hematologic neoplasms. This is a big move for us, and I will show you a map what that potential coverage means later in the talk. We also have other applications beyond the immediate human clinical applications, and that is in the quality control of re-engineered cells for therapeutic benefit. We think the market, by the way, is approaching $10 billion. There have been a lot of decades of diagnostic disruption. I have lived through all of these, so I can speak with some certainty about them.
Starting in the 1990s with the in situ hybridization technology that really was automated and made practical by Ventana, which is now part of Roche. Then PCRs, and one of the major innovators in PCR is sitting right in front of me, Dr. Erik Holmlin, who helped move agar plate bacteriology onto polymerase chain reaction based methodology, genome sciences. Then finally, next generation sequencing. Our friends at Illumina have really redefined the sequencing space. Finally, what Bionano has done is really altered or entered a new era of genomic-type medicine, which is all digital. It is digital pathology.
This is a major move in pathology, and this is a cartoon which really shows a little bit of a lab look and speaks about cytogenetics, molecular technology, and then anatomic and clinical pathology, and the different types of techniques that are used there, karyotyping, FISH, RNA transcriptomics, DNA sequencing, et cetera. Many of these are analog technologies and how they are consolidating it down to a digital approach. OGM is covering the majority of cytogenomic and some of the molecular technologies, and then sequencing is taking on the rest of this sphere. I find it easier to talk about this if you take a look at the chromosome. On your left, you see a chromosome that has been linearized, and from the whole chromosome down to a single base pair running left to right.
If you come down, you see cytogenetics used as a major cancer diagnostic, karyotyping and FISH, which is targeted to look for specific alterations, and then arrays to look for copy loss or gain. Then you see a coverage gap, and as you get down to smaller and smaller regions, you have more difficulty targeting those until you finally get into very short sequences and down to single base pairs, and that is all covered by sequencing. What is really interesting is OGM covers the majority from the whole chromosome all the way down to about 500 base pairs of size. It is really quite a spectacular range, and it offers an orthogonal view of what the chromosome looks like and complements long-read and short-read sequencing results.
We also have a software called VIA, which links all these technologies together and comes up with a comprehensive recommendation of what the problems are with this particular patient. With karyotyping, this is something that has been around for many years. It is being practiced less and less because it is difficult to do, and it is expensive. It is not well reimbursed. There is a high error rate with it in terms of its ability to predict an outcome or particular disease. With fluorescent in situ hybridization, you are really guessing which probes you want to use, and therefore, if you do not estimate correctly, you really have a rule-out test, not a rule-in test for use there. Lastly, microarrays are really good for copy number, and that is about it.
We also note that as you look at the technologies, nothing is really sufficient to completely look at re-engineered cells in terms of their ability to go back into patients and authenticate that you have changed that region of the chromosome that you want to change. This is what our technology looks like, and I couldn't resist putting this slide in. You're looking at a Saphyr system on top, and on the bottom, a cartoon of what the flow cell actually looks like. You'll see a reservoir, a lip on a reservoir, and the purified DNA, which is also labeled with a fluorescent tag, is offered to the flow cell, and then it is forced through channels until it finally reaches the nanochannels. There's well over 100,000 nanochannels. What you're seeing on the right is the image of whole strand, double-stranded DNA flowing through the chip.
It's really kind of a spectacular demonstration of technology. What we then do is we take a shot once it's streaming properly, and we deconvolute that image and reconstruct the chromosomal structure from those images. In this slide, we just compare what you're looking at. Every one of those little fluorescent dots in this image represents a base pair motif, and each one is about 500 base pairs, roughly, from the next dot, as compared to something that is about five megabases, which is the typical size of a band that you would look at if you're looking at chromosomes. The resolution is spectacular compared to the old technology and offers a really new, great way to look at what's happening to the patient. This is our system. It's comprehensive. It starts on your left, you see our separation technology. It's called Ionic.
We also offer a manual isolation. Once the DNA is isolated, it's then labeled with a labeling kit, and then it's offered to the chip, which you can see on the bottom here. It's run in the analyzer, and this is our Stratys, which is our higher throughput analyzer. Then it's analyzed on a dedicated high-performance server, which is powered by NVIDIA GPUs. All this is deconvoluted into what you see on the very far right, is called the Circos Plot, which is very typically used in medical genetics to understand where there are structural alterations that are not normal. I mentioned that it's been strongly validated in the field. There are thousands of publications now, all clinical. You see last year, we counted 450 publications in the field. This year, we'll probably exceed that. This is a global effort.
Every continent on the planet is practicing this technology. On the far right, you see the number of genomes that have been looked at using our technology, and is now in excess of 16,000, and I remember when the first one was done. How do you focus commercially on this activity? We've focused where we believe cytogenetics doesn't work well, and that's in hematologic oncology, in constitutional genetics, and in cell and gene therapy. At the moment, our major focus is in heme/onc, and you can see the driving principle behind all this is the increase in yield from the potential diagnosis of a patient here. That's true in heme/onc, it's true in constitutional genetics, it's also true in cell and gene therapy. Let me tell you a little bit about the business.
I am showing you numbers that are based on the end of 2025, and at that time, we had 221 active sites with approximately 387 active instruments. We were looking at who is actually the main customer here. What we realized was about 25% of our customers were responsible for the majority of our sales. We label these customers routine use customers. There is more detail on them on the far right. Of approximately 130 major sites, all routine, those sites which have validated LDTs in their laboratory were doing about $131,000 per site. Whereas those that were working on approved LDTs were about 1/3 of that. What you can clearly see is once the technology is validated in the laboratory clinical setting, they become major users, and this has been the focus of our company.
We realized this in 2023, and in 2023, we set about changing the strategy to focus on those routine users and de-emphasize instrument sales, which was an early push for the company to make sure people had a platform so that they could actually do the technology. We also realized that there was a sufficient base to run these tests and to realize our plan to push flow cell utilization. We also took the tough decision to take out non-essential businesses and discontinued a legacy business called Lineagen, and that was a business that was a reference laboratory for developmental diseases of the newborn. We retained the CLIA-certified laboratories, but we dropped that business, and it dropped our top-line sales by $7 million. We had to make that up.
But in so doing, we also radically restructured our operations to really tighten the belt, and we did this on a global basis. This was the result of that belt-tightening. You can see on the bar chart, the non-GAAP OpEx trend dropped radically starting from first quarter of 2023 all the way to our last quarter recorded here, and this trend continues. About a 71% drop in expenditures, about a 25% gain margin. That gain continues. The core revenue this year, or this posted year, was $28.5 million. The EBITDA loss here was also dramatically reduced. This has become a real focus of the company, is to get this company EBITDA neutral and then positive in as quickly a fashion as possible. This is a KPI snapshot from our presentation, which is about three weeks ago.
We reported second quarter sales of $8.2 million. That is about 25% above a year prior. Also a record number of flow cells sold, 9,219. As we go forward, we expect that every quarter we will be approaching a record for the quarter. Frankly, we are only limited by our ability to expand our production line, which is one of the reasons why we need to raise more capital for the company. Very good gross margins also. Our gross margins have been improving on a quarterly basis, so we recorded a 53% gross margin last quarter. I want to show you a little bit about what we are looking at in the future years.
This probably is not a typical conversation for this type of congress, but I thought it was important because this company is at a breakthrough point. We need to bring in people who understand what we are doing and stick with us as we start to change this space of medicine. This is next year's outlook. We are projecting an approximate 56% year-over-year growth. We are thinking of that number is about $50 million-$54 million in top line sales, with about 48- 55 new instruments sold. We will get back to selling instruments next year. We will break this company even by fourth quarter next year. As you can see from the bar charts, the light blue is our flow cells. You can see that is the majority of where we make our money.
A steady instrument sales in the dark blue, then software predominantly sales up in the, I am not sure what color that is, brownish. This is what we look like next year. This is what we look like in a longer-term plan. Starting again with this year, our focus sales $31 million-$33 million, next year $50 million-$54 million, then $70 million, then breaking through to $100 million in FY 2029. As you see from the bar charts, the majority of this growth occurs with flow cells and also with some increased instrument sales. The growth is significant. You might ask why this year's growth at 19%, why we could not have done better this year. The reason is we are CapEx constrained. We could have done more, but we are living within the means that we have currently. You will also see the OpEx is held fairly constant.
The human resource personnel, all our terrific employees, modest growth to support what is going to be a $100 million business. You can see the flow cells growing from 39,000 all the way to 149,000. These are very complicated devices and a lot of planning, two years ahead of time, in fact, for foundry work to build those chips. I think we are in good shape with regards to the planning and the execution. It should be self-funding by 2029. You ask, can it keep going? The growth catalysts are very significant. First of all, the AMA CPT codes. For hematologic malignancies, you are looking at a reimbursement of $1,853 today at the laboratory level. To the right side, you see for the genetic disorders, that is $1,263 for each and every test done at the lab level.
Insurance coverage now, this is coming with MolDX, so that is in progress. I will show you a slide there that really speaks to how big the MolDX decision is going to be for us. Lastly, the market opportunity in Europe is quite large for us. We are working with national authorities there for reimbursement also. I asked our chief scientist to put together what MolDX actually means. I have been in this business a long time. I find a lot of this stuff confusing, so here is an attempt to un-confuse it. Every state that is in blue honors the MolDX coverage determination. You are looking at about 60% of the population of America with this decision.
Importantly, also, we're a little bit weaker represented on the West Coast, so this is a nice West Coast impact for us too, if this goes through as we think it will be. It also covers an awful lot of the de novo patients. Of course, this is a Medicare-type coverage, and private insurance will come after that. So we know the cancer's associated with aging, so this is all good. Last but not least, because we're in New York, I thought I'd leave you with this last statement. So New York State has approved the laboratory heme workflow for Memorial Sloan Kettering Cancer Center to use optical genome mapping in hematologic oncology. So this is the second approval in this state. For those of you who know lab medicine, getting a New York State laboratory approval is not trivial. So this is very good.
Of course, Memorial Sloan Kettering Cancer Center is a great place to be to have your technology to help patients. It's also second to University of Rochester, so in Upstate New York, Finger Lakes, they also have now that capability, and also New York State approved. So that's it. I'd like to thank you for attending, and I'm glad to answer any questions that you have.