BNGO earnings name for the interval ending September 30, 2024.
Picture supply: The Motley Idiot.
Bionano Genomics (BNGO 4.53%)
Q3 2024 Earnings Name
Nov 13, 2024, 4:30 p.m. ET
Contents:
- Ready Remarks
- Questions and Solutions
- Name Members
Ready Remarks:
Operator
Good day, and welcome to the Bionano third quarter 2024 earnings convention name. As we speak’s convention is being recorded. At the moment, I wish to flip the convention over to David Holmes from investor relations. Please go forward.
David Holmes — Investor Relations
Thanks, operator, and good afternoon, everybody. Welcome to the Bionano third quarter 2024 monetary outcomes convention name. Main the decision at present is Dr. Erik Holmlin, CEO and principal monetary officer of Bionano.
And he’s joined by Mark Adamchak, Bionano’s vice chairman of accounting and principal accounting officer. After market at present, Bionano issued a press launch saying its monetary outcomes for the third quarter 2024. A replica of the discharge may be discovered on the investor relations web page of the corporate’s web site. Bionano expects to file its Type 10-Q no later than 5.30 p.m.
Jap Time tomorrow, November 14th. Sure statements made throughout this convention name could also be forward-looking statements, together with statements about Bionano’s income outlook, profitability, money runway, value financial savings initiatives, and commercialization, and product plans. Such statements are based mostly on present expectations, and there may be no assurances that the outcomes contemplated in these statements can be realized. Precise outcomes might differ materially from such statements attributable to a lot of dangers and components, a few of that are recognized in Bionano’s press launch and Bionano’s studies filed with the SEC.
These forward-looking statements are based mostly on info obtainable to Bionano at present, November 13, 2024, and the corporate assumes no obligation to replace statements as circumstances change. As well as, to complement Bionano’s monetary outcomes reported in accordance with U.S. usually accepted accounting ideas, or GAAP, the corporate studies sure non-GAAP monetary measures. An outline of those non-GAAP monetary measures, in addition to a reconciliation to the closest GAAP monetary measures, are included on the finish of the corporate’s earnings launch issued earlier at present, which has been posted on the investor relations web page of the corporate’s web site.
These non-GAAP monetary measures are usually not meant to be thought of in isolation or as an alternative choice to comparable GAAP measures, ought to be learn along with the corporate’s consolidated monetary statements ready in accordance with GAAP, don’t have any standardized assembly prescribed by GAAP, and are usually not ready underneath any complete set of accounting guidelines or ideas. An audio recording and webcast replay for at present’s convention name can be obtainable on-line on the corporate’s investor relations web page. With that, I wish to flip the decision over to Erik. Please go forward.
Robert Erik Holmlin — President, Chief Govt Officer, and Director
Thanks, David, and good afternoon, everybody. I am happy to supply you all with an replace on the third quarter of 2024, in addition to a report on our ongoing efforts to place Bionano to be more money environment friendly whereas nonetheless driving the development of optical genome mapping for routine use in cytogenetics, in addition to our software program enterprise. In Could of 2023, we started to systematically decrease working bills and money burn by lowering headcount, then discontinuing noncore services and products, scaling again sure improvement initiatives, and shifting our strategic focus towards driving utilization of consumables throughout our clients who use or plan to make use of optical genome mapping on a routine foundation, which is a gaggle we estimate to be about 150 clients. Since then, our headcount has come down from round 426 staff in Could of 2023 to 125 as of September thirtieth, 2024, which we additional count on to come back right down to lower than 100 staff getting into 2025.
In September of 2024, to additional cut back bills and money burn, we carried out a shift within the go-to-market technique that went away from heavy spending on development of the OGM put in base in any geography to a give attention to conserving money and concentrating on these clients who use their Saphyr and Stratys programs routinely in cytogenomics. We estimate that in the course of the six to seven trailing quarters, we now have decreased non-GAAP working bills by roughly $100 million on an annualized foundation and decreased the money wanted to succeed in profitability considerably. The transition in working and go-to-market methods will not be with out challenges. The outcomes on this quarter replicate the transition the operation is present process, which is leading to a number of one-time prices that have an effect on the P&L and the steadiness sheet.
General, these are transitory noncash prices that we do not anticipate seeing once more at this magnitude. Though this transition will not be with out its challenges, we’re studying the best way to function inside a streamlined workforce and happy to see the indicators of stability throughout the enterprise, together with return to development in consumable gross sales, particularly in reference to gross sales of OGM consumables to clients utilizing it routinely as a substitute for karyotyping and FISH, particularly in evaluation of hematological malignancies, constitutional genetic illnesses, and for evaluation in bioprocessing purposes, corresponding to cell and gene remedy. Now, altering the slide and looking at key outcomes for the third quarter. Income was at $6.1 million, which importantly contains $6.6 million in gross sales of core merchandise and softwares, which is consistent with our pre-announcement, however is then offset by $500,000 due to a write-down of aged receivables that’s tied to our discontinued scientific companies product.
Q3 2024 general represents a 35% year-over-year lower in comparison with the identical interval of 2023. However take into account that this lower features a 29% discount in revenues tied to the discontinued scientific companies merchandise alone. The remaining 6% lower is pushed by the shift away from instrument gross sales, each within the China market, as beforehand mentioned, but in addition on account of some system gross sales in different areas that had been delayed relative to our expectations. The OGM put in base grew to 368 programs in the course of the quarter, which represents a web improve of 67 programs over the last 12 months and 22% development over the put in base of 301 programs on the finish of the third quarter of 2023.
General, the speed of the rise of put in base is slowing, and that could be a direct results of our shift in go-to-market technique and cost-saving initiatives. We offered 7,835 circulate cells in Q3 2024, which represents a 27% improve from the 6,176 circulate cells offered in the identical interval final 12 months. Wanting into the outcomes a bit extra, we view this as a key metric as we drive elevated utilization from the prevailing clients who’re operating optical genome mapping routinely. Gross sales of circulate cells within the second quarter of 2024 relative to Q2 2023 had been flat.
And so, we imagine this return to development we’re seeing on this quarter is a crucial signal that our give attention to rising utilization inside this present put in base is working. Happening to the following slide, a number of the key highlights in different areas of the enterprise embody publications that continue to grow. With 83 publications within the third quarter, the overall publications grew by 12% in comparison with the identical interval in 2023. The full variety of scientific analysis topics lined in publications 12 months to this point has grown by 82% from the identical interval in 2023.
We imagine publications within the general essential mass of printed knowledge to be a mirrored image of not solely the continuing growth and utilization of optical genome mapping, however doubtlessly a number one indicator for will increase in adoption and utilization going ahead as international acceptance will increase based mostly on the proof sources within the scientific literature. Our scientific research program is concentrated on advancing our trial and hematological malignancies and supporting persevering with publication and presentation of information. The applications are being led by key websites that participated within the creation of the trials and permits them to proceed with out as a lot of a price burden on Bionano. In actual fact, associated to the heme trial, in a preliminary readout from the arm of this trial wanting on the affect and well being financial — the choice affect and well being financial affect of OGM versus conventional strategies, Dr.
Michael Phillips from Harvard Medical College introduced some interim outcomes on the Most cancers Genomics Consortium assembly in St. Louis final August. The information confirmed in these outcomes that optical genome mapping detected pathogenic findings in 42% of circumstances that had been in any other case unfavourable once they had been evaluated by the present commonplace of care testing. And OGM outcomes yielded a turnaround time of simply 4 days at a decrease value in comparison with karyotyping alone and clearly decrease than the usual mixture of karyotyping and FISH.
Initiatives in help of reimbursement of optical genome mapping by insurance coverage corporations and different third-party payers are progressing. As we beforehand reported, a class 1 CPT code was established by the American Medical Affiliation in June of this 12 months with the descriptor of cytogenomic genomewide evaluation for hematologic malignancies to judge structural variations and replica quantity variations utilizing optical genome mapping. Now, newly established codes are despatched yearly from the AMA to the Middle for Medicare and Medicaid Providers, or CMS, for pricing and itemizing on the scientific lab charge schedule for the next 12 months. Preliminary costs for brand spanking new codes had been printed September twenty fifth, 2024, and we count on the ultimate pricing to be established by the top of November or early December this 12 months.
Which implies that starting in January of 2025, labs will have the ability to use — to invoice for his or her use of optical genome mapping utilizing this new code, which is 81195. Now, we now have continued to ship business manufacturing items of the Stratys system, and we’re persevering with to see good demand for Stratis system in our focus geographies of Europe, U.S., Canada, and Israel. Clients are working by means of the variations between Saphyr and Stratys. And we’re studying the best way to help the Stratys system successfully, which is the best way it really works when a very new instrument, consumable and computational system enters the market.
Regardless that our business shift locations much less of an emphasis on rising the put in base, we’re centered on increasing utilization amongst routine customers with greater pattern quantity, and clients acknowledge that Stratys addresses their greater throughput wants. Relating to key monetary metrics, the third quarter 2024 GAAP working expense was $35.5 million and non-GAAP working expense was $16.1 million, which replicate decreases of 69% and 49%, respectively, from the third quarter of 2023. Working money burn within the quarter was roughly $14 million, a 46% discount in comparison with the roughly $26 million within the prior 12 months and a 33% discount in comparison with the roughly $21 million within the second quarter of 2024. These outcomes are actually essential as they replicate the success of our ongoing efforts to scale back bills and money burn.
We count on working expense to scale back additional into 2025 on account of actions taken in September of 2024. Our money and money equivalents and available-for-sale securities as of September thirtieth, 2024, had been $23.4 million, of which $11.4 million was topic to sure restrictions. Now, GAAP gross margin for the third quarter was really unfavourable 139% in comparison with 30% in the course of the third quarter of 2023. And non-GAAP gross margin was 26% in comparison with 32% in the identical quarter final 12 months.
This huge unfavourable GAAP gross margin was pushed by $9.8 million in one-time prices which can be flowing by means of value of products offered and associated to the truth that we now have shifted our focus away from driving programs into the sphere, and we, due to this fact, not worth the spare elements and different stock objects that we had beforehand in stock on the similar stage. We have additionally taken prices for some rented programs within the area that stay put in however haven’t stored up with their dedicated reagent buy ranges. So each GAAP and non-GAAP margin had been impacted by additionally a $500,000 write-off in revenues associated to aged receivables from scientific companies. On the following slide, we summarize a number of the financing exercise within the third quarter and subsequently we now have accomplished two registered direct choices and raised capital with our ATM.
In July, we accomplished a registered direct providing with upfront gross proceeds to the corporate of $10 million and a concurrent placement of scientific milestone linked Sequence A and Sequence B warrants. The warrants have potential further gross proceeds of as much as $20 million upon the money train at an train value of $0.57 per share. The Sequence A and Sequence B warrants are topic to stockholder approval, and we can be convening a particular assembly of stockholders on November 27, 2024, in reference to the warrants. In October, we raised $3 million in gross proceeds in one other registered direct providing, this one with Sequence C and Sequence D warrants that might add a further $6 million in gross proceeds upon train — at an train value of $0.30 per share.
The October warrants are additionally topic to shareholder approval. Transferring on to the following slide, and waiting for the fourth quarter and the rest of the 12 months, our focus may be very clear. We’re driving the adoption of VIA software program for evaluation of optical genome mapping throughout routine use websites as we imagine adoption and utilization of VIA permits clients to develop utilization and due to this fact buy extra consumables. We’re leveraging this current buyer base and put in base to extend utilization and, importantly, add new assays to their menu, so further purposes of optical genome mapping past what they’ve initially been operating.
We’re sustaining our give attention to driving the initiatives for optical genome mapping reimbursement. We talked in regards to the CPT code, which was established and pricing is underway, however we now have additionally sought protection determinations from Medicare administrative contractors corresponding to MolDX. And we’re working to enhance the gross margin profile by lowering the price of items offered, and our efforts to extend pattern pull-through may also enhance gross margin. With regard to steerage for the fourth quarter and full 12 months, we count on This fall revenues to be within the vary of $6 million to $7 million.
We count on the OGM put in base to succeed in 370 to 380 programs. And our full 12 months revenues based mostly on the This fall steerage would then be within the vary of $28 million to $30 million. We perceive that we could also be seeing slower development within the adoption and growth of OGM on account of these expense reductions, however we imagine that money preservation and reaching profitability are extra essential targets than development at any value. So, in closing, our outcomes this quarter replicate enhancing momentum for optical genome mapping utilization with the expansion in circulate cells offered, regardless of general revenues, which have are available a bit of bit lighter than anticipated.
Our disciplined method to lowering working bills and money burn has been difficult, but it surely’s essential to protect the worth of optical genome mapping that is being delivered to labs all over the world and impacting their shoppers who they’re utilizing it for. I am very happy with our workforce’s willpower, grit, and perseverance as we put together for these new alternatives and challenges sooner or later. And with that, operator, please open up the road for questions.
Questions & Solutions:
Operator
[Operator instructions] And the primary query can be coming from Sung Ji Nam of Scotiabank. Your line is open.
Sung Ji Nam — Analyst
Hello. Thanks for taking the questions. Erik, I am sorry if I missed it, however did you guys replace on the standing of the Ionic pattern prep system? Is that also slated for launch later this 12 months? I am simply type of curious type of what the early suggestions is.
Robert Erik Holmlin — President, Chief Govt Officer, and Director
We did not replace — I did not particularly replace. And, you recognize, we have seen wonderful knowledge. In actual fact, at ASHG earlier this month, a number of the beta customers gave talks in regards to the progress. , we do not count on the rollout, like, the complete business rollout but this 12 months and would anticipate that being into subsequent 12 months.
However nonetheless, this system is progressing and demand is excessive for that system.
Sung Ji Nam — Analyst
Received it. After which, simply to see — nice to see the goal accounts, there’s vital room for development there. May you perhaps speak about type of what is the development potential for that — you recognize, for the 150 clients that you’re focusing on may very well be? And in addition, curious, these are — I believe you talked about they’re greater quantity customers traditionally talking. And curious, type of at what capability they’re at the moment operating, do you count on extra of the expansion to come back from further instrument placements or by means of simply continued improve in utilization? In case you might simply present extra coloration there.
Robert Erik Holmlin — President, Chief Govt Officer, and Director
Yeah, certain. So, the 150, and this can be a, you recognize, tough estimate, however that quantity contains, I believe, two teams, teams that are already in routine use and what we’d name a well-established or perhaps a mature consumer. Mature implies that they are not nonetheless rising and that — I do not need to suggest that right here. Nevertheless it consists of customers which can be, you recognize, accustomed to the system up and operating, totally skilled and operating on a routine foundation.
And it features a group of customers which can be stepping into that path, working laborious to validate an assay, an preliminary assay, and ramping up for, you recognize, reside manufacturing scale use. And so, that is roughly 150 in whole. And what I need to say directionally is that this group accounts for the overwhelming majority of the consumables which can be bought, most likely 80 or so % of, you recognize, consumables revenues. And so, whereas we do not escape their particular, like, income per system per se, I believe, you recognize, you possibly can type of join the dots there and, you recognize, 80% of what we have reported throughout this roughly 150 programs.
Now, it is nonetheless fairly skewed between these which can be operating routinely and nonetheless these which can be getting there, however I believe that is the place they’re at at the moment. And, you recognize, we see the numerous potential for them to develop as a result of virtually each lab — not each single one, however virtually each lab that is counted within the 150 is operating one single indication. There are a handful which have run — which have validated a number of, however that is the minority, you recognize, definitely lower than 25. And in order they add further indications, their consumables want will develop and due to this fact consumables purchases and revenues will develop.
Usually, not at all times, however usually they choose their highest quantity indication first and go for that. And so, I believe that as they add further indications, you recognize, revenues will develop, but it surely’s not like they will double in a single day. However there’s the potential for, you recognize, consumable revenues to develop considerably. And I believe on common, you will see labs operating most likely two to a few to 4 indications.
We have now definitely anecdotal examples of that. And it is going to be a mixture of hematological malignancies and constitutional genetic illnesses.
Sung Ji Nam — Analyst
Received it. That is tremendous useful. After which, simply lastly for me, simply in your COGS, are there nonetheless massive levers you can pull there from manufacturing effectivity facet of issues? Or is it largely type of overhead absorption from right here on out, simply from the quantity development? Thanks.
Robert Erik Holmlin — President, Chief Govt Officer, and Director
Yeah, certain. No, it is each. So, there are value reductions that we will understand by transitioning within the foundries that we work with to provide a number of the essential parts of the chip consumable. And so, these can be decrease value suppliers.
There’s a quantity element to that, however these can be decrease value suppliers general, in order that’ll simply cut back the supplies value. Numerous the, you recognize, discount in headcount is mixed with a consolidation of amenities and so forth. So, there are going to be some discount in overhead prices that aren’t essentially variable or quantity based mostly. After which, in fact, there would be the variable element in order that overhead that continues to be can be unfold over increasingly items.
And so, I believe we now have numerous components in play in reference to the discount of the price of items offered. And so, we see quite a lot of room for margin to enhance. And these are initiatives we have been engaged on for some time by way of like foundries and stuff like that. So, we count on them to take maintain within the close to future.
Sung Ji Nam — Analyst
Nice. Recognize it.
Robert Erik Holmlin — President, Chief Govt Officer, and Director
Thanks, Sung Ji.
Operator
Thanks. And one second for the following query. Our subsequent query can be coming from the road of Jeff Cohen of — I am sorry, Ladenburg Thalmann. Your line is open.
Future Hance — Ladenburg Thalmann and Firm — Analyst
Hello. Thanks for taking our questions. That is Future on for Jeff. I needed to shortly begin with only a couple P&L associated questions.
I am curious, that is type of a two-parter. I am curious to know what you see the expansion charge for the consumables being shifting into 2025. And do you suppose it may very well be better than usually anticipated that you’re anticipating based mostly on the truth that CPT code will come into impact. So you will type of have all that — what is the phrase I am searching for? You may have all that momentum out of your gross sales pressure specializing in that, in addition to the CPT code.
So, I assume, how are you taking a look at consumable development going ahead?
Robert Erik Holmlin — President, Chief Govt Officer, and Director
So, you recognize, I’ll communicate simply usually about what is cheap to count on, and I need to fall in need of giving any particular steerage, however there are a few components that will drive an acceleration in development. Primary is the CPT code and different initiatives associated to reimbursement, which might allow clients who’re at the moment operating samples however utilizing a distinct methodology to change with no unfavourable financial affect of their lab, proper? So the reimbursement initiatives throughout the board, whether or not that is within the U.S. the place CPT code and protection determinations come into impact or outdoors the US the place there are different initiatives that play a task. Reimbursement will assist labs transition away from the usual of care and use optical genome mapping in additional first line.
That is primary. Quantity two is one thing that I discussed in response to a query that Sung Ji requested, and that’s actually throughout the breakdown of this universe of routine utilizing clients, a lot of them are formidable about their plans for routine use however haven’t really crossed over into that threshold. So, there’s nothing unsuitable and that is the norm. That is the form of commonplace trajectory that they undertake, proper? So, they convey the system in, the system will get put in, they get skilled, they start to form of discover its scope and limitations after which they decide about what — how they will use it.
And so, there are fairly a lot of programs which can be in that stage and as they progress by means of and grow to be routine customers, then they may begin shopping for consumables at a better charge. So, it is actually about current put in programs switching over from onboarding to routine use and changing into type of what we name a mature web site. And so, that will trigger consumables development. And, you recognize, these issues are going to be our focus going ahead.
The opposite lever is one thing which is probably a bit of bit extra delicate. It is linked to this concept of menu growth, but it surely’s actually as increasingly customers undertake the VIA software program for optical genome mapping, that streamlines their workflow and successfully will increase their capability and permits them to run extra samples. And so menu growth, VIA adoption, these are massive, you recognize, components that may drive utilization consumables income. And so, you recognize, once we take a look at our plan, our plan is for these consumables to proceed to develop and speed up in development sooner or later.
Future Hance — Ladenburg Thalmann and Firm — Analyst
OK, bought it. Thanks for that element. I admire it. And I assume final one for me.
I will take the remainder offline. I do know you talked about some delays — delays that impacted your prime line this quarter. Is that one thing that was only a timing problem and will probably be mirrored in This fall? And is it baked into that steerage? Or is that one of many issues that perhaps pushed off a bit of bit longer?
Robert Erik Holmlin — President, Chief Govt Officer, and Director
Properly, so, you recognize, definitely the dynamic is factored into every little thing that we’re guiding for the fourth quarter. It is one thing that’s simply associated to the gross sales cycle for capital tools and, particularly, capital purchases. So, you recognize, you have been marching together with us for some time and I am certain you do not forget that we now have type of two go-to-market fashions for brand spanking new adoption. One is to promote labs — the system and the opposite is for them to hire it.
And the delays that I spoke about are delays in system purchases. And so, what we discovered was, you recognize, that some key clients had underestimated themselves the time that was going to be required for them to efficiently get these purchases authorised, and so that is what triggered the delay. All of these processes stay ongoing. And, you recognize, we see them being accomplished within the close to future and we’re hopeful that a few of them would occur on this fourth quarter, however we’re being conservative about the truth that they might take longer.
Future Hance — Ladenburg Thalmann and Firm — Analyst
OK, bought it. So undoubtedly seems like a timing factor. I lied. I’ve yet another query, if I could.
I am questioning when you have any plans to provoke further research however extra in like a partnership vogue with one other firm and a bigger participant? What are your ideas on that?
Robert Erik Holmlin — President, Chief Govt Officer, and Director
Properly, I believe what Alka Chaubey, the chief medical officer, and her workforce have finished with our scientific research program is, you recognize, we now have — recruited actually stellar investigators to signal on and be part of the research. And systematically now, you recognize, we now have labored with sure amongst these principal investigators for them to take over the trials and continued to advance them. However in every of them, as we now have reported during the last a number of quarters, we reached our enrollment objectives. So, enrollment has been accomplished.
Numerous knowledge assortment has been accomplished and we’re in an evaluation part. And so, we’re remaining lively, the websites are remaining lively. And so, these trials will proceed. I do not need anyone to suppose that they’re going to be paused on account of our value reductions.
By handing the management over to people for whom it is not their sole job, you possibly can think about that that, you recognize, might trigger issues to maneuver a bit of bit extra slowly, however we’d count on them to proceed and generate publications and essential knowledge that can be useful in ongoing issues like persevering with the reimbursement, advocacy, after which down the street, getting optical genome mapping to be included in medical society tips and so forth. So, the trials will proceed. Publications will proceed. With regard to type of the center of your query about partnerships, we’re in partnership with these establishments.
And so, that is a automobile. And we do interact with and talk about potential partnerships with totally different corporations and different teams. That is not one thing that we now have a dedicated program in per se proper now. We have now a lot of business relationships with, you recognize, totally different corporations.
And so, these are drivers of revenues for us, may very well be one thing that will end in a trial. And we stay opportunistic, however there is no definitive plans for that now.
Future Hance — Ladenburg Thalmann and Firm — Analyst
OK. Thanks for taking our questions.
Robert Erik Holmlin — President, Chief Govt Officer, and Director
Thanks, Future.
Operator
[Operator instructions] Our subsequent query is coming from Mark Massaro of BTIG. Your line is open.
Mark Massaro — Analyst
Hey, guys. Thanks for taking the questions. So, I assume, Erik, you positioned 5 programs or web placements in Q3. I believe the midpoint of your steerage for This fall is seven.
I acknowledge you’ve modified your technique of focusing in your current put in base. However, you recognize, that is 5 to seven quantity is down materially from the 20 that you just used to report in prior years. So, I simply — I am curious in regards to the 5 and the seven. Do you suppose that these are affordable — I am not asking for 2025 steerage, however do you suppose someplace in that 5 vary 1 / 4 is a good place for us to consider 2025?
Robert Erik Holmlin — President, Chief Govt Officer, and Director
Sure.
Mark Massaro — Analyst
OK.
Robert Erik Holmlin — President, Chief Govt Officer, and Director
You wanted lengthy solutions, however that is the brief reply. Sure.
Mark Massaro — Analyst
That is OK. That is useful. After which, as a follow-up to that, is there any method to give us a way for the way the launch of Stratys goes? I am undecided in case you’re capable of disclose what number of you positioned of the 5 in Q3 or what number of you have positioned 12 months to this point, however you additionally talked about how a number of the people that could be trying to convert over are attempting to grasp the way it matches or the way it works. So, perhaps are you able to speak about issues like ease of use or simply — I additionally, in fact, acknowledge it is greater throughput.
Are some labs simply type of evaluating in the event that they want that stage of throughput to justify the acquisition? Or are there different components which can be going into how we will take into consideration the rollout of the Stratys?
Robert Erik Holmlin — President, Chief Govt Officer, and Director
Sure, so, you recognize, the rollout goes nicely. Let me communicate in regards to the demand facet of it. It is vital And I believe part of that’s that labs need, acknowledge the necessity for the upper throughput. However, labs additionally need to make the most of a number of the different workflow benefits that Stratys has, considered one of which is, like, you recognize, we name it bounce the queue so you would have a random entry and introduce a stat pattern, and it may very well be processed with out ready for the batch to complete.
So, these are some options that Stratys has that Saphyr does not, and so these are additionally engaging to labs. However I believe general the demand and curiosity in Stratys is said to the upper throughput as a result of labs see optical genome mapping as changing into really commonplace. Once we take a look at one thing like, you recognize, evaluation of FSHD, facioscapulohumeral dystrophy, which is a constitutional genetic dysfunction, that’s the international commonplace. Optical genome mapping is the worldwide commonplace in evaluation for that individual software.
And so, you recognize, there’s undoubtedly an rising understanding that optical genome mapping goes to grow to be commonplace, and so individuals are looking for to undertake Stratys due to the upper throughput. With regard to your query in regards to the portions, we do not break that out but. However, you recognize, it is vital numbers. I imply, in comparison with the early days of Saphyr going out, I imply, we have well-eclipsed whole annual — preliminary annual output of or uptake of Saphyr.
So, you recognize, it is significant and vital. Now, once we speak in regards to the Stratys system getting adopted and carried out at lab websites, I assume we now have type of like two camps, one which is totally new to Stratys. They do not have a Saphyr after which labs which have Saphyr. So labs which have Saphyr, what they should do, particularly in the event that they’re routine customers, is de facto do a cross comparability to judge Stratys and convey it on web site, and that’s one thing that they are working by means of.
So, after I say that they are wanting on the similarities and variations between Saphyr and Stratys, it is actually that side-by-side comparability. And there are similarities and variations, little question. And so, we see that as being a element of the general validation. Additionally, I believe 11 programs throughout 10 websites had been early entry programs, pre-commercial programs, and people programs, you recognize, have had some {hardware} parts changed as we have transitioned into the complete business launch.
And so, there’s undoubtedly a strategy of working by means of the novelty and novelty of the instrument. And one factor I’ll point out about Stratys is that it is a fully model new consumable, which we imagine over time goes to actually enhance the general utilization and workflow. It is a element of the upper throughput, but it surely’s new the best way that clients use it, the best way that they load their pattern onto it. It is new to us as nicely, and so there’s a studying curve in reference to that consumable.
So, we’re within the early days of Stratys. It is going nicely, demand is excessive, and individuals are coming to it for the proper causes, the upper throughput and the general advantages within the workflow.
Mark Massaro — Analyst
OK, that is useful. After which I needed to ask in regards to the steerage — the discount of the steerage right here once more. Possibly are you able to stroll me by means of a number of the parts. I perceive that in case you place fewer programs, there can be fewer, much less capital tools income realized within the quarter, if that is smart.
I simply needed to ask in regards to the different line objects and the opposite product classes. In Q3, you had actually strong 27% development in circulate cells. I am simply curious how we should always take into consideration the remainder of the enterprise. And as we take into consideration 2025, are you assured you can, you recognize, generate development in circulate cells and consumables?
Robert Erik Holmlin — President, Chief Govt Officer, and Director
So, yeah, let’s form of stroll by means of the stuff beginning with the consumables. I imply, I believe, we have had a great observe document of consumables development, the form of flatness that we noticed within the second quarter was anomalous. The return to development, 27%, is strong. What we’re optimistic about and what we do really feel assured about is that consumables utilization and due to this fact revenues will proceed to develop.
I believe we have got to be cautious about quantifying that development too exactly. A driver of development of circulate cells offered in previous quarters has been a number of the new purchases. So, when any individual buys a brand new system or rents a brand new system, they get consumables with it up entrance. And so, as we decrease the variety of new programs which can be going out, that contribution can be decrease.
And so, we have got to watch out about it. And so, will the expansion and utilization among the many current set up base make up for that? That might be the query. However we stay assured that OGM consumables revenues will proceed to develop, and that is actually a principal income development driver into 2025. Once we speak about, you recognize, what’s shifting round with steerage, it is actually adjusting to the change in go-to-market, but in addition digesting this discontinuation of those scientific companies merchandise.
So, we had a few $500,000 write-down related to aged receivables. They’re tied to these discontinued companies merchandise, they usually stay about, I’d say, $500,000 or so in receivables on the books. And so, we’ll should see how these are handled in a number of the future quarters. And so, there’s the potential of further write-downs.
I need to type of provide you with some consciousness of that. We have tried to issue that into steerage. So, there’s some ambiguity there. We simply should work by means of it as we begin to work by means of the fourth quarter outcomes.
However form of digesting that, discontinuation has been having its affect on the highest line, maybe, in some surprising methods. After which, sure, the shift away from capital tools gross sales, that has an affect on revenues. Having mentioned that, these new devices, until we’re promoting them to labs which can be extremely strategic and going to make use of at a very excessive charge, or labs which have reached the capability of their Saphyr system and due to this fact needed Stratys, however are in any other case consultants in OGM. Like, these are the purchasers that we need to give attention to now importantly.
But when we’re promoting them to any lab that simply desires to purchase OGM, that seems to be very costly for us and a bit of bit counterproductive. So, the highest line might undergo on account of that, however money out the door goes down. We’re hopeful that consumables’ revenues goes up and that may drive greater margins. So, will probably be higher enterprise for Bionano going ahead.
Mark Massaro — Analyst
OK. That is all very useful. Thanks.
Operator
Thanks. And that does conclude at present’s Q&A session. I wish to flip the decision again over to Erik Holmlin for closing remarks. Please go forward.
Robert Erik Holmlin — President, Chief Govt Officer, and Director
Nice. Thanks, Lisa, and thanks to all people who joined the decision at present. And we look ahead to updating you on our future progress. Thanks very a lot.
Operator
Thanks all for becoming a member of at present’s convention name. [Operator signoff]
Period: 0 minutes
Name individuals:
David Holmes — Investor Relations
Robert Erik Holmlin — President, Chief Govt Officer, and Director
Sung Ji Nam — Analyst
Erik Holmlin — President, Chief Govt Officer, and Director
Future Hance — Ladenburg Thalmann and Firm — Analyst
Mark Massaro — Analyst
