Similar to the other idea I put up, BNGO operates in the life science tools market. They produce a product used by researchers in order to put together genomes from shorter lengths. This results in lower costs genomes vs other tech like that of PACB, though at a somewhat lower accuracy. The primary uses of this sort of stuff has been in research up until now with pretty low addressable markets. BNGO itself has minimal revenues.
That said, BNGO popped ~30x from Dec. - Feb., largely due to interest from retail investors, and potentially from increased interest in long read type technologies because of a partnership between PACB and NVTA, and a large investment in PACB by Softbank. The increased interest relates to NVTA’s clinical whole genome offering, for diagnosis of rare conditions, which are generally better diagnosed via long read technologies than the predominant short read style that’s the vast majority of sequencing. Short reads are less expensive (you may be looking at a handful of genes vs. sequencing an entire genome), so while sequencing a whole genome with short reads may cost ~$600, it may cost a few times that with a more accurate long read type of tech. But because you’d only be looking for maybe a couple genes, you don’t generally sequence very much. Rare conditions are often spread across more of the genome.
All this isn’t to say anything specific about BNGO, except that it operates in similar markets, and some investors presumably think they’re gonna be able to benefit from the recent interest in PACB’s type of technology.
My view is that BNGO is likely not very different than it was in Dec on a valuation standpoint. It raised $200M, so I’d add the ~$150M market cap to that to come to a valuation of ~$350M. Through a short, that represents ~80% upside from current valuation levels. I’d suspect much of this playing out over the coming several months just as a result of cooling of interest. That said, this technology could benefit from a similar deal or partnership as PACB, or some other dynamic, so I view it as a non-zero risk, particularly from a volatility standpoint.