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Investing in Rapidly Growing Autism Therapy Market (NASDAQ: BNGO) (OTC US: ISWH) (NASDAQ: ZYNE)

While it doesn’t get a lot of press, the Autism market is unfortunately a rapidly growing market opportunity.

According to recent data from the CDC, roughly 2% of all kids are now diagnosed with Autism Spectrum Disorder (ASD). That number is up from 0.1% just two decades ago. This staggering rise has led to a surge in investment to address the condition, and a new legislative tailwind, with most states now mandating that insurance providers cover treatments and therapy practices to address ASD. This is backed by Medicaid and Medicare as well.

These new subsidies are driving more parents to enlist in treatments and therapies, sparking a strong wave of growth in new investments.

One report last year from research publisher Marketdata valued American autism services at $1.87 billion in 2017, with an expected jump to $2.23 billion in 2022, though the report stressed that numbers may be conservative and not reflective of increased insurance coverage. Another report released in May by Market Research Future estimated that the global ASD treatment market will be worth almost $7.27 billion by 2023.

With that in mind, we take a look at some of the current leaders among stocks addressing the Autism market opportunity, including: Bionano Genomics Inc (NASDAQ:BNGO), ISW Holdings Ord Shs (OTCMKTS:ISWH), and Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE).

 

Bionano Genomics Inc (NASDAQ:BNGO) is a core Autism play. The company trumpets itself as a genome analysis company providing tools and services based on its Saphyr system to scientists and clinicians conducting genetic research and patient testing, and providing diagnostic testing for those with autism spectrum disorder (ASD) and other neurodevelopmental disabilities through its Lineagen business.

Bionano’s Saphyr system is a platform for ultra-sensitive and ultra-specific structural variation detection that enables researchers and clinicians to accelerate the search for new diagnostics and therapeutic targets and to streamline the study of changes in chromosomes, which is known as cytogenetics. The Saphyr system is comprised of an instrument, chip consumables, reagents and a suite of data analysis tools, and genome analysis services to provide access to data generated by the Saphyr system for researchers who prefer not to adopt the Saphyr system in their labs. Lineagen has been providing genetic testing services to families and their healthcare providers for over nine years and has performed over 65,000 tests for those with neurodevelopmental concerns.

Bionano Genomics Inc (NASDAQ:BNGO) recently announced that Praxis Genomics, LLC received DEX Z-codes from Palmetto MolDX for its entire testing menu of laboratory developed tests (LDTs) based on Saphyr. The DEX Z-Code modifier is a unique 5-character alpha-numeric code associated with certain molecular diagnostics tests and is typically used by certain payers as an adjunct to non-specific CPT codes when no specific CPT code applies.

According to the release, the code, submitted on a claim along with a particular CPT code provides greater clarity to help payers and physicians understand which test is being ordered, performed and billed. The process removes the need for the provider to submit large amounts of additional information with every claim and can expedite claim payment. The assignment of DEX Z-codes to Praxis’s menu of Saphyr-based LDTs is potentially a major step forward in the coding and eventual coverage of Saphyr-based tests.

The stock has suffered a bit of late, with shares of BNGO taking a hit in recent action, down about -10% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -33%. However, the stock is also up over 1,000% since late December and has consistently been one of the most dramatic momentum favorites among traders this year.

Bionano Genomics Inc (NASDAQ:BNGO) pulled in sales of $2.2M in its last reported quarterly financials, representing top line growth of -33.7%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($18.9M against $24.8M, respectively).

 

ISW Holdings Inc (OTCMKTS:ISWH) is an interesting diversified holdings name with exposure to cryptocurrency and telehealth. The company books telehealth revenues through a joint venture with its partner, Paradigm Home Health. It recently announced a revised and renegotiated agreement that stands to boost its telehealth and home healthcare sales by up to 40%.

More importantly for our analysis today, the company also noted that it is in negotiations to potentially acquire an autism therapy telehealth solution, and that it is definitely interested in investing in the space.

ISW Holdings Inc (OTCMKTS:ISWH) announcement came as part of a release ostensibly about its renegotiation, but the news represents a statement about the strong opportunity it sees in the autism space, especially for a telehealth solution

“Autism is diagnosed more than cancer, diabetes, and HIV combined, but there are very few therapeutic solutions available to underserved communities,” commented Alonzo Pierce, President and Chairman of ISW Holdings. “An autism therapy solution could serve as an excellent market opportunity and a chance to drive shareholder value while making a positive contribution to members of our surrounding communities, and we hope to have further details on something in this direction soon.”

According to the release, the autism services market is estimated to generate sales over $7 billion annually by 2023. Growth is being generated by increasing legislative supports and mandated insurance coverage, along with increased trajectories for both diagnostic frequency and costs associated with treatments in the space.

ISW Holdings Inc (OTCMKTS:ISWH) has demonstrated strong growth, with seven consecutive quarters of sharp sequential growth. As noted above, its most recent quarter put the company on an annual run-rate to pull in more than $1.5 million in revenues, which doesn’t count its strong ramp in crypto mining operations or its new renegotiated telehealth partnership.

 

Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE) frames itself as the leader in innovative pharmaceutically-produced transdermal cannabinoid therapies for rare and near-rare neuropsychiatric disorders, including development underway for treatment options targeting the Autism market.

The company is committed to improving the lives of patients and their families living with severe, chronic health conditions including Fragile X syndrome, autism spectrum disorder, 22q11.2 deletion syndrome, and a heterogeneous group of rare and ultra-rare epilepsies known as developmental and epileptic encephalopathies.

Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE) most recently reported financial results for the fourth quarter and full year ended December 31, 2020, and provided an overview of recent operational highlights and a pipeline update, including a note that Zynerba intends to discuss data supporting the potential efficacy of Zygel in Autism Spectrum Disorders with the FDA in 1H 2021, including the results of the Phase 2 BRIGHT trial in children and adolescents with moderate to severe ASD, to determine the regulatory path forward.

“We expect to make significant progress in 2021 on all four indications for which we are developing Zygel, including initiating a pivotal trial in patients with Fragile X syndrome who have a highly methylated FMR1 gene to confirm the positive results in this population of responders in the CONNECT-FX trial,” said Armando Anido, Chairman and Chief Executive Officer of Zynerba. “Screening in the INSPIRE trial of patients with 22q11.2 deletion syndrome has resumed now that COVID-19 restrictions in Australia have begun to ease. Once enrollment is complete we will update our expectation on when we will see topline results for this trial.”

And the stock has been acting well over recent days, up something like 2% in that time.

Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE) had no reported sales in its last quarterly financial data. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($59.2M against $13.9M).

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