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GenMark Diagnostics' Q4 Revenues Rise 13 Percent

NEW YORK (GenomeWeb) – GenMark Diagnostics reported after the close of the market on Tuesday that its fourth quarter revenues rose 13 percent year over year.

For the three months ended Dec. 31, the company reported revenues of $14.9 million, up from $13.2 million in Q4 2015, and slightly above analysts' consensus estimate of $14.8 million for the quarter.

On a conference call with analysts following the release of the earnings, GenMark CEO Hany Massarany said that the firm achieved CE-marking for the ePlex sample-to-answer system and its respiratory pathogen panel in June, and commenced a controlled launch of ePlex in Europe in late 2016.

He noted that GenMark also completed its 510(k) submissions to the US Food and Drug Administration in December 2016, and that clearance is expected soon.

"Our 2016 ePlex commercialization efforts have been highly effective, and we're very pleased with the customer commitments that we've obtained," he said, adding that the firm finished 2016 with more than 55 customer agreements for more than 85 ePlex instruments, and has installed several instruments at customer sites.

Massarany said that he expects 2017 will be a pivotal year, as GenMark plans to launch ePlex in the US and drive "its continued adoption and business success in the European and US markets." He added that based on the results of multiple internal and external studies with several thousand samples, the firm is very pleased with the performance of all three ePlex Blood Culture ID panels, which it expects to launch in Europe during the second quarter and submit to the FDA later this year.

The company's Q4 net loss widened to $12.7 million, or $.27 per share, from $8.8 million, or $.21 per share, in Q4 2015. Analysts had expected a net loss of $.27 per share for the quarter.

The company reported that its R&D expenses for the quarter rose 22 percent to $12.4   million from $10.2 million, driven by continued development of ePlex assays. Its SG&A expenses also rose 22 percent to $8.3 million from $6.8 million. 

For full-year 2016, GenMark reported that total revenues rose 25 percent to $49.3 million from $39.4 million in 2015, matching the consensus Wall Street estimate.

The firm's net loss for the year widened to $50.6 million, or $1.15 per share, from $42.2 million, or $1.00 per share, in 2015. Analysts, on average, had also expected a net loss of $1.15 for the year.

The company's R&D expenses rose 32 percent to $49.5 million from $37.5 million in the year-ago period, which GenMark again attributed to further development of ePlex assays. SG&A expenses for the year rose 3 percent to $29.1 million from $28.2 million in 2015.

GenMark ended the year with cash and cash equivalents of $16.0 million, and marketable securities of $25.6 million.

For full-year 2017, the company said it expects revenues of $65 million to $70 million. Analysts are expecting revenues of $67.5 million for the year.

On the call, Massarany noted that GenMark commenced production of components of the ePlex cartridge in a new manufacturing facility last year.

"We are on track to completed the installation and validation of an additional manufacturing line and extra automation which should more than double our production capacity by the middle of the year," he added.

In a note to investors on Wednesday, Raymond James analyst Nicholas Jansen wrote that the investment bank believes GenMark is positioned to "nearly double the company's revenue over the next two-plus years," given that ePlex has been approved.

He also noted that Raymond James' research at industry conferences supports the expectation of a healthy launch trajectory "amidst significant pent-up demand and potential share gain in an expanding market opportunity."

GenMark's shares were up more than 4 percent to $11.79 in Wednesday morning trading on the Nasdaq.