NEW YORK (GenomeWeb) – GenMark Diagnostics reported after the close of the market on Tuesday that its fourth quarter revenues rose 7 percent year over year, in line with preliminary Q4 revenues reported in January.
For the three months ended Dec. 31, the company reported revenues of $16.0 million, up from $14.9 million in Q4 2016, and beating the analysts' consensus estimate of $15.6 million for the quarter.
GenMark CEO Hany Massarany said in a statement that in 2017, the firm implemented "several significant product launches that are fundamental to the continued growth and success of our business."
During the year, GenMark launched its US Food and Drug Administration-cleared ePlex system and respiratory pathogen panel in the US ahead of the current severe flu season, and it introduced its ePlex line of CE-marked blood-culture ID sepsis panels in Europe.
Massarany also noted that the company recently launched its ePlex NP system, designed to address low test-volume sites and decentralized near-patient settings.
The firm said that it placed 49 ePlex analyzers in Q4 and exited 2017 with an installed base of 196 ePlex analyzers in US and European labs. Its installed base of XT-8 analyzers remained relatively stable at 620 instruments in US labs in 2017.
On a conference call following the release of the financial results, Massarany said that in 2018 he expects the firm will place 140 to 170 ePlex analyzers at an annuity per placement in the range of $100,000 to $120,000. The number was below Wall Street analysts' expectations, principally because of actions that the firm is taking to place under-utilized instruments in Europe in new sites that can more readily deploy them for routine clinical testing.
"We expect system placements in Europe to temporarily slow down, particularly in the first half of 2018," Massarany said. "We continue to believe that the European market will emerge as an important driver of the company's growth over the longer term."
He noted that in the US, the firm expects that it will launch three ePlex BCID multiplex panels later this year, with a broad range of pathogen and drug resistance markers designed to help diagnose and manage bloodstream infections that can lead to sepsis. "We recently announced the initiation of the first of three clinical studies and continue to expect submission to the FDA of all three panels during the second and third quarters of this year, and clearance by year-end subject to the FDA's review timeline," Massarany said.
The company's Q4 net loss widened to $14.5 million from $12.7 million in Q4 2016. On a per-share basis, however, GenMark's net loss narrowed to $.26 on 54.9 million shares outstanding from a loss of $.27 per share a year ago on 46.5 million shares outstanding. Analysts had expected a net loss of $.26 per share for the quarter.
GenMark reported that its Q4 R&D expenses fell 31 percent to $8.5 million from $12.4 million. Its SG&A expenses rose 24 percent to $10.3 million from $8.3 million.
For full-year 2017, GenMark reported that total revenues rose 6 percent to $52.5 million from $49.3 million in 2016, beating the consensus Wall Street estimate of $52.2 million.
The firm's net loss for the year widened to $61.9 million, or $1.21 per share, from $50.6 million, or $1.15 per share, in 2016. Analysts, on average, expected a net loss of $1.21 for the year.
The company's 2017 R&D expenses fell 14 percent to $42.8 million from $49.5 million in the year-ago period. SG&A expenses for the year rose 26 percent to $36.8 million from $29.1 million in 2016.
GenMark ended the year with cash and cash equivalents of $26.8 million, and short-term marketable securities of $45.2 million.
For full-year 2018, the company anticipates revenues of $68 million to $72 million. Wall Street analysts, on average, are expecting 2018 revenues of $69.5 million for the firm.
In a note to investors on Wednesday, Canaccord Genuity analyst Mark Massaro said that GenMark placed "a respectable 49 ePlex analyzers during Q4/17." However, the company indicated the 2018 net quarterly run-rate will be lower given the repositioning of systems in Europe, he said, adding that about 70 percent of US ePlex placements in Q4 were new to the firm.
The investment bank reduced its fiscal 2018 revenue estimate for GenMark to $68 million from $70 million, its fiscal 2019 revenue estimate to $88 million from $95 million, and its fiscal 2020 revenue estimates to $106.7 million from $115 million.
GenMark's shares were down 13 percent to $4.22 in Wednesday morning trading on the Nasdaq.