NEW YORK – GenMark Diagnostics reported after the close of the market on Wednesday that its third quarter revenues increased 104 percent year over year, driven in part by ePlex Respiratory Pathogen Panel 2 (RP2) sales.
For the three months ended Sept. 30, the firm reported revenues of $42.6 million, up from $20.9 million a year ago, beating the consensus Wall Street estimate of $39.3 million and in line with preliminary Q3 revenues announced earlier this month
Carlsbad, California-based GenMark reported Q3 product revenue of $42 million, up 103 percent year over year from $20.7 million. Its other revenues were $661,000 compared to $259,000 in the prior-year quarter.
In the quarter, GenMark "delivered meaningful progress on each of the strategic objectives established at the outset of this year, including another quarter of strong revenue growth, cash flow positivity, and further menu development," Scott Mendel, GenMark's president and CEO, said in a statement. "I am especially encouraged by the significant number of customers that have transitioned to ePlex RP2, which enables comprehensive diagnosis for effective patient management. These transitions are important because they include multiyear contracts that increase our highly predictable revenue stream."
On a conference call to discuss GenMark's financial results, Mendel said that about 50 percent of its ePlex placements this year have been to customers that are new to syndromic testing.
"It's something we didn't expect," he said. "And I think that is driven by the awareness of the diagnostic tools that are out there, including syndromic tools. The pandemic certainly helped encourage some of those folks to … get across the finish line."
Due to shifting resources because of the pandemic, GenMark's development timeline for a gastrointestinal panel on ePlex has been delayed by six to nine months, Mendel said, adding, "We have recently increased the size of our assay development team to leverage … increasing capacity, with a focus on completing [gastrointestinal panel] development as well as other panels."
The company is also ramping up manufacturing capacity to meet demand that continues to outstrip its supply of ePlex products during the pandemic. GenMark is adding three new manufacturing lines to three it already has. Production is expected to begin on a fourth manufacturing line late in the fourth quarter.
The firm exited the first quarter of this year at a production rate of about 100,000 consumable units per month, Mendel said. With a fifth manufacturing line, it anticipates reaching about 200,000 units per month in the first quarter of 2021, and afterwards 250,000 units per month leveraging a sixth manufacturing line.
In Q3, the firm booked ePlex revenues of $38.0 million, an increase of 187 percent over the third quarter of 2019. The average annuity per analyzer was $193,000, up 82 percent year over year.
GenMark said that in the third quarter, it placed 70 net ePlex analyzers and concluded the quarter with a global installed base of more than 720 analyzers, an increase of 47 percent over the third quarter of 2019.
Its ePlex Respiratory Pathogen Panel 2 (RP2), a rapid-result multiplex panel that identifies 21 respiratory pathogens including SARS-CoV-2, received US Food and Drug Administration Emergency Use Authorization during the quarter. The company said RP2 drove the majority of the placements and revenues in Q3.
The firm's Q3 net loss narrowed to $3.2 million, or $.05 per share, compared to a net loss of $11.7 million, or $.20 per share a year earlier, beating analysts' average estimate for a loss of $.06 per share.
GenMark's Q3 R&D costs rose 19 percent year over year to $7.5 million from $6.3 million, and its SG&A costs fell 6 percent to $10.4 million from $11.1 million.
GenMark ended the quarter with $57.8 million in cash and cash equivalents and $79.5 million in short-term marketable securities.
GenMark increased its total revenue guidance for full-year 2020 to a range of $165 million to $168 million, compared to the previously stated range of $155 million to $165 million.
The company expects to achieve the top end of both its global ePlex placement guidance of 230 to 250 net new analyzers and annuity per analyzer of $175,000 to $200,000.
"While COVID-19-related testing provided significant tailwinds [year to date] and is likely to provide significant tailwinds into next year, we continue to believe the pandemic has been a major impetus for [GenMark's] accelerated penetration into the addressable market of sample-to-answer syndromic testing in acute care settings," Sung Ji Nam, a BTIG research analyst, wrote in a research note on Thursday.
In Thursday morning trading on the Nasdaq, GenMark shares were down about 3 percent to $11.23.