NEW YORK – GenMark Diagnostics reported after the close of the market on Monday that its fourth quarter revenues rose 40 percent year over year, in line with preliminary Q4 revenues reported in January.
For the three months ended Dec. 31, 2019, the company reported revenues of $27.2 million, up from $19.4 million in Q4 2018 but missing analysts' consensus estimate of $27.4 million.
Product revenues grew 40 percent year over year to $27.1 million from $19.3 million, while license and other revenues more than doubled to $118,000 from $53,000.
Revenues from GenMark's ePlex molecular diagnostics platform were $19.2 million, up 58 percent year over year. The Carlsbad, California-based firm placed 38 net new ePlex analyzers during Q4, bringing its total installed base at the end of 2019 to 527.
The company reported an approximate average annuity per ePlex analyzer of $148,000 in Q4, compared to $139,000 in the comparable period of 2018. More than 70 percent of placements in the fourth quarter were within labs that previously had a competitive analyzer, the firm said.
GenMark also announced it shipped initial research-use-only test kits designed to detect the SARS-CoV-2 virus to several key sites in the US with access to clinical samples and to the company's Hong Kong distributor.
"2019 was a turning point for our company," Scott Mendel, the company's new interim President and CEO, said in a statement. "From the [US Food and Drug Administration] clearance and launch of our suite of blood culture identification panels to our significant improvement in gross margin, our team delivered meaningful results through teamwork and clearly defined goals."
On a conference to discuss GenMark's financial results, Mendel said that in the fourth quarter, demand for its ePlex respiratory pathogen panel was in line with the company's expectations for a moderate flu season. However, the firm's installed base for ePlex in the quarter was 10 analyzers less than expected, mainly because a single customer, undergoing a change of management, decided not to proceed to implementation.
Total ePlex analyzer placements in Q4 was primarily driven by customer interest in GenMark's BCID panels, he said. However, the timeframe for implementation has been trending longer than the three-to six-month timeframe the firm had anticipated.
"With additional experience and focus, we are confident that we can improve the implementation process," Mendel said. "To put into perspective why we are highlighting implementation timeframes, our current funnel of customer implementations is expected to generate approximately $15 million in annualized revenue when they are all in routine clinical use."
Among the firm's future priorities is the development of a gastrointestinal panel that it plans to submit in 2021 for marketing clearance to the US Food and Drug Administration, Mendel said.
The company's Q4 net loss narrowed to $10.3 million, or $.17 per share, from a net loss of $11.6 million, or $.21 per share, in Q4 2018, missing analysts' average estimate for a net loss of $.16 per share.
GenMark reported that its Q4 R&D expenses rose 15 percent to $6.8 million from $5.9 million. Its SG&A expenses grew 11 percent to $11.1 million from $10 million.
For full-year 2019, GenMark reported that total revenues rose 24 percent to $88 million from $70.8 million in 2018, missing the consensus Wall Street estimate of $88.1 million.
Product revenues increased 24 percent to $87.5 million from $70.5 million, and license and other revenues rose 91 percent to $530,000 from $278,000.
Total ePlex revenues for 2019 was $60.3 million, an increase of 59 percent year over year.
The firm's net loss for the year narrowed to $47.4 million, or $.82 per share, from a net loss of $50.5 million, or $.91 per share, in 2018, but missed the analysts' average estimate for a net loss per share of $.81 for the year.
The company's 2018 R&D expenses fell 3 percent to $27.1 million from $27.9 million in the year-ago period. Its SG&A expenses for the year rose 10 percent to $43.3 million from $39.3 million in 2018.
GenMark ended the year with cash and cash equivalents of $44.4 million and short-term marketable securities of $9.1 million.
For full-year 2020, GenMark expects revenues in the range of $100 million to $110 million, which would represent growth of 14 percent to 25 percent, updated from 20 percent to 25 percent that was previously communicated. ePlex revenues are expected to increase by more than 30 percent in 2020 and represent approximately 70 percent to 80 percent of total 2020 revenue. In 2020, global ePlex placements are expected to range from 130 to 160 net new analyzers with annuity per analyzer expected to be between $130,000 and $135,000. The firm's CFO Johnny Ek said that the average annuity for full-year 2019 was $132,000 per ePlex placement.
Within the US, ePlex analyzer placements have been generating almost six times the annuity of placements outside the country. As a result, GenMark is carefully analyzing annuity per analyzer outside the US to identify the most profitable opportunities, Mendel said.