NEW YORK – GenMark Diagnostics reported after the close of the market on Monday a 23 percent increase in second quarter revenues, driven by strong placements of its ePlex analyzer.
Separately, the company said in a filing with the US Securities and Exchange Commission that it has entered into an equity distribution agreement with Canaccord Genuity relating to shares of the diagnostic firm's common stock. Under the terms of the agreement, GenMark may offer and sell shares of its common stock having an aggregate value of up to $35 million at an offering price of $6.03 per share.
The Carlsbad, California-based molecular diagnostics firms reported $18.4 million in revenues, up from 14.9 million in Q2 of 2018 and beating the consensus analyst estimate of $17.9 million.
"I believe that the combination of our ePlex platform, its differentiated test menu and broad market adoption, together with the continued strong execution of our commercial teams, signal a very exciting inflection point in our business with a long runway for future growth," said Hany Massarany, GenMark's president and CEO, in a statement.
The firm booked ePlex revenues of $12 million for the quarter, representing 66 percent of total revenues and 70 percent growth over the prior-year quarter.
"With the recent launch of our suite of FDA-cleared BCID panels, we are more confident than ever that we can continue to build on this momentum to drive future growth," Massarany said during a conference call to discuss the financial results.
The company placed 45 net new ePlex analyzers during the quarter, increasing its global installed base to 438 placements, a growth of 64 percent compared to a year ago.
Massarany noted that those placements were driven by the expanded test menu for the ePlex, which now includes three FDA-approved blood culture ID (BCID) panels as well as a respiratory pathogen panel.
"Along with driving future system placements, we expect this expanded menu to begin increasing testing volumes and corresponding revenue in the second half of the year," he said. By the end of the year, GenMark expects 20 to 30 percent of the installed ePlex base to use both the RP and the BCID panels, he later added.
In addition, GenMark is working on new syndromic panels for gastrointestinal and central nervous system infections, he said, but didn't provide a timeline yet.
So far, the company hasn't seen any impact from competitors that have recently entered the market, Massarany said.
While the US continues to account for the majority of sales, and will continue to do so in the foreseeable future, distribution partners in Europe, the Middle East, and North Africa delivered "solid results" in the quarter and the firm looks forward to opportunities in Southeast Asia and Latin America, he said.
R&D costs for the quarter decreased 26 percent to 7.7 million from $10.5 million in Q2 of last year, largely due to reduced development expenses related to the completion of ePlex BCID clinical studies. SG&A expenses increased 10 percent to $10.7 million from $9.7 million a year ago, driven by increased investment in the commercial function to support the BCID launch.
The company's net loss for the quarter narrowed to $13.3 million or $.23 per share, from $16.5 million or $.30 per share during the same quarter last year, missing analysts' average estimate of a loss of $.21 per share.
GenMark ended the quarter with $23.7 million in cash and cash equivalents and $17.6 million in short-term marketable securities.
The company continues to expect total revenues for 2019 to range from $85 million to $90 million. It also still anticipates placing 170 to 190 net new ePlex analyzers this year, each with an annuity per analyzer of $135,000 to $145,000.
GenMark's stock was up 17.3 percent in morning trading on the Nasdaq, at $6.73 per share.