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GenMark Diagnostics Plans to Expand Test Menu, Develop Automated Next-Gen System


By Justin Petrone

GenMark Diagnostics is planning to introduce a number of array-based tests in coming years and is working on an automated, next-generation instrument, according to a May 13 filing with the US Securities and Exchanges Commission.

The filing came days after the firm reported that its first-quarter sales nearly doubled over the prior year, driven by an increase in instrument placements.

The company said in the filing that it plans to debut "two to four new tests annually," and discussed plans to launch an assay to detect sensitivity to the anticoagulant clopidogrel (marketed by Bristol-Myers Squibb and Sanofi-Aventis as Plavix) and another for KRAS mutations predictive of response to the cancer therapies panitumumab and cetuximab (marketed by Amgen as Vectibix and Merck, ImClone, and BMS as Erbitux, respectively).

Additionally, GenMark said it is developing a next-generation platform, called the NexGen system, which will integrate DNA amplification with its eSensor detection technology. Upon launch, expected in the second half of 2013, customers will be able to place a "raw or minimally prepared patient sample into our test cartridge and obtain results without any additional steps," the firm said.

The NexGen system will be marketed to a "significantly expanded group of hospitals and reference laboratories," GenMark added.

Carlsbad, Calif.-based GenMark has already developed four tests for use with its existing eSensor XT-8 instrument. The system relies on the firm's electrochemical detection technology to detect nucleic acids on a microarray.

The US Food and Drug Administration has already cleared the XT-8 plus GenMark's Cystic Fibrosis Genotyping Test, which detects pre-conception risk of cystic fibrosis; its Warfarin Sensitivity Test, which determines an individual’s ability to metabolize the oral anticoagulant warfarin; and its Thrombophilia Risk Test, which detects increased risk of blood clots.

The company has also developed a Respiratory Viral Panel Test, which detects the presence of major respiratory viruses and is labeled for investigational use only.

In an earnings call held last week to discuss the firm's first-quarter results, GenMark Chairman Chris Gleeson said the company intends to submit a 510(k) application with FDA for its respiratory panel in time for clearance for the 2011 flu season.

He also said that the company remains in discussions with the agency for its 2C19 test for Plavix. GenMark believes a premarket approval submission will be required for the diagnostic and hopes to submit its PMA in the first half of 2012, Gleeson said.

Additionally, GenMark is planning to launch a test for hepatitis C in the summer. GenMark licensed Innogenetics' hepatitis C virus genotyping patent estate last year.

GenMark also believes a PMA submission will be needed for the KRAS test, but the company has delayed the final stage of development of the test until after the hepatitis C test is launched, Gleeson said. He added that the firm should be able to bring the test to market by year end.

New Digs, Higher Revenues

GenMark recently moved its headquarters from Pasadena, Calif., to Carlsbad, Calif., where it leased a new 31,098 square foot facility last year (BAN 8/10/2010).

Officials said the move had a negative effect on its first-quarter revenues. Specifically, CFO Paul Ross said in the call that "reagent revenues were hampered by the transfer of manufacturing to Carlsbad from our facility in Pasadena." The process of moving, plus the time it took for the firm to have its new facilities certified by the State of California, caused the firm to delay some orders. "During this time we weren't able to ship full order quantity of products to meet customer demand," he said.

Still, he said the moving costs were a one-time affair. "It has taken longer than expected to close down the Pasadena operations, but those operations have ceased as of Q2," Ross said. "Q3 will be first quarter of pure Carlsbad operations."

And despite the impact of the move, GenMark saw sales spike 91 percent during the quarter.

For the three months ended March 31, revenues rose to $764,403 from $399,264 a year ago, with product revenues of $692,739 making up the majority of revenues, representing an 80 percent increase from $384,249 during the first quarter of 2010.

Licensing and other revenues increased nearly five-fold to $71,664 from $15,015.

Ross said that reagent sales more than doubled to $621,000, compared to $290,000 a year ago, driven by sales to existing and new customers. New system placements during the quarter totaled 20, ahead of the 12 to 15 that the company had forecast, bringing the total installed base to 102, Gleeson said.

The firm's net loss for the quarter was $6.6 million, a 35 percent increase from a loss of $4.9 million during the first quarter of 2010. Ross attributed the loss to "higher than expected duplicative costs during the transition from Pasadena to Carlsbad, as well as costs related to the start up of Carlsbad manufacturing."

The firm's R&D spending rose to $2.5 million, up 67 percent from $1.5 million a year ago, while SG&A was flat at $3.2 million.

GenMark ended the first quarter with $17.1 million in cash and cash equivalents.

Have topics you'd like to see covered in BioArray News? Contact the editor at jpetrone [at] genomeweb [.] com.

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