NEW YORK (GenomeWeb) – GenMark Diagnostics reported after the close of the market on Tuesday that its revenues in the first quarter were down 29 percent year over year but the firm still beat the consensus analyst estimate on the top and bottom lines.
The company said that for the three months ended March 31, revenues totaled $7.9 million, compared to $11.1 million in the year-ago quarter, and easily surpassing the average analyst estimate of $6.4 million.
Product revenues were down to $7.9 million from $11.0 million, while license and other revenues slid to $47,000 from $133,000.
GenMark attributed the overall revenue decrease to the lack of purchases by Natural Molecular Testing Corporation, which was offset by "significant" growth in reagent and instrument revenues from other customers.
NMTC had been GenMark's largest customer, but last June it inked a multiyear collaboration and licensing agreement with Luminex, which led to GenMark ending its relationship with NMTC. As a result, GenMark recorded no NMTC revenues in the recently completed quarter. By comparison, in the year-ago period NMTC made up 61 percent of GenMark's total revenues, the Carlsbad, Calif.-based company said.
In late October, NMTC filed for Chapter 11 bankruptcy protection.
Excluding NMTC results from the year-ago figures, GenMark's base business was up 84 percent year over year, the company said. Reagent revenues were down 31 percent to $7.4 million from $10.8 million, but its base business reagent revenues increased 85 percent year over year.
On a conference call following the release of the company's financial results, GenMark President and CEO Hany Massarany added that annuity per XT-8 analyzer during Q1 2014 was $72,000, up from $64,000 in Q4 2013 for its base business and $62,000 in Q1 2013.
Instruments and other revenues improved 63 percent to $500,000 from $300,000, driven by sales of the XT-8 system, the company said. It placed 31 net new analyzers in the first quarter, bringing its total installed based to 444. GenMark has said that it anticipates it will expand its XT-8 installed base by 125 instruments in 2014 and reiterated that expectation on the conference call.
Massarany also provided an update on the development of GenMark's NexGen multiplex molecular sample-to-answer system and said that the company remains confident that it will complete development during the summer. The company anticipates launching the system in Europe later this year.
"Our R&D organization and partners are in the final stages of development and integration of the NexGen cartridge, instrument, and software and initial menu of assays," he said.
The NexGen menu of tests will initially focus on infectious diseases, and in addition to a respiratory panel and gram-negative and gram-positive sepsis panels, assays for the new system will include those for gastrointestinal infections, HPV genotyping, and CNS disorders. GenMark has also begun the design and development of an assay to detect and differentiate a "broad range of pathogens associated with invasive fungal infections in critically ill patients," Massarany said.
"Q1 was another quarter of strong performance for our company and we're very optimistic about the remainder of this year and beyond," Massarany said on the call. "Our North American commercial team has again delivered strong results, and boosted by our uniquely differentiated infectious disease panels, we believe we are poised to place more XT-8 systems and expand market share going forward.
"In addition, our sales force is laying the foundation for NexGen with multiple high-performing assays enabled by our … technology and at the same time building excellent customer relationships," Massarany said.
GenMark's net loss for the quarter was $8.8 million, or $.21 per share, compared to a net loss of $4.2 million, or $.13 per share, in Q1 2013. It beat the consensus analyst estimate of a loss of $.25 per share.
The firm pumped up its R&D spending 35 percent year over year to $7.3 million from $5.4 million. Its SG&A spending was up 18 percent to $5.8 million from $4.9 million.
GenMark finished the first quarter with $27.9 million in cash and cash equivalents and $69.8 million in investments.