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GenMark's Q4 Revenues Spike 157 Percent

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – GenMark Diagnostics said after the close of the market on Thursday that its fourth-quarter revenues more than doubled year over year, led by a 156 percent spike in reagent sales.

For the three months ended Dec. 31, 2010, the Carlsbad, Calif.-based firm posted $787,482 in revenues, up 157 percent from $306,410 a year ago and above a Wall Street forecast of $690,000.

Product revenues comprised the bulk of total revenues with $773,409, a 157 percent increase from $281,410 during the fourth quarter of 2009, though license and other revenues slipped to $14,073 from $25,000, a 44 percent drop.

Reagent revenues spiked 156 percent year over year to $721,000. Instrument and other revenues grew 165 percent, the company said.

For the fourth quarter, GenMark increased its R&D spending to $1.7 million from $1.2 million, a 42 percent increase. Its SG&A costs declined 29 percent to $2.5 million from $3.5 million a year ago.

GenMark's net loss for the quarter was $3.5 million, or $.30 per share, beating analyst estimates of a loss of $.52 per share. During the year-ago period, GenMark had a loss of $5.6million, or $1.07 per share.

For full-year 2010, GenMark reported revenues of $2.5 million, a 150 percent increase from $998,416 in 2009, and beating analyst estimates of $2.4 million. Product revenues rose 153 percent to $2.3 million from $910,527 a year ago, and license and other revenues nearly doubled to $163,872 from $87,889.

Its reagent sales rose to $2 million during the year, a 121 percent improvement from $910,000 a year ago, and instrument and other revenues jumped 460 percent year over year to $493,000, the company said.

GenMark's R&D spending was $6.5 million, a 16 percent increase from $5.6 million in 2009, and its SG&A costs inched up a fraction of 1 percent to $11.6 million in 2010 from $11.5 million in 2009.

The company posted a net loss of $18.4 million, or $1.88 per share for 2010, an 8 percent improvement from a loss of nearly $20 million, or $4.41 per share, in 2009. Wall Street had a consensus estimate loss of $2.21 per share for 2010.

As of Dec. 31, the company had $18.3 million in cash and cash equivalents.

In a conference call following the release of its earnings, Christopher Gleeson, GenMark's chairman and interim CEO, said that the firm's search for a permanent CEO as well as a chief financial officer was progressing and the board was in the final stages of its selection process. The searches are expected to be finished by the end of March, he said.

Gleeson also provided an update on the company's test menu development. The firm's three existing tests cleared by the US Food and Drug Administration — for cystic fibrosis, thrombophilia, and warfarin sensitivity — were performing well in customers' hands, "and as you can see from the sales results, both new customers are adopting our system and test menu, and existing customers are experiencing great utilization," he said.

GenMark's aspirate respiratory panel for the detection of 21 different upper respiratory viruses was released late in the fourth quarter and customer feedback has been "very encouraging," Gleeson said. A clinical trial for FDA clearance was begun in January, and the company expects to file its submission with the agency in May, in time to have the test available for the 2012 flu season, he added.

GenMark also is in discussions with FDA for the proper regulatory pathway for its 2C19 test for clopidogrel (Plavix) dosing and expects resolution on the issue sometime during the second quarter, Gleeson said.

Lastly, he reported "good progress" in the company's development of a test for detecting the major mutations in the KRAS gene. "When fully developed we expect our product to have clear differentiation in content and workflow when compared to other products available today," he said, adding that the FDA has told the firm that the test will need pre-market approval, rather than 510(k) clearance.

In November, Genmark announced it had licensed Innogenetics' hepatitis C virus (HCV) genotyping patent estate for the United States. A test based on the technology is on track for launch early in the third quarter, Gleeson said, adding the firm is "confident that it will be a significant contributor to our revenues in the second half of 2011 and beyond."

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