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GenMark Diagnostics Q1 Revenues Soar 65 Percent

NEW YORK (GenomeWeb) – GenMark Diagnostics reported after the close of the market on Tuesday that its first quarter revenues rose 65 percent, driven in part by new placements of its ePlex analyzer in a flu season that generated strong testing demand.

For the three months ended March 31, the molecular diagnostics firm reported revenues of $20.6 million, up from $12.5 million a year ago, and exceeding the consensus Wall Street estimate of $17.1 million.

"We’re off to a solid start in 2018, with revenue growth in the first quarter driven by high respiratory testing volumes in an exceptionally strong flu season, as well as a growing number of customers utilizing ePlex for routine clinical testing," Hany Massarany, president and CEO of GenMark, said in a statement. "As a result, ePlex contributed meaningfully to first quarter sales and for the first time, surpassed revenues from our XT-8 products.”

He said that the firm is encouraged by the steady, positive customer feedback it is receiving on the performance, ease-of-use, and processing capacity of ePlex, and that the analyzer is receiving "strong market acceptance across all segments."

He added that the firm looks forward to accelerating future placements and revenue from its blood culture identification panels when they are launched in the US market.

On a conference call to discuss the company's financial results, Massarany noted that the firm "delivered the highest revenue quarter in GenMark’s history with strong performance across all segments."

He said that Europe is an important market for GenMark, but in the near-to-medium term, the US will drive most of its growth, especially as the firm brings "more menu to market in the not too distant future."

The firm remains on track with its submission to the US Food and Drug Administration for clearance of gram-positive and gram-negative panels in the second or third quarter of this year, Massarany said, adding, "We now expect to submit the fungal panel in the fourth quarter, a slight delay from previous expectations," which was due in part to the company's focus on delivering products to meet demand in Q1.

GenMark expects FDA clearance of two of the BCID panels by the end of this year and of the fungal panel in early 2019, he said.

The company is "making progress" on its ePlex multiplexed gastrointestinal pathogen panel with more than 30 reportable targets for which it intends to obtain regulatory clearance, he added.

GenMark said that at the end of the quarter it had placed 32 new ePlex analyzers with customers, expanding its global installed base to 228 placements.

The company's net loss narrowed to $11.4 million, or $.21 per share, from $13.9 million, or $.30 per share a year ago, besting the analysts' average estimate for a loss of $.22 per share.

GenMark's R&D costs dropped 51 percent to $5.4 million from $11.0 million in Q1 2017, and its SG&A costs rose 9 percent to $9.5 million from $8.7 million.

The firm ended the quarter with $30.3 million in cash and cash equivalents, and $35.2 million in marketable securities.

GenMark reconfirmed its prior 2018 revenue guidance of $68 million to $72 million. Analysts expect revenues of $69.9 million for the year. The company said that it continues to expect ePlex placements of between 140 and 170 net new analyzers, and an annuity per ePlex placement in the $100,000 to $120,000 range.

In a research note on Tuesday, Cowen analyst Doug Schenkel said that "the urgency for solid execution is high" for GenMark, but he expects the company to "execute relative to placement, menu expansion, and gross margin over the next six to 18 months, which should drive the stock higher." 

In early Wednesday trading on the Nasdaq, GenMark's shares were up more than 9 percent at $6.81.