NEW YORK (360Dx) – GenMark Diagnostics said after the close of the market on Monday that its second quarter revenues increased 20 percent year over year, beating the consensus Wall Street estimate on the top line but missing the estimate on the bottom line.
For the three months ended June 30, GenMark posted $14.9 million, up from $12.4 million, and beating the analysts' average estimate of $14.5 million. Product revenues came in just below $14.9 million compared to $12.3 million a year ago, while license and other revenues increased to $74,000 from $68,000.
The firm placed 39 net new ePlex analyzers during Q2 2018, bringing the total installed base globally to 267 placements.
On a conference call following the release of the financial results, GenMark CEO Hany Massarany said that revenue growth was driven by ePlex system placements and demand for the company's respiratory pathogen test cartridges. He added that the majority of ePlex placements in Q2 2018 were in the US, the largest market for the company testing platforms and panels.
The company has a goal of ending 2018 with a US sales force of 30-something people, and "[a]s we stand now, we're only a handful of hires away from achieve this goal, and we are very pleased with the caliber of sales professionals that we've recruited so far," Massarany said.
Outside of the US, he said that GenMark continues to optimize its commercial approach and expand its distribution network. The addition of "several" new distributors in Q2 2018 enables the firm to better address key markets in Europe and access new geographic markets.
"We've also made good progress with the repositioning of underutilized ePlex analyzers to maximize annuity of our installed base in Europe," Massarany said.
Moving ahead, the planned rollout of three blood culture ID panels in the US remains a high priority, and GenMark recently submitted ePlex BCID Gram Positive to the US Food and Drug Administration for clearance.
The company expects to submit to the agency applications for FDA clearance of the ePlex BCID Gram Negative panel in the third quarter, and the ePlex Fungal Pathogen panel in the fourth quarter, Massarany said. He added that clinical testing for the gram-negative panel has recently been completed and Genmark "is busy preparing the FDA submission."
Meanwhile, the clinical study for the fungal pathogen panel has recently begun, slightly ahead of the company's internal expectations.
Massarany reiterated that GenMark expects FDA clearance for the gram-negative, gram-positive, and fungal pathogen panels to occur between the end of 2018 and early 2019.
Lastly, the company has "stepped up" its development of its gastrointestinal panel, although Massarany declined to provide a timeline for clinical studies to be performed for the test.
In Q2, GenMark's R&D costs were cut 19 percent year over year to $10.5 million from $13.0 million, while SG&A spending grew 5 percent to $9.7 million from $9.2 million.
The company's net loss narrowed to $16.5 million, or $.30 per share, for the recently completed quarter compared to a net loss of $18.0 million, or $.37 per share, a year ago. GenMark missed the consensus Wall Street estimate of a loss per share of $.22.
It finished the quarter with $28.9 million in cash and cash equivalents, and $26.4 million in short-term marketable securities.
The company reconfirmed its full-year 2018 revenue guidance of between $68 million and $72 million. It said that it continues to expect ePlex placements of between 140 and 170 net new analyzers for the year, with annuity per ePlex placement of between $100,000 and $120,000.
In mid-morning trading on the Nasdaq on Tuesday, GenMark's shares were up about 7 percent to $6.45.