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GenMark Diagnostics Q3 Revenues Rise 32 Percent Driven by ePlex Sales Growth

NEW YORK – GenMark Diagnostics reported after the close of the market Wednesday that its third quarter revenues rose 32 percent year over year, driven by growth in ePlex molecular diagnostic analyzer placements.

For the three months ended Sept. 30, the firm reported revenues of $20.9 million, up from $15.8 million a year ago, and edging the consensus Wall Street estimate of $20.4 million.

Carlsbad, California-based GenMark reported Q3 product revenue of $20.8 million, up 32 percent year over year from $15.7 million. Its license and other revenue was $96,000 compared to $82,000 in the prior-year quarter.

"Our recently launched Blood Culture ID panels … are significantly bolstering our competitive position," GenMark President and CEO Hany Massarany said in a statement.

GenMark said that Q3 revenue for its ePlex system was $13.4 million and represented 64 percent of total revenue. ePlex revenue grew 98 percent compared to the prior year period, and the firm placed 51 net new ePlex analyzers, expanding the global installed base to 489 placements.

The firm said that its ePlex installed base grew 57 percent compared to the prior year period. In Q3, it obtained a Proprietary Laboratory Analysis reimbursement code for the ePlex Respiratory Pathogen Panel.

Massarany said on a conference call to discuss the financial results that the firm is reaching more customers as a result of the launch of its US Food and Drug Administration-cleared BCID panels. The panels enable the firm to not only "place additional ePlex systems in new accounts, but also to work with existing placements, and going back to the installed base to add BCID to the [RP] menu being utilized," he said.

After a long product development cycle, GenMark received 510(k) clearance for its ePlex instrument and Respiratory Pathogen Panel in June 2017. The FDA cleared the third of three BCID panels, a gram-negative panel, in April of this year.

BCID has contributed to greater than 70 percent of year-to-date ePlex placements, Massarany said, adding that the firm has "done well across the board," achieving "competitive wins in smaller and bigger labs, in hospital and reference labs." 

He noted that late last year and earlier this year, certain Medicare administrative contractors issued local coverage determinations that restricted coverage of large respiratory testing panels to certain patients, most commonly in outpatient settings. A Proprietary Laboratory Analysis code recently assigned to ePlex received a preliminary recommendation by the Centers for Medicare and Medicaid Services to crosswalk the code to the existing CPT code for respiratory panel testing, Massarany said.

GenMark, as a result, is "optimistic" that the code will be reimbursed for the upcoming flu season, ensuring access for Medicare and Medicaid patients in the relevant geographic markets, he added.

The firm's Q3 net loss was $11.7 million, or $.20 per share, compared to a net loss of $11.0 million, or $.20 per share a year earlier, slightly short of analysts' average estimate for a loss of $.19 per share.

GenMark's Q3 R&D costs rose 3 percent to $6.3 million from $6.1 million, and its SG&A costs rose 10 percent to $11.1 million from $10.1 million.

GenMark ended the quarter with $24.3 million in cash and cash equivalents and $8.9 million in short-term marketable securities.

The company continues to expect total revenues for 2019 to range from $85 million to $90 million. It also continues to anticipate placing 170 to 190 net new ePlex analyzers this year, each with an annuity per analyzer of $135,000 to $145,000.

Prior to the release of the financial results, analysts on average were expecting $87.9 million for the year.

In afternoon trading on the Nasdaq Thursday, GenMark shares were up almost 2 percent to $5.93.