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GenMark Diagnostics' Q4 Revenues Rise 34 Percent

NEW YORK (GenomeWeb) – GenMark Diagnostics reported today after the close of the market that its fourth quarter revenues rose 34 percent year over year.

For the three months ended Dec. 31, 2015, the company reported revenues of $13.2 million compared to $9.8 million in Q4 2014, beating analysts' consensus estimate of $12.3 million for the quarter. Product sales accounted for almost all of the revenue in the quarter, and the company said it placed 17 additional XT-8 analyzers in end-user laboratories for a total of 633 analyzers in the US market.

The company's Q4 net loss was nearly flat year over year at $8.8 million, or $.21 per share, compared to a loss of $8.6 million, or $.21 per share, a year ago. The company beat analysts' consensus estimate for a net loss of $.27 per share for the quarter.

On a call with analysts, CEO Hany Massarany said he was happy with the "excellent results" his team delivered in 2015, "despite the light flu season."

The company reported that its R&D expenses rose 20 percent to $10.2 million from $8.5 million, while its SG&A expenses rose 11 percent to $6.8 million from $6.1 million. 

For full-year 2015, GenMark reported total revenues rose 29 percent to $39.4 million from $30.6 million in 2014, beating the consensus Wall Street estimate of $38.5 million.

The firm's net loss for the year widened to $42.2 million, or $1.00 per share, from $38.3 million, or $.93 per share, the year before. Analysts, on average, had expected a net loss of $1.06 for the year.

The company's SG&A expenses rose to $28.2 million from $24.7 million in 2014, and its R&D expenses rose to $37.5 million from $31.8 million in the year-ago period.

GenMark ended the year with cash and cash equivalents of $35.4 million, and marketable securities of $10.1 million.

For full-year 2016, the company said it expects revenue in the range of $47 million to $51 million and gross margin in the range of 53 percent to 55 percent.  On the call, GenMark CFO Scott Mendel told analysts that the revenue profile in 2016 will reflect the continuing impact of a light flu season in the first quarter.

The company also said today that it plans to continue growing its XT-8 business in 2016, though it will shift some of its focus to the expected launch of the ePlex in Europe in the coming quarter, and in the US sometime in 2017. Most of the expected revenue in 2016 will come from the XT-8, and the ePlex will contribute "modestly," Massarany said.

He also added that there would be a small expansion of XT-8 systems in 2016 in the US, but declined to provide guidance on how many placements the company expects to make in the coming year. Massarany noted that GenMark would report on the ePlex's performance regularly, and would evaluate whether guidance on system placement would be useful to investors.

"We've demonstrated with thousands of ePlex cartridges across multiple manufacturing lots that we are capable of achieving the required level of product performance and scale to support the European launch, and we're confident that we will soon be able to successfully accomplish this important milestone," Massarany said in a statement and reiterated on the call. However, he also added that the company will likely need more time after the first quarter of 2016 to "address some remaining sources of manufacturing variability, which have become more evident with the recent doubling of manufacturing volume."

On the call, Massarany added that he's pleased with the ePlex's "superior quality," and that the company expects to initiate US IVD studies shortly after the European launch. GenMark also expects to launch the ePlex in the US in 2017, and plans to release additional assays for the system at the rate of several per year.

Mendel added that the company expects to report the majority of ePlex revenue in the fourth quarter of 2016, and cautioned analysts that although there won't be a large change in R&D expenses for the year, they should expect an increase in sales and marketing expenses related to the ePlex launch.