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GenMark Q4 Revenues Grow 51 Percent

NEW YORK (GenomeWeb) – GenMark Diagnostics said after the close of the market on Tuesday that revenues for its fourth quarter rose 51 percent year over year. 

The Carlsbad, Calif.-based company posted revenues of $9.8 million for the three months ended Dec. 31, 2014, up from $6.5 million in the year-ago quarter, beating the consensus Wall Street estimate of $9.1 million. During the recently completed quarter, GenMark placed 38 XT-8 analyzers in end-user laboratories for a total installed base of 540 instruments in the US as of the end of 2014. 

The results matched what GenMark preliminarily reported last month. 

On a conference call after the release of the GenMark's financial results, President and CEO Hany Massarany said that US Food and Drug Administration-cleared respiratory virus test and research-use only HCV genotyping test continued to be the main drivers of XT-8 placements and revenue growth in Q4 2014. 

The company had a net loss of $8.6 million, or $.21 per share, in Q4 2014, compared to a net loss of $10.6 million, or $.26 per share, in Q4 2013, beating the average analysts' estimate of a loss of $.28 per share. 

Its R&D spending in the quarter was up 19 percent year over year to $8.5 million from $6.3 million, while its SG&A costs dropped 13 percent to $6.1 million from $7 million. 

For full-year 2014, GenMark recorded revenues of $30.6 million, up 12 percent year over year from $27.4 million in 2013 and beating the average analysts' estimate of $29.9 million. 

Its net loss for the year totaled $38.3 million, or $.93 per share, compared to a net loss of $33.6 million, or $.95 per share, in 2013. On average, Wall Street had estimated a loss of $1 per share. 

The company's R&D spending increased 44 percent year over year to $31.8 million from $22.1 million, while its SG&A costs were flat at $24.7 million. 

GenMark exited 2014 with $36.9 million in cash and cash equivalents. 

It said that for full year 2015, revenues are projected to be in the range of $38 million to $40 million. It anticipates placing about 50 XT-8 analyzers in the first half of the year. 

On the call, Massarany also provided an update on the company's next-generation platform called ePlex. Formerly called NexGen, it integrates automated nucleic acid extraction and amplification with the firm's eSensor detection technology. It is designed to enable technicians using the ePlex system to place a raw, or a minimally prepared patient sample, directly into a test cartridge and obtain results without any additional steps. 

The firm previously said that it had completed the development stage of ePlex at the end of 2014 and expected to launch the system in Europe shortly thereafter. Massarany said on Tuesday's call that the instrument will launch in Europe in the middle of the year, while in the US GenMark anticipates submitting a 510(k) application to the FDA in the second half of this year and launching it in the first half of 2016. 

During the firm's third quarter conference call, GenMark had said that ePlex was anticipated to launch in the US in the second half of 2015. 

The company is developing seven assays for the instrument: gram-positive and gram-negative bacterial identification panels; a respiratory panel; a gastrointestinal panel; an HCV genotyping panel; a central nervous system infection panel; and a fungal infection panel. 

Massarany said that the lead panels for ePlex will be the bacterial identification assays and the respiratory assay. Both will be launched with the ePlex system or shortly afterward. 

GenMark CFO Scott Mendel said that during 2015 GenMark expects to conduct clinical trials for most of the seven panels, and added that the company has begun building out its European sales team. Massarany added that at the end of 2014, the company had approximately 30 sales people, and that during the next 12 months, that figure will double. Longer term, he expects about 50 sales people in the US and about half that number in Europe. 

"2015 will be a transitional year for our company as we continue to grow and support our XT-8 business while shifting more of our focus toward ePlex," Massarany said. "With the completion of the development phase of ePlex, our team is now preparing to execute the relevant analytical and clinical studies which must be completed prior to launching the system."

In early trading on Wednesday morning GenMark's shares were down 2 percent at $12.98 on the Nasdaq.

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