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GenMark Reports Preliminary Q4 Revenue Jump of 150 Percent

NEW YORK (GenomeWeb News) – GenMark Diagnostics today reported preliminary revenue growth of 150 percent year over year for the fourth quarter, driven by an uptick in the number of systems in the field, as well as growth in its test menu, and a "significant" increase in the number of tests sold.

The company said that it will release its full financial statements for the quarter and for full-year 2011 by March 15, after completing its independent audit. The audit includes GenMark's first Sarbanes-Oxley audit of internal controls, it said.

For the three months ended Dec. 31, 2011, the Carlsbad, Calif.-based molecular diagnostics firm said that revenues rose to $2 million, compared to $805,000 in Q4 2010. In addition to systems and test revenue growth, it said that reagent revenues increased to $1.8 million from $695,000.

Instruments and other revenues more than doubled year over year to $224,000 from $110,000 primarily due to capital sales of instruments. GenMark placed 26 net analyzers in the quarter, and now has an installed base of 167 instruments, all in end-user laboratories in the US market.

Gross profit for the quarter is anticipated to be between 17 percent and 20 percent of sales, compared to a gross loss of $800,000 and negative-100 percent in the year-ago period, the firm said. The improvements resulted from an increase in volume, which allowed for the absorption of fixed manufacturing overhead costs.

Also, previously disclosed manufacturing inefficiencies were resolved, resulting in "significantly better and sustained yield," and capital sales of several depreciated instruments improved the gross margin mix.

For the full-year, revenues increased 92 percent to $5 million from $2.6 million in 2010. GenMark placed 85 net analyzers in 2011, and reagent annuity per analyzer increased to $50,000 from $30,000.

The company ended 2011 with cash and short-term investments of $30.3 million. For 2012, it said it anticipates revenues to more than double from 2011 levels to more than $10 million, with most of it backloaded to the second half of 2012, due to the seasonality of the flu season. GenMark added that it expects to place more than 100 analyzers in laboratories during the year.

During a conference call following the release of its preliminary financial results, President and CEO Hany Massarany said that the firm expects to launch a new Hepatitis C virus test in the third quarter as a research-use-only test, which will provide more comprehensive subtyping than its current HCV test on the market.

He also reiterated that GenMark will launch a KRAS test for colorectal cancer later in the year as an RUO test. As he has stated previously, the company does not plan on investing in a clinical study with clinical outcomes but would instead perform an equivalent study when an in vitro diagnostic product by another firm hits the market.

In December, the company submitted a 510(k) application to the US Food and Drug Administration for its respiratory viral panel and expects clearance of the test later this year, it said.

GenMark said it anticipates starting a clinical trial for its 2C19 genotyping test for identifying appropriate patients for the anticoagulant Plavix (clopidogrel) during the back half of 2012 in preparation of an FDA submission "soon thereafter," Massarany said.

Lastly, the company is developing a next-generation eSensor sample-to-answer-platform and that is expected to launch in late 2013.

In early Friday trade on the Nasdaq, shares of GenMark were up 1 percent at $4.08.

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