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Reagents Sales Propel GenMark's Q3 Revenues up 162 Percent

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – GenMark Diagnostics reported after the close of the market on Thursday a 162 percent increase in revenues for the third quarter

Revenues for the three months ended Sept. 30 totaled $667,410, compared to $255,138 a year ago, exceeding Wall Street revenue expectations of $530,000.

Reagents sales rose 164 percent to $581,000 and instruments and other product revenues increased to $72,000 from none a year ago. Product revenues tallied $653,035, up from $220,138. Licensing and other revenues totaled $14,375, down from $35,000, the company said.

For the third quarter, GenMark's net loss narrowed to $4.9 million, $0.42 per share, from $5.7 million, or $1.13, a year ago. Consensus analyst estimates were for a loss of $0.50 per share.

The firm's R&D spending inched up to $1.7 million for the quarter from $1.6 million in the year-ago period. Its SG&A costs declined to $2.7 million from $3.6 million a year ago.

The Carlsbad, Calif., molecular diagnostics outfit has three assays that have been cleared by the US Food and Drug Administration for cystic fibrosis, warfarin sensitivity, and thrombophilia risk.

In a conference call following the release of the earnings, Chris Gleeson, chairman and CEO of GenMark, said that the cystic fibrosis and thrombophilia tests were "the main assay [revenue] drivers" in the third quarter. Sales of the warfarin assay continued "at a steady pace" but didn't see "a lot of growth," he said.

Gleeson added that GenMark is progressing on an assay under development for 2C19 for clopidogrel (Plavix) dosing. The firm's respiratory viral panel for the detection of 21 different upper respiratory viruses is expected to become available this quarter and will undergo a clinical trial in December, he said, and an assay for the detection of major mutations of the KRAS gene is also progressing.

On the instruments front, the company is in the early stage of development of its eSensor next-generation sample-to-answer system, and GenMark expects to sign a contract with a partner to co-develop the system in early 2011, with 2013 targeted for launch of the system.

In its second quarter earnings release, GenMark said that Gleeson had replaced Faiz Kayyem as CEO on an interim basis and would be hiring a permanent CEO. Today, Gleeson said that the board has narrowed its search to external candidates and is making "excellent progress." The company remains on track to finish its search by the end of the first quarter in 2011.

During the call, Steven Kemper, the company's CFO and treasurer, said that GenMark has been notified that it has been approved to receive a grant for about $1.64 million under the IRS' Qualifying Therapeutic Discovery Projects, which will be used to support seven of the company's development programs.

As of Sept. 30, GenMark had $24.1 million in cash and cash equivalents.

The firm's shares soared in early Friday trade on the Nasdaq, rising 15 percent to $4.50.

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