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GenMark Posts 162 Percent Revenue Growth; Seeks New CEO

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – GenMark Diagnostics reported after the market closed Monday second-quarter revenue growth of 162 percent, and said that it is seeking a new CEO for the firm, which completed its first quarter since going public in the US.

The California-based molecular diagnostics firm, which formerly was based in the UK and known as Osmetech, brought in total revenues of $650,712 for the three months ended June 30, compared to $248,568 for the second quarter of 2009.

"Our first quarter as a Nasdaq listed company saw strong growth, particularly in reagent test revenues," Christopher Gleeson, chairman and CEO of GenMark, said in a statement. "In addition, placements of our XT-8 system exceeded our expectations and we are extremely pleased with the productivity of our new and still growing direct sales force."

GenMark currently has three FDA-cleared molecular diagnostic products for cystic fibrosis, warfarin sensitivity, and thrombophilia risk. The firm also is developing a respiratory viral panel, which the firm expects will detect 21 different upper respiratory viruses. Studies on that test will be conducted during the fourth quarter of this year, Jon Faiz Kayyem, the firm's chief scientific officer, said during a conference call following the release of the financial results.

The firm also today said that Gleeson assumed the role of CEO on an interim basis as it seeks a new CEO. Faiz Kayyem previously held that role, but will now serve as CSO, responsible for overseeing all activities associated with menu expansion and platform development.

"We have met with key regulatory officials and advisors, reviewed our test pipeline opportunities, and refined our strategy," Gleeson said during the call following the release of the financial results. "It's become clear to the board that we needed to bring in higher level and more qualified approach to our product development and scientific activities."

He said that the board believes that Faiz Kayyem, as inventor of the firm's technology and founder of the company — and also a board member, was best suited to head these efforts. Gleeson said that the search for the firm's new CEO could take up to 12 months.

GenMark posted a net loss of $5.1 million or $.60 per share, compared to a net loss of $4.3 million, or $1.08 per share, for the second quarter last year.

Its R&D expenses increased 21 percent to $1.7 million from $1.4 million, while its SG&A spending jumped 39 percent to $3.2 million from $2.3 million.

GenMark went public in the US at the end of May. The IPO and name change were part of plans Osmetech revealed in a prospectus with the US Securities and Exchange Commission in March to reorganize the firm. That plan also included moving the firm's headquarters from the UK to Pasadena, Calif.

GenMark finished the quarter with $29.6 million in cash and cash equivalents.

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