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GenMark's Q1 Revenues Nearly Double

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – GenMark Diagnostics reported after the close of the market on Monday a 91 percent increase in first-quarter revenues year over year.

The Carlsbad, Calif.-based molecular diagnostics company, which went public a year ago, said that for the three months ended March 31, revenues rose to $764, 403 from $399,264 a year ago, with product revenues of $692,739 making up the majority of revenues, representing an 80 percent increase from $384,249 during the first quarter of 2010.

Analyst estimates were for $710,000 in revenues for the quarter.

Licensing and other revenues increased nearly five-fold to $71,664 from $15,015.

During a conference call after the release of the earnings, Paul Ross, GenMark's CFO since March, said that reagent sales more than doubled to $621,000, compared to $290,000 a year ago, driven by sales to existing and new customers. New system placements during the quarter totaled 20, ahead of the 12 to 15 that the company had forecasted, Chairman Christopher Gleeson added on the call, bringing the total installed base to 102.

The firm's net loss for the quarter was $6.6 million, or $.56 per share, a 35 percent increase from a loss of $4.9 million, or $.68 per share, during the first quarter of 2010, and short of Wall Street expectations for a loss of $.49 per share, as a result of increased expenses.

The firm's R&D spending rose to $2.5 million, up 67 percent from $1.5 million a year ago, while SG&A was flat at $3.2 million. GenMark said it also incurred quality and regulatory costs associated with certifying its Carlsbad manufacturing facility.

On the call, Gleeson provided an update on its product pipeline and said that GenMark intends to submit a 510(k) application with the US Food and Drug Administration for its respiratory panel for the detection of 21 different upper respiratory viruses. It plans to do so in time for clearance for the 2011-2012 flu season.

He also said that the company remains in discussions with the agency for its 2C19 test for clopidogrel (Plavix). The company now believes a premarket approval submission will be required "so our efforts will immediately focus on providing the necessary data to enable us … to complete the work that will allow us to provide a submission in a timely manner."

GenMark hopes to submit its PMA in the first half of 2012, Gleeson said.

In November, the firm licensed Innogenetics' hepatitis C virus genotyping patent estate for the US, and Gleeson said on Monday that the launch of the firm's test based on that technology is on track to launch in about two months.

Lastly, he said that the company has made "good progress" in the development of a test for the detection of the major mutations in the KRAS gene.

"When fully developed, we expect our product to have a clear differentiation in content and workflow when compared to other products on the market today," he said. Like the 2C19 test, GenMark believes a PMA submission will be needed for the KRAS test, but the company has delayed the final stage of development of the test until after the hepatitis C test is launched.

GenMark remains confident that it will be able to bring the test to market before the end of the year, Gleeson said.

The firm has also completed an external assessment of potential partners for the development of its eSensor next-generation sample-to-answer system, and is in the final stages of contract negotiation, he said, adding that GenMark believes that the system will be launched in the second-half of 2013.

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