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GenMark Diagnostics Q3 Revenues Up 28 Percent

NEW YORK (GenomeWeb) – GenMark Diagnostics reported after the close of the market on Thursday that its third quarter revenues rose 28 percent, driven by strength in sales of its XT-8 eSensor multiplex molecular diagnostics system.

For the three months ended Sept. 30, the firm reported revenues of $10.8 million, up from $8.5 million a year ago, and beating the consensus Wall Street estimate of $10.4 million.

On a call with analysts following the release of the earnings, GenMark President and CEO Hany Massarany said that most of the firm's Q3 revenues came from its installed base of 645 XT-8 analyzers in the US.

However, he added later that he believed the ePlex, a syndromic infectious disease testing platform, will drive the firm's future growth and valuation. "My expectation is that while we will continue to support XT-8…as we expand our sales organizations globally and in the US, our focus will continue to shift to ePlex," he said.

GenMark's ePlex RP Panel detects 20 viral and three bacterial targets in nasopharyngeal specimens with less than two minutes of hands-on time. In June, the firm received CE marking for the ePlex system and respiratory pathogen panel. GenMark is now preparing clinical study reports for submission to the US Food and Drug Administration this quarter.

"The testing of clinical samples required for [FDA] 510(k) clearance of the ePlex instrument and its respiratory pathogen panel was recently completed by all external clinical sites," Massarany said.

He also noted that over the past few months, the firm's ePlex commercialization methods have been highly effective.

"Since our last update, we generated our first ePlex revenues in Europe and more than doubled the number of ePlex customer agreements to more than 30," he said. "Our global funnel of ePlex opportunities continues to strengthen, and customer feedback remains very positive, confirming the high quality of ePlex results as well as the ease of use of the ePlex platform, its intuitive user interface, and its comprehensive reporting capabilities."  

Massarany added that the firm's global funnel of ePlex opportunities continues to strengthen, and customer feedback remains very positive. "Over the next few months, we look forward to ramping up the commercial success of ePlex in Europe as well as continuing our preparation of US launch in 2017," he said.

CFO Scott Mendel said on the call that the company has also "made substantial progress with our blood culture ID family of assays – gram positive, gram negative, and fungal. Testing of these three assays with clinical specimens is ongoing, and we're targeting to [achieve] a CE mark for one or two of these assays this year, and the remainder early next year. Accordingly, we anticipate US launch of the blood culture ID assays in the second half of 2017."

He further noted that the company also has several other panels in development.

GenMark also raised $29 million in cash during the quarter in an at-the-market equity offering of common stock.

The firm's net loss widened slightly to $12.1 million from $11.1 million a year earlier. Its loss per share stayed flat at $.27, and beat analysts' average estimate for a loss per share of $.31.

GenMark's R&D costs rose 21 percent to $11.6 million from $9.6 million in Q3 2015, and its SG&A costs fell 4 percent to $6.4 million from $6.7 million.

GenMark ended the quarter with $19.3 million in cash and cash equivalents, and $34.9 million in marketable securities.

For 2016, the company maintained its revenue guidance of $47.0 million to $51.0 million. The average analyst expectation is that the company will book $49.2 million for the year.

GenMark Diagnostics' shares were up 5 percent to $11.55 in Friday morning trading on the Nasdaq.

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