NEW YORK (GenomeWeb) – GenMark Diagnostics reported after the close of the market on Monday that its third quarter revenues rose 36 percent year over year, driven in part by ePlex analyzer placements.
For the three months ended Sept. 30, the firm reported revenues of $15.8 million, up from $11.6 million a year ago, and beating the consensus Wall Street estimate of $15.5 million.
In the quarter, the firm submitted two ePlex Blood Culture Identification (BCID) panels for clearance to the US Food and Drug Administration — its Gram-Negative (BCID-GN) panel and Fungal Pathogen (BCID-FP) panel.
In June, the firm had applied to the FDA for clearance of its ePlex Blood Culture ID – Gram Positive (BCID-GP) panel.
"We are especially pleased to have now completed all three submissions of our blood culture identification panels to the FDA," GenMark President and CEO Hany Massarany said in a statement. "We are confident in the significant opportunity for these panels and currently preparing the market, as well as our organization, for a successful launch in the US.”
GenMark noted that it placed 45 net new ePlex analyzers in the third quarter, expanding the global installed base to 312 instruments. The firm said that underutilized ePlex analyzers are sometimes repositioned to new sites to grow the annuity of the company's installed base. The repositioned analyzers are not counted within its number of new net placements.
In a conference call to discuss the firm's financial results, Massarany said that the firm's top-line performance was also driven by demand for its respiratory pathogen test cartridges. He said that the firm achieved a "meaningful number of placements" in the quarter, driven by the anticipated launch of its BCID panels in the US market.
In Q3, GenMark "continued to see strong placements" of its ePlex NP platform, a three-cartridge analyzer that can process up to 12 patient samples per shift with core ePlex functionality, Massarany said. In Europe, the NP configuration is proving to be especially effective at helping the company gain access to hospitals requiring lower testing volumes and to decentralized test sites in areas with lower populations.
He noted that the firm's respiratory test business will be impacted by a final non-coverage decision for multiplex respiratory panels by Medicare contractor Palmetto. If applied more broadly by other Medicare administration contractors and possibly private payors, non-coverage decisions will lower the firm's revenues by about 5 percent because it only applies to outpatient testing covered by Medicare and most of the firm's respiratory testing is done within hospitals, he said.
The firm's net loss narrowed to $11.0 million, or $.20 per share, from a net loss of $15.4 million, or $.28 per share a year earlier, in line with analysts' expectations.
In Q3, GenMark's R&D costs fell 4 percent to $6.1 million from $10.2 million in Q3 2017, and its SG&A costs rose 16 percent to $10.1 million from $8.7 million.
GenMark ended the quarter with $25 million in cash and cash equivalents and $17.7 million in short-term marketable securities.
GenMark reconfirmed 2018 revenue guidance of $68 million to $72 million. Analysts on average anticipate that the company will book $70 million for the year.
The range of anticipated ePlex placements for the year narrowed to 150 to 160 net new analyzers, and the annuity per ePlex placement remained the same, in the $100,000 to $120,000 range.
In a research note on Tuesday, Canaccord Genuity analyst Mark Massaro pointed out that GenMark's share price is down about 40 percent over the past eight weeks despite strong execution this year, adding that he believes the firm is oversold and undervalued.
"We continue to believe that a multi-billion-dollar market opportunity awaits [GenMark]," he wrote.
In morning trading on the Nasdaq, GenMark's shares were up more than 2 percent to $5.35.