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GenMark Diagnostics Reports Second Quarter 2018 Results

CARLSBAD, Calif., July 30, 2018 (GLOBE NEWSWIRE) -- GenMark Diagnostics, Inc. (Nasdaq:GNMK), a leading provider of automated, multiplex molecular diagnostic testing systems, today announced financial results for the second quarter ended June 30, 2018.

Highlights

  • Recognized revenues of $14.9 million, an increase of 21% over the prior year period
  • Placed 39 net new ePlex analyzers, expanding the global installed base to 267 placements
  • Submitted the ePlex BCID Gram Positive panel to the FDA
  • Completed clinical testing for FDA submission of the ePlex BCID Gram Negative panel
  • Commenced clinical study for FDA submission of the ePlex Fungal Pathogen panel

“Our second quarter results reflect solid execution on our strategic priorities of growth through ePlex commercialization and menu expansion, as well as improving manufacturing efficiencies. Top line performance was largely driven by strong ePlex placements and demand for our respiratory pathogen test cartridges. We also submitted to the FDA the first of three blood culture identification panels being developed on our ePlex system, which was a significant milestone for the company. We expect FDA submission of the remaining two blood culture panels in the third and fourth quarters of this year, as previously communicated,” said Hany Massarany, President and Chief Executive Officer. “Based on this momentum and our continued focus on commercial and operational execution, I am confident we will achieve our goals for 2018 and beyond.”

Second Quarter Financial Results
Revenue was $14.9 million in the second quarter of 2018, an increase of 21% versus $12.4 million in the second quarter of 2017.  Gross profit was $4.4 million, or 30% of revenue, compared with $4.9 million, or 40% of revenue in the same period of 2017, reflecting the increased proportion of ePlex revenues in the quarter versus prior year.

Operating expenses for the second quarter of 2018 were $20.2 million compared to $22.2 million in the same period for 2017.  The decrease was largely due to reduced ePlex development expenses.

Loss per share was $0.30 per share for the second quarter of 2018, compared to a $0.37 loss per share in the second quarter of 2017.

The Company ended the quarter with $55.2 million in cash and investments, reflecting the impact of reductions in operating expenses and efforts to minimize working capital needs.

Guidance for Full Year 2018
GenMark is reconfirming 2018 revenue guidance of $68 to $72 million. Gross margin is expected to be in the 30% range. The Company continues to expect ePlex placements of 140-170 net new analyzers, and an annuity per ePlex placement in the $100,000 to $120,000 range.

Webcast and Conference Call Information
GenMark will be hosting a conference call to discuss second quarter results in further detail on Monday, July 30, 2018 starting at 4:30 p.m. ET. The conference call will be concurrently webcast. The link to the webcast will be available on the GenMark Diagnostics, Inc. website at www.genmarkdx.com under the investor relations section and will be archived for future reference. To listen to the conference call, please dial (877) 312-5847 (US/Canada) or (253) 237-1154 (International) and use the conference ID number 4473539 approximately five minutes prior to the start time.

About GenMark Diagnostics
GenMark Diagnostics (NASDAQ: GNMK) is a leading provider of multiplex molecular diagnostic solutions designed to enhance patient care, improve key quality metrics, and reduce the total cost-of-care. Utilizing GenMark's proprietary eSensor® detection technology, GenMark's eSensor XT-8® and ePlex® systems are designed to support a broad range of molecular diagnostic tests with compact, easy-to-use workstations and self-contained, disposable test cartridges. GenMark’s ePlex: The True Sample-to-Answer Solution™ is designed to optimize laboratory efficiency and address a broad range of infectious disease testing needs, including respiratory, bloodstream, and gastrointestinal infections.  For more information, visit www.genmarkdx.com

Safe Harbor Statement
This press release includes forward-looking statements regarding events, trends and business prospects, which may affect our future operating results and financial position. Such statements, including, but not limited to, those regarding our future financial performance, regulatory submissions and approvals, and the timely and effective commercialization and clinical impact of our ePlex system, are all subject to risks and uncertainties that could cause our actual results and financial position to differ materially. Some of these risks and uncertainties include, but are not limited to, our ability to successfully commercialize our ePlex system and its related test menu in a timely manner, constraints or inefficiencies caused by unanticipated acceleration and deceleration of customer demand, our ability to successfully expand sales of our product offerings outside the United States, and third-party payor reimbursement to our customers, as well as other risks and uncertainties described under the “Risk Factors” in our public filings with the Securities and Exchange Commission. We assume no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made.

Investor Relations Contact                                                             
Lynn Pieper Lewis or Leigh Salvo                                  
(415) 937-5404   
ir@genmarkdx.com 


GENMARK DIAGNOSTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)

 June 30,
 2018
 December 31,
 2017
ASSETS:
Current Assets:   
Cash and cash equivalents$28,891  $26,754 
Short-term marketable securities26,358  45,236 
Accounts receivable, net of allowances of $86 and $2,754, respectively7,144  10,676 
Inventories8,828  10,949 
Prepaid expenses and other current assets1,912  2,216 
Total current assets73,133  95,831 
    
Property and equipment, net21,159  22,581 
Intangible assets, net2,327  2,624 
Restricted cash758  758 
Other long-term assets522  505 
Total assets$97,899  $122,299 
    
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:   
Accounts payable$9,219  $11,171 
Accrued compensation4,872  5,419 
Current portion of long-term debt19,009  7,927 
Other current liabilities2,710  3,226 
Total current liabilities35,810  27,743 
    
Deferred rent2,715  3,059 
Long-term debt9,579  20,099 
Other noncurrent liabilities146  241 
Total liabilities48,250  51,142 
    
Stockholders' equity:   
Preferred stock, $0.0001 par value; 5,000 authorized, none issued   
Common stock, $0.0001 par value; 100,000 authorized; 55,753 and 55,066 shares issued and outstanding, respectively6  6 
Additional paid-in capital493,921  487,525 
Accumulated deficit(444,329) (416,383)
Accumulated other comprehensive income51  9 
Total stockholders’ equity49,649  71,157 
Total liabilities and stockholders’ equity$97,899  $122,299 
        


GENMARK DIAGNOSTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except per share data)

 Three Months Ended Six Months Ended
 June 30, June 30,
 2018 2017 2018 2017
Revenue:       
Product revenue$14,867  $12,291  $35,443  $24,761 
License and other revenue74  68  143  133 
Total revenue14,941  12,359  35,586  24,894 
Cost of revenue10,527  7,475  27,007  13,827 
Gross profit4,414  4,884  8,579  11,067 
Operating expenses:       
Sales and marketing5,187  5,159  10,589  9,853 
General and administrative4,547  3,978  8,680  7,988 
Research and development10,482  13,014  15,902  24,049 
Total operating expenses20,216  22,151  35,171  41,890 
Loss from operations(15,802) (17,267) (26,592) (30,823)
Other income (expense):       
Interest income202  54  389  106 
Interest expense(797) (755) (1,585) (1,261)
Other income (expense)(90) 56  (102) 151 
Total other income (expense)(685) (645) (1,298) (1,004)
Loss before provision for income taxes(16,487) (17,912) (27,890) (31,827)
Income tax expense34  77  54  78 
Net loss$(16,521) $(17,989) $(27,944) $(31,905)
Net loss per share, basic and diluted$(0.30) $(0.37) $(0.50) $(0.67)
Weighted average number of shares outstanding, basic and diluted55,547  48,067  55,377  47,460 
        
Other comprehensive loss:       
Net loss$(16,521) $(17,989) $(27,944) $(31,905)
Other comprehensive income/(loss):       
Foreign currency translation adjustments, net of tax14  3  (20) 94 
Net unrealized gains (losses) on marketable securities, net of tax14  1  22  (15)
Total other comprehensive income/(loss)28  4  2  79 
Total comprehensive loss$(16,493) $(17,985) $(27,942) $(31,826)
                


GENMARK DIAGNOSTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

 Six Months Ended
 June 30,
 2018 2017
Operating activities:   
Net loss$(27,944) $(31,905)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization3,507  2,454 
Net amortization/(accretion) of premiums/discounts on investments(78) 30 
Amortization of deferred debt issuance costs583  493 
Stock-based compensation5,799  5,602 
Provision for bad debt34  32 
Non-cash inventory adjustments809  565 
Other non-cash adjustments(13) (123)
Changes in operating assets and liabilities:   
Accounts receivable3,501  1,795 
Inventories353  (2,563)
Prepaid expenses and other assets340  (119)
Accounts payable(1,853) (3,134)
Accrued compensation(853) (1,170)
Other current and non-current liabilities(622) (124)
Net cash used in operating activities(16,437) (28,167)
Investing activities:   
Purchases of property and equipment, net(924) (2,535)
Purchases of marketable securities(23,622) (10,496)
Proceeds from sales of marketable securities  13,896 
Maturities of marketable securities42,600  4,100 
Net cash provided by investing activities18,054  4,965 
Financing activities:   
Proceeds from issuance of common stock535  86,835 
Costs incurred in conjunction with public offering  (5,171)
Principal repayment of borrowings(45) (964)
Proceeds from borrowings  15,000 
Payments associated with debt issuance(20) (187)
Proceeds from stock option exercises22  170 
Net cash provided by financing activities492  95,683 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash28  (13)
Net increase in cash, cash equivalents, and restricted cash2,137  72,468 
Cash, cash equivalents, and restricted cash at beginning of year27,512  16,717 
Cash, cash equivalents, and restricted cash at end of period$29,649  $89,185 
Non-cash investing and financing activities:   
Transfer of systems (from) to property and equipment into (from) inventory$956  $(1,534)
Property and equipment included in accounts payable$168  $713 
Intellectual property acquisitions included in other current liabilities$  $500 
Supplemental cash flow information:   
Cash paid for income taxes, net$113  $54 
Cash paid for interest$1,003  $574 
        


Monday, July 30, 2018 - 16:05