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GenMark Diagnostics Reports Third Quarter 2018 Results

CARLSBAD, Calif., Oct. 29, 2018 (GLOBE NEWSWIRE) -- GenMark Diagnostics, Inc. (Nasdaq: GNMK), a leading provider of automated, multiplex molecular diagnostic testing systems, today announced financial results for the third quarter ended September 30, 2018.


  • Recognized revenues of $15.8 million, an increase of 36% over the prior year period
  • Placed 45 net new ePlex analyzers, expanding the global installed base to 312 placements
  • Submitted two additional ePlex Blood Culture Identification (BCID) Panels to the U.S. Food and Drug Administration (FDA): Gram-Negative (BCID-GN) Panel and Fungal Pathogen (BCID-FP) Panel

“Q3 was another quarter of solid performance across several important areas of our business.  Our sales force delivered strong revenues and expanded our installed base of ePlex analyzers, while our operations team continued to enhance manufacturing and cost efficiencies,” said Hany Massarany, President and Chief Executive Officer. “We are especially pleased to have now completed all three submissions of our blood culture identification panels to the FDA.  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.”

Third Quarter Financial Results
Revenue was $15.8 million in the third quarter of 2018, an increase of 36% versus $11.6 million in the third quarter of 2017.  Gross profit was $5.6 million, or 36% of revenue, compared with $4.2 million, or 36% of revenue in the same period of 2017.

Operating expenses for the third quarter of 2018 were $16.2 million compared to $18.9 million in the same period of 2017.  The decrease was largely due to reduced ePlex development expenses.

Loss per share was $0.20 for the third quarter of 2018, compared to a $0.28 loss per share in the third quarter of 2017.

The Company ended the quarter with $42.7 million in cash and investments.

Guidance for Full Year 2018
GenMark is reconfirming 2018 revenue guidance of $68 to $72 million. Gross margin is now expected to be in the 28-30% range.  The range of expected ePlex placements has been narrowed to 150-160 net new analyzers, and the annuity per ePlex placement remains the same in the $100,000 to $120,000 range.

Webcast and Conference Call Information
GenMark will be hosting a conference call to discuss third quarter results in further detail on Monday, October 29, 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 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 3389197 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

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

(In thousands, except par value)
 September 30,
 December 31,
Current Assets:   
Cash and cash equivalents$25,005  $26,754 
Short-term marketable securities17,657  45,236 
Accounts receivable, net of allowances of $75 and $2,754, respectively9,858  10,676 
Inventories11,254  10,949 
Prepaid expenses and other current assets1,894  2,216 
Total current assets65,668  95,831 
Property and equipment, net21,873  22,581 
Intangible assets, net2,170  2,624 
Restricted cash758  758 
Other long-term assets562  505 
Total assets$91,031  $122,299 
Current liabilities:   
Accounts payable$8,242  $11,171 
Accrued compensation6,987  5,419 
Current portion of long-term debt  7,927 
Other current liabilities2,302  3,226 
Total current liabilities17,531  27,743 
Deferred rent2,952  3,059 
Long-term debt28,730  20,099 
Other noncurrent liabilities112  241 
Total liabilities49,325  51,142 
Stockholders' equity:   
Preferred stock, $0.0001 par value; 5,000 authorized, none issued   
Common stock, $0.0001 par value; 100,000 authorized; 55,955 and 55,066 shares issued and outstanding, respectively6  6 
Additional paid-in capital497,018  487,525 
Accumulated deficit(455,322) (416,383)
Accumulated other comprehensive income4  9 
Total stockholders’ equity41,706  71,157 
Total liabilities and stockholders’ equity$91,031  $122,299 

(In thousands, except per share data)
 Three Months Ended Nine Months Ended
 September 30, September 30,
 2018 2017 2018 2017
Product revenue$15,713  $11,552  $51,156  $36,313 
License and other revenue82  51  225  184 
Total revenue15,795  11,603  51,381  36,497 
Cost of revenue10,165  7,400  37,172  21,227 
Gross profit5,630  4,203  14,209  15,270 
Operating expenses:       
Sales and marketing5,375  5,121  15,964  14,974 
General and administrative4,718  3,565  13,398  11,553 
Research and development6,105  10,248  22,007  34,297 
Total operating expenses16,198  18,934  51,369  60,824 
Loss from operations(10,568) (14,731) (37,160) (45,554)
Other income (expense):       
Interest income188  247  577  353 
Interest expense(661) (1,009) (2,246) (2,270)
Other income (expense)53  76  (49) 227 
Total other income (expense)(420) (686) (1,718) (1,690)
Loss before provision for income taxes(10,988) (15,417) (38,878) (47,244)
Income tax expense (benefit)5  (9) 59  68 
Net loss$(10,993) $(15,408) $(38,937) $(47,312)
Net loss per share, basic and diluted$(0.20) $(0.28) $(0.70) $(0.95)
Weighted average number of shares outstanding, basic and diluted55,847  54,726  55,535  49,908 
Other comprehensive loss:       
Net loss$(10,993) $(15,408) $(38,937) $(47,312)
Other comprehensive income/(loss):       
Foreign currency translation adjustments, net of tax49  51  29  145 
Net unrealized gains (losses) on marketable securities, net of tax4  (9) 26  (24)
Total other comprehensive income/(loss)53  42  55  121 
Total comprehensive loss$(10,940) $(15,366) $(38,882) $(47,191)

(In thousands)
 Nine Months Ended
 September 30,
 2018 2017
Operating activities:   
Net loss$(38,937) $(47,312)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization5,281  3,811 
Net amortization/(accretion) of premiums/discounts on investments(110) 4 
Amortization of deferred debt issuance costs725  891 
Stock-based compensation8,895  8,386 
Provision for bad debt24  51 
Non-cash inventory adjustments1,061  911 
Other non-cash adjustments(62) (190)
Changes in operating assets and liabilities:   
Accounts receivable797  1,272 
Inventories(3,847) (4,813)
Prepaid expenses and other assets384  (767)
Other long-term assets  (16)
Accounts payable(3,408) (1,468)
Accrued compensation1,053  (452)
Other current and non-current liabilities(756) (913)
Net cash used in operating activities(28,900) (40,605)
Investing activities:   
Payments for intellectual property licenses  (500)
Purchases of property and equipment, net(1,060) (3,816)
Purchases of marketable securities(28,785) (56,525)
Proceeds from sales of marketable securities  13,896 
Maturities of marketable securities56,500  8,500 
Net cash provided by (used in) investing activities26,655  (38,445)
Financing activities:   
Proceeds from issuance of common stock535  86,835 
Costs incurred in conjunction with public offering  (5,469)
Principal repayment of borrowings(68) (6,123)
Proceeds from borrowings  15,000 
Payments associated with debt issuance(20) (187)
Proceeds from stock option exercises22  213 
Net cash provided by financing activities469  90,269 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash27  (17)
Net increase (decrease) in cash, cash equivalents, and restricted cash(1,749) 11,202 
Cash, cash equivalents, and restricted cash at beginning of year27,512  16,717 
Cash, cash equivalents, and restricted cash at end of period$25,763  $27,919 
Non-cash investing and financing activities:   
Transfer of systems (from) to property and equipment into (from) inventory$2,477  $(3,438)
Property and equipment included in accounts payable$746  $330 
Intellectual property acquisitions included in other current liabilities$  $ 
Supplemental cash flow information:   
Cash paid for income taxes, net$133  $58 
Cash paid for interest$1,517  $1,143 
Monday, October 29, 2018 - 16:05