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.
Highlights
- 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 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 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 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) | |||||||
| September 30, 2018 | December 31, 2017 | ||||||
| ASSETS: | |||||||
| Current Assets: | |||||||
| Cash and cash equivalents | $ | 25,005 | $ | 26,754 | |||
| Short-term marketable securities | 17,657 | 45,236 | |||||
| Accounts receivable, net of allowances of $75 and $2,754, respectively | 9,858 | 10,676 | |||||
| Inventories | 11,254 | 10,949 | |||||
| Prepaid expenses and other current assets | 1,894 | 2,216 | |||||
| Total current assets | 65,668 | 95,831 | |||||
| Property and equipment, net | 21,873 | 22,581 | |||||
| Intangible assets, net | 2,170 | 2,624 | |||||
| Restricted cash | 758 | 758 | |||||
| Other long-term assets | 562 | 505 | |||||
| Total assets | $ | 91,031 | $ | 122,299 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY: | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 8,242 | $ | 11,171 | |||
| Accrued compensation | 6,987 | 5,419 | |||||
| Current portion of long-term debt | — | 7,927 | |||||
| Other current liabilities | 2,302 | 3,226 | |||||
| Total current liabilities | 17,531 | 27,743 | |||||
| Deferred rent | 2,952 | 3,059 | |||||
| Long-term debt | 28,730 | 20,099 | |||||
| Other noncurrent liabilities | 112 | 241 | |||||
| Total liabilities | 49,325 | 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, respectively | 6 | 6 | |||||
| Additional paid-in capital | 497,018 | 487,525 | |||||
| Accumulated deficit | (455,322 | ) | (416,383 | ) | |||
| Accumulated other comprehensive income | 4 | 9 | |||||
| Total stockholders’ equity | 41,706 | 71,157 | |||||
| Total liabilities and stockholders’ equity | $ | 91,031 | $ | 122,299 | |||
| GENMARK DIAGNOSTICS, INC. | |||||||||||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||||||||||||||
| (In thousands, except per share data) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Revenue: | |||||||||||||||
| Product revenue | $ | 15,713 | $ | 11,552 | $ | 51,156 | $ | 36,313 | |||||||
| License and other revenue | 82 | 51 | 225 | 184 | |||||||||||
| Total revenue | 15,795 | 11,603 | 51,381 | 36,497 | |||||||||||
| Cost of revenue | 10,165 | 7,400 | 37,172 | 21,227 | |||||||||||
| Gross profit | 5,630 | 4,203 | 14,209 | 15,270 | |||||||||||
| Operating expenses: | |||||||||||||||
| Sales and marketing | 5,375 | 5,121 | 15,964 | 14,974 | |||||||||||
| General and administrative | 4,718 | 3,565 | 13,398 | 11,553 | |||||||||||
| Research and development | 6,105 | 10,248 | 22,007 | 34,297 | |||||||||||
| Total operating expenses | 16,198 | 18,934 | 51,369 | 60,824 | |||||||||||
| Loss from operations | (10,568 | ) | (14,731 | ) | (37,160 | ) | (45,554 | ) | |||||||
| Other income (expense): | |||||||||||||||
| Interest income | 188 | 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 diluted | 55,847 | 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 tax | 49 | 51 | 29 | 145 | |||||||||||
| Net unrealized gains (losses) on marketable securities, net of tax | 4 | (9 | ) | 26 | (24 | ) | |||||||||
| Total other comprehensive income/(loss) | 53 | 42 | 55 | 121 | |||||||||||
| Total comprehensive loss | $ | (10,940 | ) | $ | (15,366 | ) | $ | (38,882 | ) | $ | (47,191 | ) | |||
| GENMARK DIAGNOSTICS, INC. | |||||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (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 amortization | 5,281 | 3,811 | |||||
| Net amortization/(accretion) of premiums/discounts on investments | (110 | ) | 4 | ||||
| Amortization of deferred debt issuance costs | 725 | 891 | |||||
| Stock-based compensation | 8,895 | 8,386 | |||||
| Provision for bad debt | 24 | 51 | |||||
| Non-cash inventory adjustments | 1,061 | 911 | |||||
| Other non-cash adjustments | (62 | ) | (190 | ) | |||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | 797 | 1,272 | |||||
| Inventories | (3,847 | ) | (4,813 | ) | |||
| Prepaid expenses and other assets | 384 | (767 | ) | ||||
| Other long-term assets | — | (16 | ) | ||||
| Accounts payable | (3,408 | ) | (1,468 | ) | |||
| Accrued compensation | 1,053 | (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 securities | 56,500 | 8,500 | |||||
| Net cash provided by (used in) investing activities | 26,655 | (38,445 | ) | ||||
| Financing activities: | |||||||
| Proceeds from issuance of common stock | 535 | 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 exercises | 22 | 213 | |||||
| Net cash provided by financing activities | 469 | 90,269 | |||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 27 | (17 | ) | ||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | (1,749 | ) | 11,202 | ||||
| Cash, cash equivalents, and restricted cash at beginning of year | 27,512 | 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 | |||