• GenMark Diagnostics Reports Fourth Quarter and Full Year 2017 Results

    Source: Nasdaq GlobeNewswire / 27 Feb 2018 16:03:19   Eastern Standard Time

    CARLSBAD, Calif., Feb. 27, 2018 (GLOBE NEWSWIRE) -- GenMark Diagnostics, Inc. (Nasdaq:GNMK), a leading provider of automated, multiplex molecular diagnostic testing systems, today announced financial results for the fourth quarter and full year ended December 31, 2017.

    Highlights

    • Revenues for the fourth quarter of 2017 were $16.0 million, an increase of 8% over the prior year period
    • Revenues for the full year 2017 were $52.5 million, representing an increase of 7% over 2016
    • Placed 49 ePlex® analyzers in the fourth quarter of 2017
    • Exited the year with an installed base of 196 ePlex analyzers in U.S. and European labs
    • XT-8 installed base remained relatively stable at 620 analyzers in U.S. labs

    “In 2017, we achieved several significant product launches that are fundamental to the continued growth and success of our business.  We launched our FDA cleared ePlex system and Respiratory Pathogen Panel in the U.S. ahead of the current severe flu season, and we introduced our ePlex family of CE Marked BCID sepsis panels in Europe.  We’re also very pleased with the recent launch of our ePlex NP system, which we designed to address lower test-volume sites and decentralized near patient settings,” said Hany Massarany, President and Chief Executive Officer.  “Looking ahead, we are excited about the opportunity we have in 2018 and beyond, to drive ePlex commercialization with an expanded menu of test panels and a rapidly growing number of customers utilizing ePlex for routine clinical testing,” concluded Massarany.

    Fourth Quarter Financial Results
    Revenue was $16.0 million in the fourth quarter of 2017, an increase of 8% versus $14.9 million in the fourth quarter of 2016.  Gross profit was $4.7 million, or 30% of revenue, compared with $8.6 million, or 58% of revenue in the same period of 2016, reflecting the increased proportion of ePlex revenues in the quarter.

    Annuity per XT-8 analyzer was approximately $65,000 over the last 4 quarters. Annuity per ePlex analyzer was approximately $120,000 in the fourth quarter.

    Operating expenses for the fourth quarter of 2017 were $18.7 million compared to $20.7 million in the same period for 2016.  The decrease was largely due to reduced ePlex development expenses.

    Loss per share was $0.26 per share for the fourth quarter of 2017, compared to a $0.27 loss per share in the fourth quarter of 2016.

    The Company ended the quarter with $72.0 million in cash and investments, reflecting the impact of increasing inventory levels in advance of the flu season.

    Guidance for Full Year 2018
    GenMark projects revenue for the full year 2018 to range from $68 to $72 million. Gross margin is expected to be in the mid 30% range and operating expenses in the mid-$60 million range. The Company expects ePlex placements of 140-170 analyzers, and an annuity per ePlex placement in the range of $100,000 to $120,000.

    Webcast and Conference Call Information
    The Company will be hosting a conference call to discuss fourth quarter results in further detail on Tuesday, February 27, 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 3489404 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.
    CONSOLIDATED BALANCE SHEETS
    (In thousands, except par value)

      
     As of December 31,
     2017 2016
    ASSETS:
    Current Assets:   
    Cash and cash equivalents$26,754  $15,959 
    Short-term marketable securities45,236  25,607 
    Accounts receivable, net of allowances of $2,754 and $2,740, respectively10,676  9,048 
    Inventories10,949  6,633 
    Prepaid expenses and other current assets1,792  1,202 
    Total current assets95,407  58,449 
        
    Property and equipment, net22,581  18,268 
    Intangible assets, net2,624  2,670 
    Restricted cash758  758 
    Other long-term assets192  179 
    Total assets$121,562  $80,324 
        
    LIABILITIES AND STOCKHOLDERS' EQUITY:
    Current liabilities:   
    Accounts payable$11,171  $8,703 
    Accrued compensation5,419  5,650 
    Current portion of long-term debt7,927  7,935 
    Other current liabilities3,226  4,133 
    Total current liabilities27,743  26,421 
        
    Deferred rent3,059  3,652 
    Long-term debt20,099  11,880 
    Other noncurrent liabilities241  220 
    Total liabilities51,142  42,173 
        
    Stockholders' equity   
    Preferred stock, $0.0001 par value; 5,000 authorized, none issued   
    Common stock, $0.0001 par value; 100,000 authorized; 55,066 and 46,554 shares issued and outstanding, respectively6  4 
    Additional paid-in capital487,525  393,322 
    Accumulated deficit(417,120) (355,270)
    Accumulated other comprehensive income9  95 
    Total stockholders’ equity70,420  38,151 
    Total liabilities and stockholders’ equity$121,562  $80,324 
            


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

        
     Three Months Ended December 31, Twelve Months Ended December 31,
     2017 2016 2017 2016
     (unaudited) (unaudited)    
    Revenue       
    Product revenue$15,947  $14,803  $52,260  $48,914 
    License and other revenue75  82  259  360 
    Total revenue16,022  14,885  52,519  49,274 
    Cost of revenue11,287  6,243  32,514  19,700 
    Gross profit4,735  8,642  20,005  29,574 
    Operating expenses:       
    Sales and marketing5,584  4,501  20,557  14,734 
    General and administrative4,651  3,841  16,205  14,363 
    Research and development8,463  12,358  42,760  49,458 
    Total operating expenses18,698  20,700  79,522  78,555 
    Loss from operations(13,963) (12,058) (59,517) (48,981)
    Other income (expense):       
    Interest income208  77  561  176 
    Interest expense(771) (474) (3,042) (1,536)
    Other income (expense)22  (168) 249  (160)
    Total other income (expense)(541) (565) (2,232) (1,520)
    Loss before provision for income taxes(14,504) (12,623) (61,749) (50,501)
    Income tax expense32  55  101  100 
    Net loss$(14,536) $(12,678) $(61,850) $(50,601)
    Net loss per share, basic and diluted$(0.26) $(0.27) $(1.21) $(1.15)
    Weighted average number of shares outstanding basic and diluted54,910  46,458  51,169  44,100 
            
    Other comprehensive loss       
    Net loss$(14,536) $(12,678) $(61,850) $(50,601)
    Other comprehensive income/(loss):       
    Foreign currency translation adjustments, net of tax(229) 86  (84) 77 
    Net unrealized losses on marketable securities, net of tax22  (13) (2) (11)
    Total other comprehensive income/(loss)(207) 73  (86) 66 
    Total comprehensive loss$(14,743) $(12,605) $(61,936) $(50,535)
                    


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

      
     Years ended December 31,
     2017 2016 2015
    Operating activities:     
    Net loss$(61,850) $(50,601) $(42,197)
    Adjustments to reconcile net loss to net cash used in operating activities:     
    Depreciation and amortization5,317  3,916  3,405 
    Net amortization/(accretion) of premiums/discounts on investments(39) 89  180 
    Gain on sale of investment in preferred stock  (9) (223)
    Amortization of deferred debt issuance costs1,132  388  285 
    Stock-based compensation12,170  9,236  9,995 
    Provision for bad debt14  13  25 
    Non-cash inventory adjustments1,323  134  594 
    Other non-cash adjustments(224) 145  186 
    Changes in operating assets and liabilities:     
    Accounts receivable(1,555) (2,250) (1,983)
    Inventories(10,512) (3,450) (1,286)
    Prepaid expenses and other assets(599) (613) (36)
    Accounts payable2,557  4,105  (757)
    Accrued compensation(263) 2,172  (458)
    Other current and non-current liabilities(893) 1,088  355 
        Net cash used in operating activities(53,422) (35,637) (31,915)
    Investing activities:     
    Payments for intellectual property licenses(500) (1,500) (550)
    Purchases of property and equipment(4,815) (7,000) (3,756)
    Purchases of marketable securities(70,989) (33,688) (22,646)
    Proceeds from sales of marketable securities13,896  8,015  223 
    Maturities of marketable securities37,500  10,050  46,050 
       Net cash provided by (used in) investing activities(24,908) (24,123) 19,321 
    Financing activities:     
    Proceeds from issuance of common stock87,267  30,920  884 
    Costs incurred in conjunction with public offering(5,469) (1,143)  
    Principal repayment of borrowings(7,848) (40) (22)
    Proceeds from borrowings15,000  10,000  10,000 
    Costs associated with debt issuance(187) (90) (718)
    Proceeds from stock option exercises287  712  989 
       Net cash provided by financing activities89,050  40,359  11,133 
    Effect of exchange rate changes on cash75  (25) (9)
    Net increase (decrease) in cash and cash equivalents10,795  (19,426) (1,470)
    Cash and cash equivalents at beginning of year15,959  35,385  36,855 
    Cash and cash equivalents at end of year$26,754  $15,959  $35,385 
    Non-cash investing and financing activities:     
    Transfer of systems from property and equipment into inventory$4,885  $263  $225 
    Property and equipment costs incurred but not paid included in accounts payable$227  $1,159  $146 
    Intellectual property acquisition included in accrued expenses$  $  $800 
    Supplemental cash flow information:     
    Cash paid for interest$1,643  $1,130  $572 
    Cash paid for income taxes, net$61  $65  $10 
                

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