CARLSBAD, Calif., April 30, 2019 (GLOBE NEWSWIRE) -- GenMark Diagnostics, Inc. (Nasdaq: GNMK), a leading provider of automated, multiplex molecular diagnostic testing systems, today announced financial results for the quarter ended March 31, 2019.
Highlights
- Recognized total revenue of $21.5 million
- ePlex revenues of $15.7 million represented 73% of total revenue
- ePlex revenues grew 31% compared to the prior year period
- Placed 39 net new ePlex analyzers, expanding the global installed base to 393 placements
- ePlex installed base grew 72% compared to the prior year period
- Increased gross margin to 27%, a 700 basis point improvement over the prior year period
- Received FDA 510(k) clearance for ePlex Blood Culture Identification Gram-Negative Panel, completing the Company’s suite of three Blood Culture Identification Panels
- Expanded commercial team in North America with the addition of Michael Harkins as SVP of Sales and transition of Michael Gleeson to SVP of Corporate and Strategic Accounts
“We achieved strong first quarter results across our key business priorities, including ePlex placements, revenue growth and gross margin improvement. Our commercial teams delivered year-over-year growth in both total revenue and ePlex revenue, even when compared to the exceptionally severe flu season we experienced in the 1st quarter of 2018. We also saw improvement in our manufacturing and cost efficiencies which drove higher ePlex gross margin in the quarter. This is especially encouraging given the significant growth of ePlex as a percentage of our total revenue,” said Hany Massarany, President and Chief Executive Officer. “Menu expansion continues to be a top priority and we were delighted to receive FDA clearance for our third BCID panel. We believe that the strength of our Respiratory Pathogen panel, now combined with our full suite of BCID panels, will further differentiate ePlex as the platform of choice in molecular testing.”
First Quarter Financial Results
Revenue was $21.5 million in the first quarter of 2019, an increase of 4% versus $20.6 million in the first quarter of 2018. Gross profit was $5.9 million, or 27% of revenue, compared with $4.2 million, or 20% of revenue in the same period of 2018.
Operating expenses for the first quarter of 2019 were $16.8 million compared to $15.0 million in the same period of 2018. The increase was largely due to additional spend on R&D related to ePlex menu development.
Loss per share was $0.21 for the first quarter of 2019, compared to a $0.21 loss per share in the first quarter of 2018.
Cash and investments were $48.4 million as of March 31, 2019.
Guidance for Full Year 2019
GenMark continues to expect total revenue for the full year 2019 to be in the range of $85 million to $90 million.
Global ePlex placements are expected to range from 170 to 190 net new analyzers with an annuity per analyzer of $135,000 to $145,000. The ePlex platform is expected to reach 75% of total 2019 revenue, representing 70% year-over-year growth in ePlex revenues.
Gross margin is expected to be in the 28% to 30% range and operating expenses are expected to be approximately $65 million to $70 million.
Cash usage is projected to decline year-over-year to $25 million to $30 million.
Webcast and Conference Call Information
GenMark will be hosting a conference call to discuss first quarter results in further detail on Tuesday, April 30, 2019 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 4595526 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 the Company’s future operating results and financial position. Such statements, including, but not limited to, those regarding its future financial performance, plans and objectives of management, and the timely and effective commercialization and clinical impact of the Company’s ePlex system, are all subject to risks and uncertainties that could cause actual results and financial position to differ materially. Some of these risks and uncertainties include, but are not limited to, GenMark’s 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, the Company’s ability to successfully expand sales of its product offerings outside the United States, and third-party payor reimbursement to its customers, as well as other risks and uncertainties described under the “Risk Factors” in GenMark’s public filings with the Securities and Exchange Commission. The Company assumes 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
Leigh Salvo
(415) 937-5404
ir@genmarkdx.com
GENMARK DIAGNOSTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
| March 31, 2019 | December 31, 2018 | ||||||
| ASSETS: | |||||||
| Current Assets: | |||||||
| Cash and cash equivalents | $ | 35,304 | $ | 36,286 | |||
| Short-term marketable securities | 13,118 | 8,882 | |||||
| Accounts receivable, net of allowances of $75 and $75, respectively | 9,168 | 11,534 | |||||
| Inventories | 9,391 | 10,244 | |||||
| Current operating lease right-of-use assets | 1,260 | — | |||||
| Prepaid expenses and other current assets | 1,396 | 1,483 | |||||
| Total current assets | 69,637 | 68,429 | |||||
| Property and equipment, net | 19,927 | 21,070 | |||||
| Intangible assets, net | 1,875 | 2,023 | |||||
| Restricted cash | 758 | 758 | |||||
| Noncurrent operating lease right-of-use assets | 3,734 | — | |||||
| Other long-term assets | 729 | 701 | |||||
| Total assets | $ | 96,660 | $ | 92,981 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY: | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 8,508 | $ | 9,886 | |||
| Accrued compensation | 5,111 | 7,358 | |||||
| Current operating lease liability | 1,801 | — | |||||
| Other current liabilities | 2,321 | 3,043 | |||||
| Total current liabilities | 17,741 | 20,287 | |||||
| Deferred rent | 2,996 | ||||||
| Long-term debt | 47,821 | 36,042 | |||||
| Noncurrent operating lease liability | 6,591 | — | |||||
| Other noncurrent liabilities | 70 | 109 | |||||
| Total liabilities | 72,223 | 59,434 | |||||
| Stockholders' equity: | |||||||
| Preferred stock, $0.0001 par value; 5,000 authorized, none issued | — | — | |||||
| Common stock, $0.0001 par value; 100,000 authorized; 57,026 and 56,240 shares issued and outstanding, respectively | 6 | 6 | |||||
| Additional paid-in capital | 503,318 | 500,344 | |||||
| Accumulated deficit | (478,963 | ) | (466,883 | ) | |||
| Accumulated other comprehensive income | 76 | 80 | |||||
| Total stockholders’ equity | 24,437 | 33,547 | |||||
| Total liabilities and stockholders’ equity | $ | 96,660 | $ | 92,981 | |||
See accompanying notes to unaudited condensed consolidated financial statements.
GENMARK DIAGNOSTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except per share data)
| Three Months Ended | |||||||
| March 31, | |||||||
| 2019 | 2018 | ||||||
| Revenue: | |||||||
| Product revenue | $ | 21,371 | $ | 20,576 | |||
| License and other revenue | 162 | 69 | |||||
| Total revenue | 21,533 | 20,645 | |||||
| Cost of revenue | 15,670 | 16,480 | |||||
| Gross profit | 5,863 | 4,165 | |||||
| Operating expenses: | |||||||
| Sales and marketing | 5,909 | 5,402 | |||||
| General and administrative | 4,521 | 4,133 | |||||
| Research and development | 6,343 | 5,420 | |||||
| Total operating expenses | 16,773 | 14,955 | |||||
| Loss from operations | (10,910 | ) | (10,790 | ) | |||
| Other income (expense): | |||||||
| Interest income | 133 | 187 | |||||
| Interest expense | (1,276 | ) | (788 | ) | |||
| Other income (expense) | (11 | ) | (12 | ) | |||
| Total other income (expense) | (1,154 | ) | (613 | ) | |||
| Loss before provision for income taxes | (12,064 | ) | (11,403 | ) | |||
| Income tax expense | 16 | 20 | |||||
| Net loss | $ | (12,080 | ) | $ | (11,423 | ) | |
| Net loss per share, basic and diluted | $ | (0.21 | ) | $ | (0.21 | ) | |
| Weighted average number of shares outstanding, basic and diluted | 56,581 | 55,205 | |||||
| Other comprehensive loss: | |||||||
| Net loss | $ | (12,080 | ) | $ | (11,423 | ) | |
| Other comprehensive income/(loss): | |||||||
| Foreign currency translation adjustments, net of tax | (6 | ) | 34 | ||||
| Net unrealized gains (losses) on marketable securities, net of tax | 2 | 8 | |||||
| Total other comprehensive income/(loss) | (4 | ) | 42 | ||||
| Total comprehensive loss | $ | (12,084 | ) | $ | (11,381 | ) | |
See accompanying notes to unaudited condensed consolidated financial statements.
GENMARK DIAGNOSTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Three Months Ended March 31, | |||||||
| 2019 | 2018 | ||||||
| Operating activities: | |||||||
| Net loss | $ | (12,080 | ) | $ | (11,423 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
| Depreciation and amortization | 1,812 | 1,740 | |||||
| Net amortization/(accretion) of premiums/discounts on investments | (21 | ) | (42 | ) | |||
| Amortization of deferred debt issuance costs | 366 | 290 | |||||
| Stock-based compensation | 2,544 | 2,724 | |||||
| Non-cash inventory adjustments | 634 | 449 | |||||
| Other non-cash adjustments | (16 | ) | 84 | ||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | 2,355 | 2,566 | |||||
| Inventories | (131 | ) | (526 | ) | |||
| Prepaid expenses and other assets | — | 760 | |||||
| Accounts payable | (1,043 | ) | (1,361 | ) | |||
| Accrued compensation | (2,475 | ) | (992 | ) | |||
| Other current and non-current liabilities | (126 | ) | (321 | ) | |||
| Net cash used in operating activities | (8,181 | ) | (6,052 | ) | |||
| Investing activities: | |||||||
| Purchases of property and equipment, net | (333 | ) | (465 | ) | |||
| Purchases of marketable securities | (12,014 | ) | (7,900 | ) | |||
| Maturities of marketable securities | 7,800 | 18,000 | |||||
| Net cash provided by (used in) investing activities | (4,547 | ) | 9,635 | ||||
| Financing activities: | |||||||
| Principal repayment of borrowings | (35,116 | ) | (22 | ) | |||
| Proceeds from borrowings | 50,000 | — | |||||
| Payments associated with debt issuance | (3,588 | ) | (20 | ) | |||
| Proceeds from stock option exercises | 430 | 17 | |||||
| Net cash provided by (used in) financing activities | 11,726 | (25 | ) | ||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 20 | (34 | ) | ||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | (982 | ) | 3,524 | ||||
| Cash, cash equivalents, and restricted cash at beginning of year | 37,044 | 27,512 | |||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 36,062 | $ | 31,036 | |||
| Non-cash investing and financing activities: | |||||||
| Transfer of systems (from) to property and equipment into (from) inventory | $ | 351 | $ | 569 | |||
| Property and equipment included in accounts payable | $ | 36 | $ | 147 | |||
| Supplemental cash flow information: | |||||||
| Cash paid for income taxes, net | $ | 44 | $ | 33 | |||
| Cash paid for interest | $ | 761 | $ | 508 | |||
See accompanying notes to unaudited condensed consolidated financial statements.