GNMK - GenMark Diagnostics Reports Third Quarter 2019 Results

November, 06 2019 04:03 PM GenMark Diagnostics Inc.

CARLSBAD, Calif., Nov. 06, 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 September 30, 2019.

Highlights

Recognized total revenue of $20.9 million and achieved total gross margin of 34%
? ePlex revenue of $13.4 million represented 64% of total revenue
? ePlex revenue grew 98% compared to the prior year period
Placed 51 net new ePlex analyzers, expanding the global installed base to 489 placements
? ePlex installed base grew 57% compared to the prior year period
Obtained a Proprietary Laboratory Analysis (PLA) reimbursement code for the ePlex Respiratory Pathogen Panel

“Our recently launched Blood Culture ID panels, which provide the broadest coverage of molecular targets for the detection of sepsis, are significantly bolstering our competitive position. With a highly differentiated menu and superior testing efficiency, ePlex is increasingly being recognized in the syndromic testing market as the best-in-class system for delivering high quality, patient-centered care,” said Hany Massarany, President and Chief Executive Officer. “I’m very encouraged by the momentum that our company continues to gain and I’m confident that our strong commercial team and consistent operational execution will continue to drive our performance and growth in this very attractive and rapidly growing market.”

Third Quarter Financial Results
Revenue was $20.9 million in the third quarter of 2019, an increase of 32% versus $15.8 million in the third quarter of 2018. Gross profit was $7.1 million, or 34% of revenue, compared with $5.6 million, or 36% of revenue in the same period of 2018.

Operating expenses for the third quarter of 2019 were $17.3 million compared to $16.2 million in the same period of 2018. The increase was largely due to the investment in the launch of the BCID panels.

Loss per share was $0.20 for the third quarter of 2019, compared to a $0.20 loss per share in the third quarter of 2018.

Cash and investments were $33.2 million as of September 30, 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.

The Company expects global ePlex placements to range from 170 to 190 net new analyzers with an annuity per analyzer of $135,000 to $145,000.

Gross margin is expected to be in the 31% to 33% range. Operating expenses are expected to be approximately $65 million to $70 million. Cash usage is projected to be in the range of $25 million to $30 million.

Webcast and Conference Call Information
GenMark will be hosting a conference call to discuss third quarter results in further detail on Wednesday, November 6, 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 2190875 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, achievement of profitability targets, 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)





September 30, 2019

December 31, 2018
ASSETS:
Current Assets:



Cash and cash equivalents
$
24,308


$
36,286

Short-term marketable securities
8,879


8,882

Accounts receivable, net of allowances of $131 and $75, respectively
10,448


11,534

Inventories, net
12,570


10,244

Prepaid expenses and other current assets
2,071


1,483

Total current assets
58,276


68,429





Property and equipment, net
18,863


21,070

Intangible assets, net
1,580


2,023

Restricted cash
758


758

Noncurrent operating lease right-of-use assets
4,766


—

Other long-term assets
809


701

Total assets
$
85,052


$
92,981





LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:



Accounts payable
$
10,007


$
9,886

Accrued compensation
7,720


7,358

Current operating lease liability
1,828


—

Other current liabilities
2,089


3,043

Total current liabilities
21,644


20,287





Deferred rent
—


2,996

Long-term debt
48,720


36,042

Noncurrent operating lease liability
6,071


—

Other noncurrent liabilities
55


109

Total liabilities
76,490


59,434





Stockholders' equity:



Preferred stock, $0.0001 par value; 5,000 authorized, none issued
—


—

Common stock, $0.0001 par value; 100,000 authorized; 58,044 and 56,240 shares issued and outstanding, respectively
6


6

Additional paid-in capital
512,451


500,344

Accumulated deficit
(503,946
)

(466,883
)
Accumulated other comprehensive income
51


80

Total stockholders’ equity
8,562


33,547

Total liabilities and stockholders’ equity
$
85,052


$
92,981


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,

2019

2018

2019

2018
Revenue:







Product revenue
$
20,822


$
15,713


$
60,413


$
51,156

License and other revenue
96


82


412


225

Total revenue
20,918


15,795


60,825


51,381

Cost of revenue
13,868


10,165


41,339


37,172

Gross profit
7,050


5,630


19,486


14,209

Operating expenses:







Sales and marketing
6,279


5,375


17,991


15,964

General and administrative
4,765


4,718


14,217


13,398

Research and development
6,294


6,105


20,386


22,007

Total operating expenses
17,338


16,198


52,594


51,369

Loss from operations
(10,288
)

(10,568
)

(33,108
)

(37,160
)
Other income (expense):







Interest income
126


188


438


577

Interest expense
(1,527
)

(661
)

(4,331
)

(2,246
)
Other income (expense)
(19
)

53


(34
)

(49
)
Total other income (expense)
(1,420
)

(420
)

(3,927
)

(1,718
)
Loss before provision for income taxes
(11,708
)

(10,988
)

(37,035
)

(38,878
)
Income tax (benefit) expense
(33
)

5


28


59

Net loss
$
(11,675
)

$
(10,993
)

$
(37,063
)

$
(38,937
)
Net loss per share, basic and diluted
$
(0.20
)

$
(0.20
)

$
(0.65
)

$
(0.70
)
Weighted average number of shares outstanding, basic and diluted
57,718


55,847


57,161


55,535









Other comprehensive loss:







Net loss
$
(11,675
)

$
(10,993
)

$
(37,063
)

$
(38,937
)
Other comprehensive income/(loss):







Foreign currency translation adjustments, net of tax
(46
)

(51
)

(37
)

(31
)
Net unrealized gains on marketable securities, net of tax
—


4


8


27

Total other comprehensive income
(46
)

(47
)

(29
)

(4
)
Total comprehensive loss
$
(11,721
)

$
(11,040
)

$
(37,092
)

$
(38,941
)


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



Nine Months Ended September 30,

2019

2018
Operating activities:



Net loss
$
(37,063
)

$
(38,937
)
Adjustments to reconcile net loss to net cash used in operating activities:



Depreciation and amortization
5,393


5,281

Net accretion of premiums/discounts on investments
(134
)

(110
)
Amortization of deferred debt issuance costs
1,266


725

Stock-based compensation
8,840


8,895

Provision for bad debt
93


24

Non-cash inventory adjustments
1,653


1,061

Other non-cash adjustments
175


(62
)
Changes in operating assets and liabilities:



Accounts receivable
993


797

Inventories
(5,471
)

(3,847
)
Prepaid expenses and other assets
(857
)

384

Accounts payable
345


(3,408
)
Accrued compensation
(406
)

1,053

Other current and non-current liabilities
(398
)

(756
)
Net cash used in operating activities
(25,571
)

(28,900
)
Investing activities:



Purchases of property and equipment
(1,193
)

(1,060
)
Purchases of marketable securities
(26,735
)

(28,785
)
Maturities of marketable securities
26,880


56,500

Net cash (used in) provided by investing activities
(1,048
)

26,655

Financing activities:



Proceeds from issuance of common stock, net of offering costs
2,837


535

Principal repayment of borrowings
(35,070
)

(68
)
Proceeds from borrowings
50,000


—

Payments associated with debt issuance
(3,588
)

(20
)
Proceeds from stock option exercises
432


22

Net cash provided by financing activities
14,611


469

Effect of exchange rate changes on cash, cash equivalents, and restricted cash
30


27

Net decrease in cash, cash equivalents, and restricted cash
(11,978
)

(1,749
)
Cash, cash equivalents, and restricted cash at beginning of year
37,044


27,512

Cash, cash equivalents, and restricted cash at end of period
$
25,066


$
25,763

Non-cash investing and financing activities:



Transfer of systems to property and equipment from inventory
$
1,492


$
2,477

Property and equipment included in accounts payable
$
147


$
746

Supplemental cash flow information:



Cash paid for income taxes, net
$
85


$
133

Cash paid for interest
$
2,890


$
1,517

Company Name:	GenMark Diagnostics Inc.
Stock Symbol:	GNMK
Market:	NASDAQ
Website:	genmarkdx.com

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