Third Quarter Revenue Increased 28% Versus
Prior Year to $10.8 millionePlex® Gaining
Momentum in Europe; Preparation for U.S. Launch
UnderwayePlex Clinical Sample Testing Completed at Clinical
Study Sites; Q4 FDA Submission on TrackCompleted $29 Million
ATM Offering; Ended Q3 with Cash Balance of $54.2 million
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, 2016.
Revenue for the third quarter of 2016 was $10.8 million, an
increase of 28% over the prior year period.
Gross profit for the third quarter of 2016 was $6.5 million, or
60% of revenue, compared with $5.1 million, or 60% of revenue in
the same period of 2015.
“In addition to continued strong performance from XT-8 in the
USA, during the third quarter we also realized our first ePlex
revenues in Europe. Over the past few months, our ePlex
commercialization efforts have been highly effective. Since our
last update, we have more than doubled the number of ePlex customer
agreements to more than thirty. Our global funnel of ePlex
opportunities continues to strengthen, and customer feedback
remains very positive,” said Hany Massarany, President and Chief
Executive Officer of GenMark. “Furthermore, we recently completed
the testing of clinical samples required for 510(k) clearance of
the ePlex instrument and its Respiratory Pathogen (RP) panel. Our
teams are now preparing clinical study reports for submission to
the FDA this quarter, in line with our expectations. Additionally,
we raised $29 million of cash during the quarter in an
at-the-market (ATM) equity offering of common stock further
strengthening our balance sheet,” added Massarany.
Operating expenses for the third quarter of 2016 were $18.1
million compared to $16.2 million in the same period for 2015. The
increase was mainly driven by research and development expenses as
efforts continued towards the launch of ePlex.
Loss per share was $0.27 per share for the third quarter of
2016, consistent with the same period of 2015.
The Company ended the quarter with $54.2 million in cash and
cash equivalents and intends to continue utilizing its cash
balances to invest in the global commercialization of the ePlex
system. The Company's existing debt facility can provide up to an
additional $20 million to support the launch of ePlex
internationally as well as domestically.
Business Outlook
For full year 2016, the Company continues to expect revenue in
the range of $47 to $51 million and gross margin in the range of
57% to 59%.
The Company will host a conference call to discuss third quarter
results in further detail on Thursday, November 3, 2016 starting at
4:30 p.m. Eastern Time. 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 3270495
approximately five minutes prior to the start time.
ABOUT GENMARK DIAGNOSTICS
GenMark Diagnostics (NASDAQ: GNMK) is a leading provider of
automated, multiplex molecular diagnostic testing systems that
detect and measure DNA and RNA targets to diagnose disease and
optimize patient treatment. Utilizing GenMark’s proprietary
eSensor® detection technology, GenMark’s eSensor XT-8® system is
designed to support a broad range of molecular diagnostic tests
with a compact, easy-to-use workstation and self-contained,
disposable test cartridges. The eSensor detection technology is
also incorporated into GenMark’s sample-to-answer system, ePlex®.
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 the timely FDA
clearance and commercialization of our ePlex system and our future
financial performance, 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.
GENMARK DIAGNOSTICS, INC. UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS (In thousands, except par
value) September 30, December
31, 2016 2015
Current assets Cash and cash equivalents $ 19,293 $ 35,385
Marketable securities 34,860 10,080 Accounts receivable, net of
allowances of $2,740 and $2,727, respectively 5,115 6,847
Inventories 4,216 3,054 Prepaid expenses and other current assets
1,192 591
Total current assets
64,676 55,957 Property and equipment, net 17,335 11,396 Intangible
assets, net 2,795 2,376 Restricted cash 758 758 Other long-term
assets 175 180
Total assets $
85,739 $ 70,667
Current liabilities Accounts
payable $ 5,392 $ 4,376 Accrued compensation 5,227 3,861 Current
portion of long-term debt 5,403 (373 ) Other current liabilities
3,804 2,725
Total current
liabilities 19,826 10,589
Long-term liabilities
Deferred rent 3,781 1,257 Long-term debt 14,302 9,890 Other
non-current liabilities 202 334
Total liabilities 38,111 22,070
Stockholders’ equity Preferred stock, $0.0001 par value;
5,000 authorized, none issued — — Common stock, $0.0001 par value;
100,000 authorized; 46,402 and 42,551 shares issued and outstanding
as of September 30, 2016 and December 31, 2015, respectively 5 4
Additional paid-in capital 390,194 353,233 Accumulated deficit
(342,593 ) (304,669 ) Accumulated other comprehensive income
22 29
Total stockholders’ equity
47,628 48,597
Total liabilities and
stockholders’ equity $ 85,739 $ 70,667
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, 2016 2015
2016 2015
Revenue Product revenue $ 10,727 $ 8,382 $ 34,111 $ 25,944
License and other revenue 86 90
278 281
Total revenue 10,813 8,472
34,389 26,225 Cost of revenue 4,362 3,352
13,457 10,630
Gross
profit 6,451 5,120 20,932 15,595
Operating expenses
Sales and marketing 3,223 3,587 10,232 10,984 General and
administrative 3,227 3,061 10,522 10,393 Research and development
11,628 9,589 37,100
27,292
Total operating expenses 18,078
16,237 57,854 48,669
Loss from operations (11,627 ) (11,117
) (36,922 ) (33,074 )
Other income (expense)
Interest income 43 30 98 99 Interest expense (476 ) (289 ) (1,061 )
(607 ) Other income (expense) 16 (14 )
7 193
Total other income (expense)
(417 ) (273 ) (956 ) (315 )
Loss before provision for income taxes (12,044 ) (11,390 )
(37,878 ) (33,389 ) Income tax expense 14 4
45 26
Net loss $ (12,058
) $ (11,394 ) $ (37,923 ) $ (33,415 ) Net loss per share, basic and
diluted $ (0.27 ) $ (0.27 ) $ (0.88 ) $ (0.79 ) Weighted average
number of shares outstanding, basic and diluted 44,377
42,312 43,308 42,061
Other comprehensive loss Net loss $ (12,058 ) $
(11,394 ) $ (37,923 ) $ (33,415 ) Foreign currency translation
adjustments (4 ) (1 ) 9 8 Net unrealized gains (losses) on
marketable securities, net of tax 20 (4 )
(2 ) (20 )
Comprehensive loss $ (12,042 ) $
(11,399 ) $ (37,916 ) $ (33,427 )
GENMARK DIAGNOSTICS,
INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (In thousands) Nine Months Ended
September 30, 2016
2015 Operating activities Net loss $ (37,923 )
$ (33,415 ) Adjustments to reconcile net loss to net cash used in
operating activities: Depreciation and amortization 2,739 2,500
Amortization of premiums on investments 61 157 Amortization of
deferred debt issuance costs 277 199 Gain on sale of investment in
preferred stock (9 ) (223 ) Stock-based compensation 6,788 7,347
Provision for bad debt 13 — Non-cash inventory adjustments 120 567
Other non-cash adjustments 20 9 Changes in operating assets and
liabilities: Accounts receivable 1,719 557 Inventories (1,048 )
(980 ) Prepaid expenses and other assets (596 ) (320 ) Accounts
payable 916 (358 ) Accrued compensation 1,731 575 Other liabilities
33 (295 )
Net cash used in operating
activities (25,159 ) (23,680 )
Investing activities
Payments for intellectual property licenses (800 ) (550 ) Purchases
of property and equipment (5,105 ) (2,868 ) Purchases of marketable
securities (32,895 ) (14,797 ) Proceeds from sales of marketable
securities 9 223 Maturities of marketable securities 8,050
28,350
Net cash provided by (used in)
investing activities (30,741 ) 10,358
Financing
activities Proceeds from issuance of common stock 30,448 427
Costs incurred in conjunction with stock issuance (1,091 ) —
Principal repayment of borrowings (28 ) (15 ) Proceeds from
borrowings 10,000 10,000 Costs associated with debt issuance (30 )
(718 ) Proceeds from stock option exercises 507
986
Net cash provided by financing activities
39,806 10,680
Effect of exchange
rate changes on cash 2 (1 )
Net decrease in cash and cash
equivalents (16,092 ) (2,643 ) Cash and cash equivalents at
beginning of period 35,385 36,855 Cash
and cash equivalents at end of period $ 19,293 $ 34,212
Non-cash investing and financing activities Transfer
of instruments from property and equipment to inventory $ 234 $ 165
Property and equipment costs included in accounts payable $ 1,040 $
248 Intellectual property acquisitions included in other current
liabilities $ 700 $ 800
Supplemental cash flow disclosures
Cash paid for income taxes, net $ 38 $ 9 Cash received for interest
$ 58 $ 256 Cash paid for interest $ 761 $ 607
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161103006497/en/
GenMark Diagnostics, Inc.Hany MassaranyPresident/Chief Executive
Officer760-448-4325
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