GenMark Diagnostics, Inc. (Nasdaq:GNMK), a leading provider of
automated, multiplex molecular diagnostic testing systems, today
reported financial results for the first quarter ended March 31, 2013.
Revenues for the quarter ending March 31, 2013 were $11.1 million
compared with $2.2 million during the first quarter of 2012. The 414%
year-over-year increase in total revenue reflects an increase in the
number of systems placed at customer sites, growth in test menus and a
significant increase in the number of tests sold. Reagent revenues for
the first quarter grew 463% year-over-year to $10.8 million from $1.9
million. Instrument and other revenues increased by 22.8% year-over-year
to $295,000 from $240,000 due mainly to capital sales of instruments.
The Company placed a net 42 analyzers during the quarter, bringing the
total installed base to 339, all in end-user laboratories within the
U.S. market.
Gross profit for the quarter ending March 31, 2013 was $6.1 million, or
55% of revenue, compared with a gross profit of $472,000, or 21.8% of
revenue for the same period in 2012. The continued improvement in gross
profit is the result of significant volume increases and manufacturing
efficiencies.
Operating expenses increased $4.3 million to $10.3 million during the
first quarter of 2013 compared with the first quarter of 2012. Selling,
General and Administrative expenses increased $912,000 year-over-year
due to the increase in revenue, headcount growth and other corporate
expenses. Research and Development expenses increased $3.4 million due
to an expansion of the R&D team, menu development for the XT-8 and
continued development work on the NexGen platform.
Net loss for the first three months of 2013 was $4.2 million, or $0.13
loss per share, compared to net loss of $5.6 million, or $0.28 loss per
share, for the prior year period.
“We significantly grew our reagents business in the first quarter by
adding new customers, increasing the number of net new analyzers, as
well as expanding menu utilization and revenue with existing customers,”
stated GenMark’s President & CEO Hany Massarany. “Furthermore, we’ve
made excellent progress toward the development of our NexGen system and
now plan to complete it in Q2, 2014.”
The Company ended the first quarter of 2013 with $45 million in cash,
cash equivalents, investments and restricted cash. The Company intends
to continue utilizing its cash balances to invest in new product and
menu development, including the development of its NexGen platform, and
for infrastructure improvements and general corporate purposes.
INVESTOR CONFERENCE CALL
GenMark will hold a conference call to discuss first quarter 2013
results and the outlook for 2013 at 4:15PM EST today. The conference
call and webcast can be accessed live through the Company's website
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 17509226 approximately five minutes prior to the start time.
ABOUT GENMARK
GenMark Diagnostics 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. GenMark currently markets four tests that
are FDA cleared for IVD use: Cystic Fibrosis Genotyping Test,
Respiratory Virus Panel, Thrombophilia Risk Test, and Warfarin
Sensitivity Test. A number of other tests, including HCV Genotyping,
2C19 Genotyping, and 3A4/3A5 Genotyping are available for research use
only. 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 growth strategy, 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 research and
development plans and timelines, including with respect to the expected
completion of our NexGen system, risks related to our history of
operating losses, the need for further financing and our ability to
access the necessary additional capital for our business, inherent risk
and uncertainty in the protection intellectual property rights, and
regulatory uncertainties regarding approval or clearance for our
products, 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.
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GenMark Diagnostics, Inc.
|
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Condensed Consolidated Balance Sheets
|
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(In thousands, except par value)
|
|
(unaudited)
|
|
|
|
|
As of
|
|
|
As of
|
|
|
|
|
March 31,
2013
|
|
|
December 31,
2012
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
32,017
|
|
|
|
$
|
51,250
|
|
|
Investments
|
|
|
|
11,786
|
|
|
|
|
-
|
|
|
Restricted Cash
|
|
|
|
1,094
|
|
|
|
|
1,343
|
|
|
Accounts receivable - net of allowance of $38 and $30
|
|
|
|
4,363
|
|
|
|
|
3,190
|
|
|
Inventories
|
|
|
|
3,175
|
|
|
|
|
1,993
|
|
|
Other current assets
|
|
|
|
382
|
|
|
|
|
226
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
52,817
|
|
|
|
|
58,002
|
|
|
Property and equipment, net
|
|
|
|
7,347
|
|
|
|
|
7,074
|
|
|
Intangible assets, net
|
|
|
|
2,566
|
|
|
|
|
1,832
|
|
|
Other long-term assets
|
|
|
|
1,108
|
|
|
|
|
1,108
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
|
63,838
|
|
|
|
$
|
68,016
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
2,315
|
|
|
|
$
|
2,445
|
|
|
Accrued compensation
|
|
|
|
1,791
|
|
|
|
|
3,076
|
|
|
Current portion of loan payable
|
|
|
|
353
|
|
|
|
|
638
|
|
|
Other current liabilities
|
|
|
|
3,515
|
|
|
|
|
3,015
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
7,974
|
|
|
|
|
9,174
|
|
|
Long-term liabilities
|
|
|
|
|
|
|
|
Loan payable, net of current portion
|
|
|
|
59
|
|
|
|
|
63
|
|
|
Other noncurrent liabilities
|
|
|
|
2,300
|
|
|
|
|
2,329
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
|
10,333
|
|
|
|
|
11,566
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity
|
|
|
|
|
|
|
|
Common stock, $0.0001 par value; 100,000 authorized; 32,750 and
32,753 shares issued
|
|
|
3
|
|
|
|
|
3
|
|
|
and outstanding as of March 31, 2013 and December 31, 2012,
respectively
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 5,000 authorized, none issued
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Additional paid-in capital
|
|
|
|
248,683
|
|
|
|
|
247,449
|
|
|
Accumulated deficit
|
|
|
|
(194,741
|
)
|
|
|
|
(190,566
|
)
|
|
Accumulated other comprehensive loss
|
|
|
|
(440
|
)
|
|
|
|
(436
|
)
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity
|
|
|
|
53,505
|
|
|
|
|
56,450
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity
|
|
|
$
|
63,838
|
|
|
|
$
|
68,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GenMark Diagnostics, Inc.
|
|
|
Condensed Consolidated Statements of Comprehensive Loss
|
|
|
(In thousands, except per share amounts)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
Product revenue
|
|
|
$
|
10,968
|
|
|
|
$
|
2,120
|
|
|
License and other revenue
|
|
|
|
133
|
|
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
|
11,101
|
|
|
|
|
2,159
|
|
|
Cost of sales
|
|
|
|
5,034
|
|
|
|
|
1,687
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
6,067
|
|
|
|
|
472
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
2,359
|
|
|
|
|
1,418
|
|
|
General and administrative
|
|
|
|
2,558
|
|
|
|
|
2,587
|
|
|
Research and development
|
|
|
|
5,381
|
|
|
|
|
1,949
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
|
10,298
|
|
|
|
|
5,954
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
|
(4,231
|
)
|
|
|
|
(5,482
|
)
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
Interest income (expense), net
|
|
|
|
68
|
|
|
|
|
(20
|
)
|
|
Other expense
|
|
|
|
(5
|
)
|
|
|
|
(24
|
)
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
|
63
|
|
|
|
|
(44
|
)
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
|
(4,168
|
)
|
|
|
|
(5,526
|
)
|
|
Provision for income taxes
|
|
|
|
(7
|
)
|
|
|
|
(32
|
)
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(4,175
|
)
|
|
|
$
|
(5,558
|
)
|
|
|
|
|
|
|
|
|
|
|
Net loss per share, basic and diluted
|
|
|
|
(0.13
|
)
|
|
|
|
(0.28
|
)
|
|
Weighted average number of shares outstanding
|
|
|
|
31,835
|
|
|
|
|
20,094
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Loss
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(4,175
|
)
|
|
|
$
|
(5,558
|
)
|
|
Net unrealized loss on investments
|
|
|
|
(4
|
)
|
|
|
-
|
|
|
Comprehensive loss
|
|
|
$
|
(4,179
|
)
|
|
|
$
|
(5,558
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GenMark Diagnostics, Inc.
|
|
Condensed Consolidated Statement of Cash Flows
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
Three months ended
|
|
|
|
|
March 31,
|
|
|
|
|
2013
|
|
|
2012
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(4,175
|
)
|
|
|
$
|
(5,558
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
498
|
|
|
|
|
264
|
|
|
Share-based compensation
|
|
|
|
697
|
|
|
|
|
506
|
|
|
Bad debt provision
|
|
|
|
29
|
|
|
|
|
(28
|
)
|
|
Non-cash inventory adjustments
|
|
|
|
403
|
|
|
|
|
(636
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
(1,202
|
)
|
|
|
|
72
|
|
|
Inventories
|
|
|
|
(1,531
|
)
|
|
|
|
757
|
|
|
Other current assets
|
|
|
|
(116
|
)
|
|
|
|
165
|
|
|
Accounts payable
|
|
|
|
129
|
|
|
|
|
(112
|
)
|
|
Accrued compensation
|
|
|
|
(856
|
)
|
|
|
|
(188
|
)
|
|
Other liabilities
|
|
|
|
20
|
|
|
|
|
(738
|
)
|
|
Net cash used in operating activities
|
|
|
|
(6,104
|
)
|
|
|
|
(5,496
|
)
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
Restricted cash
|
|
|
|
249
|
|
|
|
|
-
|
|
|
Purchase of available-for-sale securities
|
|
|
|
(13,848
|
)
|
|
|
|
-
|
|
|
Payments for intellectual property licenses
|
|
|
|
(345
|
)
|
|
|
|
(739
|
)
|
|
Purchases of property and equipment
|
|
|
|
(1,003
|
)
|
|
|
|
(17
|
)
|
|
Proceeds from sales of marketable securities
|
|
|
|
2,000
|
|
|
|
|
-
|
|
|
Maturity of short-term investment
|
|
|
|
-
|
|
|
|
|
5,000
|
|
|
Net cash (used in) provided by investing activities
|
|
|
|
(12,947
|
)
|
|
|
|
4,244
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
Principal repayment of borrowings
|
|
|
|
(287
|
)
|
|
|
|
(267
|
)
|
|
Proceeds from stock exercises
|
|
|
|
105
|
|
|
|
|
-
|
|
|
Net cash used in financing activities
|
|
|
|
(182
|
)
|
|
|
|
(267
|
)
|
|
Net decrease in cash and cash equivalents
|
|
|
|
(19,233
|
)
|
|
|
|
(1,519
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
51,250
|
|
|
|
|
25,320
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
32,017
|
|
|
|
$
|
23,801
|
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
Property and equipment purchased with capital lease
|
|
|
$
|
-
|
|
|
|
$
|
109
|
|
|
Transfer of systems from property and equipment into inventory
|
|
|
$
|
54
|
|
|
|
$
|
47
|
|
|
Property and equipment costs incurred but not paid included in other
current liabilities
|
|
|
$
|
333
|
|
|
|
$
|
728
|
|
|
Intellectual property acquisition included in accrued liabilities
|
|
|
$
|
453
|
|
|
|
$
|
-
|
|
|
Supplemental cash flow disclosures:
|
|
|
|
|
|
|
|
Cash received for interest
|
|
|
$
|
75
|
|
|
|
$
|
-
|
|
|
Cash paid for interest
|
|
|
$
|
7
|
|
|
|
$
|
-
|
|
