Fourth Quarter Revenue increased 34% Versus Prior Year to $13.2
million
Fourth Quarter Gross Margin Increased to 64%, and XT-8 Installed Base
Grew by 17 to 633
ePlex Production Capacity Increased to Support Upcoming European
Launch
Additional Time Likely Required to Address Remaining ePlex
Manufacturing Variability
GenMark Diagnostics, Inc. (Nasdaq:GNMK), a leading provider of
automated, multiplex molecular diagnostic testing systems, today
announced financial results for the fourth quarter and year ended
December 31, 2015.
Revenue for the fourth quarter of 2015 was $13.2 million, an increase of
34% over the prior year period. Full year 2015 revenue grew to $39.4
million, an increase of 29% versus 2014. During the quarter, 17
additional XT-8 analyzers were placed in end-user laboratories,
resulting in a total installed base of 633 analyzers within the U.S.
market at year end.
Gross profit for the fourth quarter was $8.5 million, or 64% of revenue,
compared with $6.0 million, or 61% of revenue in the same period of
2014. Full year 2015 gross profit was $24.1 million, or 61% of revenue.
“Our strong fourth quarter results concluded a remarkable year of robust
revenue growth and improved profitability. This is a clear testament to
the capability and effectiveness of our Operations and Commercial
teams,” said Hany Massarany, President and Chief Executive Officer of
GenMark. “We believe that we’re very close to launching ePlex in Europe.
We’ve demonstrated with thousands of ePlex cartridges across multiple
manufacturing lots that we are capable of achieving the required level
of product performance and scale to support the European launch, and
we’re confident that we will soon be able to successfully accomplish
this important milestone. However, we will likely need additional time
beyond the first quarter to address some remaining sources of
manufacturing variability, which have become more evident with the
recent doubling of manufacturing volume,” added Massarany.
Operating expenses for the fourth quarter of 2015 were $17.0 million
compared to $14.7 million in the same period for 2014. The increase was
mainly driven by Research and Development expenses as the Company
continues to develop assays on the ePlex system. For the full year, 2015
operating expenses were $65.6 million, an increase of $9.1 million over
2014 primarily driven by Research and Development investment in ePlex.
Loss per share was $0.21 per share for the fourth quarter of 2015
compared to a loss of $0.21 per share in the same period of 2014. For
the full year 2015, loss per share was $1.00.
The Company ended the year with $45.5 million in cash and cash
equivalents and intends to continue utilizing its cash balances to
invest in the global commercialization of the ePlex system. As
previously announced, the Company also established a debt facility for
up to $40 million to provide additional capital to launch ePlex
internationally as well as domestically.
Business Outlook
For full year 2016, the Company expects revenue in the range of $47 to
$51 million and Gross Margin in the range of 53-55%.
The Company will be hosting a conference call to discuss fourth quarter
results in further detail and release 2016 guidance on Tuesday, February
23, 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 21688003 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 our future financial performance, the timely
commercialization of our ePlex system, and the availability of future
financing, 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.
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(In thousands, except par value)
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
|
2015
|
|
2014
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
35,385
|
|
|
$
|
36,855
|
|
|
Marketable securities
|
|
10,080
|
|
|
33,651
|
|
|
Accounts receivable, net of allowances of $2,727 and $2,702,
respectively
|
|
6,847
|
|
|
4,889
|
|
|
Inventories
|
|
3,054
|
|
|
2,137
|
|
|
Prepaid expenses and other current assets
|
|
591
|
|
|
575
|
|
|
Total current assets
|
|
55,957
|
|
|
78,107
|
|
|
Non-current assets
|
|
|
|
|
|
Property and equipment, net
|
|
11,396
|
|
|
11,052
|
|
|
Intangible assets, net
|
|
2,376
|
|
|
1,870
|
|
|
Restricted cash
|
|
758
|
|
|
758
|
|
|
Other long-term assets
|
|
180
|
|
|
183
|
|
|
Total assets
|
|
$
|
70,667
|
|
|
$
|
91,970
|
|
|
Current liabilities
|
|
|
|
|
|
Accounts payable
|
|
$
|
4,376
|
|
|
$
|
5,111
|
|
|
Accrued compensation
|
|
3,861
|
|
|
5,187
|
|
|
Other current liabilities
|
|
2,352
|
|
|
1,995
|
|
|
Total current liabilities
|
|
10,589
|
|
|
12,293
|
|
|
Long-term liabilities
|
|
|
|
|
|
Deferred rent
|
|
1,257
|
|
|
1,445
|
|
|
Long-term debt
|
|
9,890
|
|
|
—
|
|
|
Other non-current liabilities
|
|
334
|
|
|
208
|
|
|
Total liabilities
|
|
22,070
|
|
|
13,946
|
|
|
Stockholders’ equity
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 5,000 authorized, none issued
|
|
—
|
|
|
—
|
|
|
Common stock, $0.0001 par value; 100,000 authorized; 42,551 and
41,859 shares issued and outstanding as of December 31, 2015 and
December 31, 2014, respectively
|
|
4
|
|
|
4
|
|
|
Additional paid-in capital
|
|
353,233
|
|
|
340,502
|
|
|
Accumulated deficit
|
|
(304,669
|
)
|
|
(262,472
|
)
|
|
Accumulated other comprehensive income (loss)
|
|
29
|
|
|
(10
|
)
|
|
Total stockholders’ equity
|
|
48,597
|
|
|
78,024
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
70,667
|
|
|
$
|
91,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENMARK DIAGNOSTICS, INC.
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
|
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31
|
|
Twelve Month Ended
December 31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Revenue
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
Product revenue
|
|
$
|
13,085
|
|
|
$
|
9,735
|
|
|
$
|
39,029
|
|
|
$
|
30,328
|
|
|
License and other revenue
|
|
101
|
|
|
91
|
|
|
382
|
|
|
266
|
|
|
Total revenue
|
|
13,186
|
|
|
9,826
|
|
|
39,411
|
|
|
30,594
|
|
|
Cost of revenue
|
|
4,688
|
|
|
3,827
|
|
|
15,317
|
|
|
13,127
|
|
|
Gross profit
|
|
8,498
|
|
|
5,999
|
|
|
24,094
|
|
|
17,467
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
3,400
|
|
|
3,112
|
|
|
14,385
|
|
|
12,629
|
|
|
General and administrative
|
|
3,379
|
|
|
3,018
|
|
|
13,772
|
|
|
12,069
|
|
|
Research and development
|
|
10,180
|
|
|
8,526
|
|
|
37,472
|
|
|
31,823
|
|
|
Total operating expenses
|
|
16,959
|
|
|
14,656
|
|
|
65,629
|
|
|
56,521
|
|
|
Loss from operations
|
|
(8,461
|
)
|
|
(8,657
|
)
|
|
(41,535
|
)
|
|
(39,054
|
)
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
25
|
|
|
37
|
|
|
125
|
|
|
244
|
|
|
Interest expense
|
|
(273
|
)
|
|
(1
|
)
|
|
(880
|
)
|
|
(20
|
)
|
|
Other income (expense)
|
|
(59
|
)
|
|
27
|
|
|
133
|
|
|
(6
|
)
|
|
Total other income (expense)
|
|
(307
|
)
|
|
63
|
|
|
(622
|
)
|
|
218
|
|
|
Loss before provision for income taxes
|
|
(8,768
|
)
|
|
(8,594
|
)
|
|
(42,157
|
)
|
|
(38,836
|
)
|
|
Income tax expense (benefit)
|
|
14
|
|
|
18
|
|
|
40
|
|
|
(573
|
)
|
|
Net loss
|
|
$
|
(8,782
|
)
|
|
$
|
(8,612
|
)
|
|
$
|
(42,197
|
)
|
|
$
|
(38,263
|
)
|
|
Net loss per share, basic and diluted
|
|
$
|
(0.21
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(1.00
|
)
|
|
$
|
(0.93
|
)
|
|
Weighted average number of shares outstanding basic and diluted
|
|
42,429
|
|
|
41,569
|
|
|
42,157
|
|
|
41,346
|
|
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(8,782
|
)
|
|
$
|
(8,612
|
)
|
|
$
|
(42,197
|
)
|
|
$
|
(38,263
|
)
|
|
Foreign currency translation adjustments
|
|
(44
|
)
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
Net unrealized losses on marketable securities, net of tax
|
|
17
|
|
|
(14
|
)
|
|
(3
|
)
|
|
(20
|
)
|
|
Comprehensive loss
|
|
$
|
(8,809
|
)
|
|
$
|
(8,626
|
)
|
|
$
|
(42,236
|
)
|
|
$
|
(38,283
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENMARK DIAGNOSTICS, INC.
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In thousands)
|
|
|
|
|
|
|
|
Years ended December 31,
|
|
|
|
2015
|
|
2014
|
|
2013
|
|
Operating activities:
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(42,197
|
)
|
|
$
|
(38,263
|
)
|
|
$
|
(33,643
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
3,405
|
|
|
2,656
|
|
|
2,530
|
|
|
Amortization of premiums on investments
|
|
180
|
|
|
702
|
|
|
314
|
|
|
Amortization of deferred debt issuance costs
|
|
285
|
|
|
—
|
|
|
—
|
|
|
Stock-based compensation
|
|
9,995
|
|
|
5,796
|
|
|
3,893
|
|
|
Provision for bad debt
|
|
25
|
|
|
—
|
|
|
2,721
|
|
|
Non-cash inventory adjustments
|
|
594
|
|
|
450
|
|
|
1,779
|
|
|
Gain on sale of investment in preferred stock
|
|
(223
|
)
|
|
—
|
|
|
(1,392
|
)
|
|
Elimination of cumulative foreign currency translation adjustments
upon liquidation of foreign subsidiary
|
|
—
|
|
|
—
|
|
|
450
|
|
|
Impairment of intangible asset
|
|
—
|
|
|
—
|
|
|
1,624
|
|
|
Other non-cash adjustments
|
|
186
|
|
|
185
|
|
|
—
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(1,983
|
)
|
|
(2,030
|
)
|
|
(2,390
|
)
|
|
Inventories
|
|
(1,286
|
)
|
|
(229
|
)
|
|
(1,313
|
)
|
|
Prepaid expenses and other assets
|
|
(36
|
)
|
|
(184
|
)
|
|
(119
|
)
|
|
Accounts payable
|
|
(757
|
)
|
|
85
|
|
|
1,343
|
|
|
Accrued compensation
|
|
(458
|
)
|
|
1,797
|
|
|
951
|
|
|
Other liabilities
|
|
355
|
|
|
(537
|
)
|
|
(544
|
)
|
|
Net cash used in operating activities
|
|
(31,915
|
)
|
|
(29,572
|
)
|
|
(23,796
|
)
|
|
Investing activities
|
|
|
|
|
|
|
|
Change in restricted cash
|
|
—
|
|
|
—
|
|
|
585
|
|
|
Payments for intellectual property licenses
|
|
(550
|
)
|
|
(350
|
)
|
|
(882
|
)
|
|
Purchases of property and equipment
|
|
(3,756
|
)
|
|
(5,726
|
)
|
|
(4,270
|
)
|
|
Purchases of marketable securities
|
|
(22,646
|
)
|
|
(28,054
|
)
|
|
(76,190
|
)
|
|
Proceeds from sales of marketable securities
|
|
223
|
|
|
7,497
|
|
|
6,643
|
|
|
Maturities of marketable securities
|
|
46,050
|
|
|
56,050
|
|
|
1,550
|
|
|
Net cash provided by (used in) investing activities
|
|
19,321
|
|
|
29,417
|
|
|
(72,564
|
)
|
|
Financing activities
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
884
|
|
|
812
|
|
|
86,547
|
|
|
Costs incurred in conjunction with public offering
|
|
—
|
|
|
—
|
|
|
(5,510
|
)
|
|
Principal repayment of borrowings
|
|
(22
|
)
|
|
(56
|
)
|
|
(766
|
)
|
|
Costs associated with debt issuance
|
|
(718
|
)
|
|
—
|
|
|
—
|
|
|
Proceeds from borrowings
|
|
10,000
|
|
|
—
|
|
|
166
|
|
|
Proceeds from stock option exercises
|
|
989
|
|
|
531
|
|
|
396
|
|
|
Net cash provided by financing activities
|
|
11,133
|
|
|
1,287
|
|
|
80,833
|
|
|
Effect of exchange rate changes on cash
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
(1,470
|
)
|
|
1,132
|
|
|
(15,527
|
)
|
|
Cash and cash equivalents at beginning of year
|
|
36,855
|
|
|
35,723
|
|
|
51,250
|
|
|
Cash and cash equivalents at end of year
|
|
$
|
35,385
|
|
|
$
|
36,855
|
|
|
$
|
35,723
|
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
Transfer of systems from property and equipment into inventory
|
|
$
|
225
|
|
|
$
|
256
|
|
|
$
|
575
|
|
|
Property and equipment costs incurred but not paid included in
accounts payable
|
|
$
|
146
|
|
|
$
|
124
|
|
|
$
|
603
|
|
|
Intellectual property acquisition included in accrued expenses
|
|
$
|
800
|
|
|
$
|
550
|
|
|
$
|
450
|
|
|
Offering costs incurred but not paid included in other liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
65
|
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
572
|
|
|
$
|
20
|
|
|
$
|
19
|
|
|
Cash received for interest
|
|
$
|
305
|
|
|
$
|
244
|
|
|
$
|
403
|
|
|
Cash paid for income taxes, net
|
|
$
|
10
|
|
|
$
|
24
|
|
|
$
|
21
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160223006718/en/
Copyright Business Wire 2016