GenMark Diagnostics Reports Third Quarter 2017 Results
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, 2017.
Third Quarter Highlights
- Placed 65 ePlex® analyzers in the third quarter, mostly driven by first full quarter of
U.S. launch
- Finished the quarter with an installed base of 147 ePlex analyzers in U.S. and European labs
- Achieved revenues of $11.6 million in the quarter, an increase of 7.3% over the prior year
period
“We are pleased with our first full quarter of ePlex launch in the U.S., which drove the majority of placements in the third
quarter,” said Hany Massarany, President and Chief Executive Officer. “With strong sales funnels and continued positive customer
feedback regarding the overall performance of ePlex, we remain optimistic about our opportunity to accelerate our revenue growth
rate and capture market share in the global multiplex molecular diagnostics market.”
Third Quarter Financial Results
Revenue was $11.6 million in the third quarter of 2017, an increase of 7.3% versus $10.7 million in the third quarter of 2016.
Gross profit was $4.2 million, or 36% of revenue, compared with $6.5 million, or 60% of revenue in the same period of 2016.
Operating expenses for the third quarter of 2017 were $18.9 million compared to $18.1 million in the same period for 2016. The
increase was mainly driven by sales and marketing expenses as the Company continues to expand its commercial organization in
support of the global ePlex product launch.
Loss per share was $0.28 per share for the third quarter of 2017, compared to a $0.27 loss per share in the third quarter of
2016.
The Company ended the quarter with $86.9 million in cash and investments.
Business Outlook
For full year 2017, GenMark expects revenue to range from $51 - $53 million and gross margin to range from 38% to 40%. The
Company expects to exit 2017 with 185-200 ePlex placements.
Webcast and Conference Call Information
The Company will be hosting a conference call to discuss third quarter results in further detail on Thursday, November 2, 2017
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
89238764 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 our
future operating results and financial position. Such statements, including, but not limited to, those regarding our future
financial performance, regulatory submissions and approvals, and the timely and effective commercialization and clinical impact of
our ePlex system, 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, |
|
|
2017 |
|
2016 |
| Current assets |
|
|
|
|
| Cash and cash equivalents |
|
$ |
27,161 |
|
|
$ |
15,959 |
|
| Marketable securities |
|
|
59,756 |
|
|
|
25,607 |
|
| Accounts receivable, net of allowances of $2,792 and $2,740, respectively |
|
|
7,800 |
|
|
|
9,048 |
|
| Inventories |
|
|
7,109 |
|
|
|
6,633 |
|
| Prepaid expenses and other current assets |
|
|
1,971 |
|
|
|
1,202 |
|
| Total current assets |
|
|
103,797 |
|
|
|
58,449 |
|
| Property and equipment, net |
|
|
21,586 |
|
|
|
18,268 |
|
| Intangible assets, net |
|
|
2,772 |
|
|
|
2,670 |
|
| Restricted cash |
|
|
758 |
|
|
|
758 |
|
| Other long-term assets |
|
|
194 |
|
|
|
179 |
|
| Total assets |
|
$ |
129,107 |
|
|
$ |
80,324 |
|
| Current liabilities |
|
|
|
|
| Accounts payable |
|
$ |
7,242 |
|
|
$ |
8,703 |
|
| Accrued compensation |
|
|
5,227 |
|
|
|
5,650 |
|
| Loan payable |
|
|
19,548 |
|
|
|
7,935 |
|
| Other current liabilities |
|
|
2,923 |
|
|
|
4,133 |
|
| Total current liabilities |
|
|
34,940 |
|
|
|
26,421 |
|
| Long-term liabilities |
|
|
|
|
| Deferred rent |
|
|
3,225 |
|
|
|
3,652 |
|
| Long-term debt |
|
|
9,918 |
|
|
|
11,880 |
|
| Other non-current liabilities |
|
|
387 |
|
|
|
220 |
|
| Total liabilities |
|
|
48,470 |
|
|
|
42,173 |
|
| Stockholders’ equity |
|
|
|
|
| Preferred stock, $0.0001 par value; 5,000 authorized, none issued |
|
|
— |
|
|
|
— |
|
| Common stock, $0.0001 par value; 100,000 authorized; 54,792 and 46,554 shares issued
and outstanding as of September 30, 2017 and December 31, 2016, respectively |
|
|
5 |
|
|
|
4 |
|
| Additional paid-in capital |
|
|
483,242 |
|
|
|
393,322 |
|
| Accumulated deficit |
|
|
(402,584 |
) |
|
|
(355,270 |
) |
| Accumulated other comprehensive income |
|
|
(26 |
) |
|
|
95 |
|
| Total stockholders’ equity |
|
|
80,637 |
|
|
|
38,151 |
|
| Total liabilities and stockholders’ equity |
|
$ |
129,107 |
|
|
$ |
80,324 |
|
|
|
|
|
|
|
|
|
|
| |
| 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, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| Revenue |
|
|
|
|
|
|
|
|
| Product revenue |
|
$ |
11,552 |
|
|
$ |
10,727 |
|
|
$ |
36,313 |
|
|
$ |
34,111 |
|
| License and other revenue |
|
|
51 |
|
|
|
86 |
|
|
|
184 |
|
|
|
278 |
|
| Total revenue |
|
|
11,603 |
|
|
|
10,813 |
|
|
|
36,497 |
|
|
|
34,389 |
|
| Cost of revenue |
|
|
7,400 |
|
|
|
4,362 |
|
|
|
21,227 |
|
|
|
13,457 |
|
| Gross profit |
|
|
4,203 |
|
|
|
6,451 |
|
|
|
15,270 |
|
|
|
20,932 |
|
| Operating expenses |
|
|
|
|
|
|
|
|
| Sales and marketing |
|
|
5,121 |
|
|
|
3,223 |
|
|
|
14,974 |
|
|
|
10,232 |
|
| General and administrative |
|
|
3,565 |
|
|
|
3,227 |
|
|
|
11,553 |
|
|
|
10,522 |
|
| Research and development |
|
|
10,248 |
|
|
|
11,628 |
|
|
|
34,297 |
|
|
|
37,100 |
|
| Total operating expenses |
|
|
18,934 |
|
|
|
18,078 |
|
|
|
60,824 |
|
|
|
57,854 |
|
| Loss from operations |
|
|
(14,731 |
) |
|
|
(11,627 |
) |
|
|
(45,554 |
) |
|
|
(36,922 |
) |
| Other income (expense) |
|
|
|
|
|
|
|
|
| Interest income |
|
|
247 |
|
|
|
43 |
|
|
|
353 |
|
|
|
98 |
|
| Interest expense |
|
|
(1,009 |
) |
|
|
(476 |
) |
|
|
(2,270 |
) |
|
|
(1,061 |
) |
| Other income |
|
|
76 |
|
|
|
16 |
|
|
|
227 |
|
|
|
7 |
|
| Total other income (expense) |
|
|
(686 |
) |
|
|
(417 |
) |
|
|
(1,690 |
) |
|
|
(956 |
) |
| Loss before provision for income taxes |
|
|
(15,417 |
) |
|
|
(12,044 |
) |
|
|
(47,244 |
) |
|
|
(37,878 |
) |
| Income tax expense (benefit) |
|
|
(9 |
) |
|
|
14 |
|
|
|
68 |
|
|
|
45 |
|
| Net loss |
|
$ |
(15,408 |
) |
|
$ |
(12,058 |
) |
|
$ |
(47,312 |
) |
|
$ |
(37,923 |
) |
| Net loss per share, basic and diluted |
|
$ |
(0.28 |
) |
|
$ |
(0.27 |
) |
|
$ |
(0.95 |
) |
|
$ |
(0.88 |
) |
| Weighted average number of shares outstanding, basic and diluted |
|
|
54,726 |
|
|
|
44,377 |
|
|
|
49,908 |
|
|
|
43,308 |
|
| Other comprehensive loss |
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(15,408 |
) |
|
$ |
(12,058 |
) |
|
$ |
(47,312 |
) |
|
$ |
(37,923 |
) |
| Foreign currency translation adjustments |
|
|
51 |
|
|
|
(4 |
) |
|
|
145 |
|
|
|
9 |
|
| Net unrealized gains (losses) on marketable securities, net of tax |
|
|
(9 |
) |
|
|
20 |
|
|
|
(24 |
) |
|
|
(2 |
) |
| Comprehensive loss |
|
$ |
(15,366 |
) |
|
$ |
(12,042 |
) |
|
$ |
(47,191 |
) |
|
$ |
(37,916 |
) |
|
|
|
|
|
|
|
|
|
| |
| GENMARK DIAGNOSTICS, INC. |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In thousands) |
| |
|
|
Nine Months Ended September 30, |
|
|
2017 |
|
2016 |
| Operating activities |
|
|
|
|
| Net loss |
|
$ |
(47,312 |
) |
|
$ |
(37,923 |
) |
| Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
| Depreciation and amortization |
|
|
3,811 |
|
|
|
2,739 |
|
| Amortization of premiums on investments |
|
|
4 |
|
|
|
61 |
|
| Amortization of deferred debt issuance costs |
|
|
891 |
|
|
|
277 |
|
| Gain on sale of investment in preferred stock |
|
|
— |
|
|
|
(9 |
) |
| Stock-based compensation |
|
|
8,386 |
|
|
|
6,788 |
|
| Provision for bad debt |
|
|
51 |
|
|
|
13 |
|
| Non-cash inventory adjustments |
|
|
911 |
|
|
|
120 |
|
| Other non-cash adjustments |
|
|
(190 |
) |
|
|
20 |
|
| Changes in operating assets and liabilities: |
|
|
|
|
| Accounts receivable |
|
|
1,272 |
|
|
|
1,719 |
|
| Inventories |
|
|
(4,813 |
) |
|
|
(1,048 |
) |
| Prepaid expenses and other assets |
|
|
(767 |
) |
|
|
(596 |
) |
| Other long-term assets |
|
|
(16 |
) |
|
|
— |
|
| Accounts payable |
|
|
(1,468 |
) |
|
|
916 |
|
| Accrued compensation |
|
|
(452 |
) |
|
|
1,731 |
|
| Other liabilities |
|
|
(913 |
) |
|
|
33 |
|
| Net cash used in operating activities |
|
|
(40,605 |
) |
|
|
(25,159 |
) |
| Investing activities |
|
|
|
|
| Payments for intellectual property licenses |
|
|
(500 |
) |
|
|
(800 |
) |
| Purchases of property and equipment |
|
|
(3,816 |
) |
|
|
(5,105 |
) |
| Purchases of marketable securities |
|
|
(56,525 |
) |
|
|
(32,895 |
) |
| Proceeds from sales of marketable securities |
|
|
13,896 |
|
|
|
9 |
|
| Maturities of marketable securities |
|
|
8,500 |
|
|
|
8,050 |
|
| Net cash used in investing activities |
|
|
(38,445 |
) |
|
|
(30,741 |
) |
| Financing activities |
|
|
|
|
| Proceeds from issuance of common stock |
|
|
86,835 |
|
|
|
30,448 |
|
| Costs incurred in conjunction with stock issuance |
|
|
(5,469 |
) |
|
|
(1,091 |
) |
| Principal repayment of borrowings |
|
|
(6,123 |
) |
|
|
(28 |
) |
| Proceeds from borrowings |
|
|
15,000 |
|
|
|
10,000 |
|
| Costs associated with debt issuance |
|
|
(187 |
) |
|
|
(30 |
) |
| Proceeds from stock option exercises |
|
|
213 |
|
|
|
507 |
|
| Net cash provided by financing activities |
|
|
90,269 |
|
|
|
39,806 |
|
| Effect of exchange rate changes on cash |
|
|
(17 |
) |
|
|
2 |
|
| Net increase (decrease) in cash and cash equivalents |
|
|
11,202 |
|
|
|
(16,092 |
) |
| Cash and cash equivalents at beginning of period |
|
|
15,959 |
|
|
|
35,385 |
|
| Cash and cash equivalents at end of period |
|
$ |
27,161 |
|
|
$ |
19,293 |
|
| Non-cash investing and financing activities |
|
|
|
|
| Transfer of instruments from (to) property and equipment to (from) inventory |
|
$ |
(3,438 |
) |
|
$ |
234 |
|
| Property and equipment costs included in accounts payable |
|
$ |
330 |
|
|
$ |
1,040 |
|
| Intellectual property acquisitions included in other current liabilities |
|
$ |
— |
|
|
$ |
700 |
|
| Supplemental cash flow disclosures |
|
|
|
|
| Cash paid for income taxes, net |
|
$ |
58 |
|
|
$ |
38 |
|
| Cash received for interest |
|
$ |
367 |
|
|
$ |
58 |
|
| Cash paid for interest |
|
$ |
1,143 |
|
|
$ |
761 |
|
|
|
|
|
|
Investor Relations Contact
GenMark Diagnostics, Inc.
Lynn Pieper Lewis or Leigh Salvo
(415) 937-5404
ir@genmarkdx.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20171102006463/en/