Fourth Quarter Revenue Increased 13% Versus
Prior Year to $14.9 million
Full Year Revenue Grew by 25% to $49.3
million
Submitted FDA 510(k) Applications for ePlex
Instrument and Respiratory Pathogen Panel
Ended 2016 with More Than 55 Customer
Agreements, Representing Over 85 ePlex Instruments
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, 2016.
Revenue for the fourth quarter of 2016 was $14.9 million, an
increase of 13% over the prior year period. Full year 2016 revenue
grew to $49.3 million, an increase of 25% versus 2015. Annuity per
XT-8 analyzer was $86 thousand in the fourth quarter and
approximately $74 thousand per analyzer over the last 4
quarters.
Gross profit for the fourth quarter was $8.6 million, or 58% of
revenue, compared with $8.5 million, or 64% of revenue in the same
period of 2015. Full year 2016 gross profit was $29.6 million, or
60% of revenue.
“Last year we delivered strong results including growing our
revenues by 25%, as well as successfully launching ePlex in Europe
and ending the year with more than 55 customer agreements. We also
completed the necessary FDA studies and submissions for the ePlex
system and RP panel,” said Hany Massarany, President and Chief
Executive Officer of GenMark. “2017 will be a pivotal year for our
company, as we successfully launch ePlex in the USA and drive its
continued adoption and business success in the European and US
markets. Based on multiple internal and external studies with
several thousand samples, we are very pleased with the performance
of all three ePlex Blood Culture ID panels, which we expect to
launch in Europe during the second quarter and submit to the FDA
later this year,” added Massarany.
Operating expenses for the fourth quarter of 2016 were $20.7
million compared to $17.0 million in the same period for 2015. 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, 2016 operating expenses were $78.6 million, an
increase of $12.9 million over 2015 primarily driven by Research
and Development investment in ePlex.
Loss per share was $0.27 per share for the fourth quarter of
2016 compared to a loss of $0.21 per share in the same period of
2015. For the full year 2016, loss per share was $1.15.
The Company ended the year with $41.6 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 2017, the Company expects revenue in the range of
$65 to $70 million and gross margin in the range of 48-52%.
The Company will be hosting a conference call to discuss fourth
quarter results in further detail and release 2017 guidance on
Tuesday, February 28, 2017 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 51141106
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 True 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 and regulatory clearance
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, 2016 2015 Current
assets Cash and cash equivalents $ 15,959 $ 35,385 Marketable
securities 25,607 10,080 Accounts receivable, net of allowances of
$2,740 and $2,727, respectively 9,048 6,847 Inventories 6,633 3,054
Prepaid expenses and other current assets 1,202 591
Total current assets 58,449 55,957
Non-current assets
Property and equipment, net 18,268 11,396 Intangible assets, net
2,670 2,376 Restricted cash 758 758 Other long-term assets 179
180
Total assets $ 80,324 $ 70,667
Current liabilities Accounts payable $ 8,703 $ 4,376
Accrued compensation 5,650 3,861 Loan payable 7,935 (373 ) Other
current liabilities 4,133 2,725
Total current
liabilities 26,421 10,589
Long-term liabilities Deferred
rent 3,652 1,257 Long-term debt 11,880 9,890 Other non-current
liabilities 220 334
Total liabilities 42,173
22,070
Stockholders’ equity Preferred stock,
$0.0001 par value; 5,000 authorized, none issued — — Common stock,
$0.0001 par value; 100,000 authorized; 46,554 and 42,551 shares
issued and outstanding as of December 31, 2016 and December 31,
2015, respectively 4 4 Additional paid-in capital 393,322 353,233
Accumulated deficit (355,270 ) (304,669 ) Accumulated other
comprehensive income (loss) 95 29
Total
stockholders’ equity 38,151 48,597
Total
liabilities and stockholders’ equity $ 80,324 $ 70,667
GENMARK DIAGNOSTICS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In
thousands, except per share data) Three Months Ended
December 31, Twelve Months ended December 31,
2016 2015 2016 2015
Revenue (unaudited) (unaudited) Product revenue $ 14,803 $
13,085 $ 48,914 $ 39,029 License and other revenue 82 101
360 382
Total revenue
14,885 13,186 49,274 39,411 Cost of revenue 6,243 4,688
19,700 15,317
Gross profit 8,642 8,498
29,574 24,094
Operating expenses Sales and marketing 4,501
3,400 14,734 14,385 General and administrative 3,841 3,379 14,363
13,772 Research and development 12,358 10,180 49,458
37,472
Total operating expenses
20,700 16,959 78,555 65,629
Loss
from operations (12,058 ) (8,461 ) (48,981 ) (41,535 )
Other
income (expense) Interest income 77 25 176 125 Interest expense
(474 ) (273 ) (1,536 ) (880 ) Other income (expense) (168 ) (59 )
(160 ) 133
Total other income (expense) (565 ) (307 )
(1,520 ) (622 )
Loss before provision for income taxes
(12,623 ) (8,768 ) (50,501 ) (42,157 ) Income tax expense (benefit)
55 14 100 40
Net loss $ (12,678
) $ (8,782 ) $ (50,601 ) $ (42,197 ) Net loss per share, basic and
diluted $ (0.27 ) $ (0.21 ) $ (1.15 ) $ (1.00 ) Weighted average
number of shares outstanding basic and diluted 46,458 42,429
44,100 42,157
Other comprehensive loss
Net loss $ (12,678 ) $ (8,782 ) $ (50,601 ) $ (42,197 ) Foreign
currency translation adjustments 86 44 77 36 Net unrealized losses
on marketable securities, net of tax (13 ) (17 ) (11 ) 3
Comprehensive loss $ (12,605 ) $ (8,755 ) $ (50,535 ) $
(42,158 )
GENMARK DIAGNOSTICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
Years ended December 31, 2016
2015 2014 Operating activities: Net
loss $ (50,601 ) $ (42,197 ) $ (38,263 ) Adjustments to reconcile
net loss to net cash used in operating activities: Depreciation and
amortization 3,916 3,405 2,656 Amortization of premiums on
investments 89 180 702 Amortization of deferred debt issuance costs
388 285 — Stock-based compensation 9,236 9,995 5,796 Provision for
bad debt 13 25 — Non-cash inventory adjustments 134 594 450 Gain on
sale of investment in preferred stock (9 ) (223 ) — Other non-cash
adjustments 145 186 185 Changes in operating assets and
liabilities: Accounts receivable (2,250 ) (1,983 ) (2,030 )
Inventories (3,450 ) (1,286 ) (229 ) Prepaid expenses and other
assets (613 ) (36 ) (184 ) Accounts payable 4,105 (757 ) 85 Accrued
compensation 2,172 (458 ) 1,797 Other liabilities 1,088 355
(537 )
Net cash used in operating activities (35,637
) (31,915 ) (29,572 )
Investing activities Payments for
intellectual property licenses (1,500 ) (550 ) (350 ) Purchases of
property and equipment (7,000 ) (3,756 ) (5,726 ) Purchases of
marketable securities (33,688 ) (22,646 ) (28,054 ) Proceeds from
sales of marketable securities 8,015 223 7,497 Maturities of
marketable securities 10,050 46,050 56,050
Net cash provided by (used in) investing activities (24,123
) 19,321 29,417
Financing activities Proceeds
from issuance of common stock 30,920 884 812 Costs incurred in
conjunction with public offering (1,143 ) — — Principal repayment
of borrowings (40 ) (22 ) (56 ) Costs associated with debt issuance
(90 ) (718 ) — Proceeds from borrowings 10,000 10,000 — Proceeds
from stock option exercises 712 989 531
Net
cash provided by financing activities 40,359 11,133 1,287
Effect of exchange rate changes on cash (25 ) (9 ) —
Net
increase (decrease) in cash and cash equivalents (19,426 )
(1,470 ) 1,132 Cash and cash equivalents at beginning of year
35,385 36,855 35,723 Cash and cash equivalents
at end of year $ 15,959 $ 35,385 $ 36,855
Non-cash investing and financing activities: Transfer of
systems from property and equipment into inventory $ 263 $ 225 $
256 Property and equipment costs incurred but not paid included in
accounts payable $ 1,159 $ 146 $ 124 Intellectual property
acquisition included in accrued expenses $ — $ 800 $ 550
Supplemental cash flow information: Cash paid for interest $
1,130 $ 572 $ 20 Cash received for interest $ 266 $ 305 $ 244 Cash
paid for income taxes, net $ 65 $ 10 $ 24
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version on businesswire.com: http://www.businesswire.com/news/home/20170228006659/en/
GenMark Diagnostics, Inc.Hany MassaranyPresident/Chief Executive
Officer760-448-4325
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