GenMark Diagnostics Reports Third Quarter 2019 Results
Highlights
- Recognized total revenue of
$20.9 million and achieved total gross margin of 34%
◦ ePlex revenue of$13.4 million represented 64% of total revenue
◦ ePlex revenue grew 98% compared to the prior year period - Placed 51 net new ePlex analyzers, expanding the global installed base to 489 placements
◦ ePlex installed base grew 57% compared to the prior year period - Obtained a Proprietary Laboratory Analysis (PLA) reimbursement code for the ePlex
Respiratory Pathogen Panel
“Our recently launched Blood Culture ID panels, which provide the broadest coverage of molecular targets for the detection of sepsis, are significantly bolstering our competitive position. With a highly differentiated menu and superior testing efficiency, ePlex is increasingly being recognized in the syndromic testing market as the best-in-class system for delivering high quality, patient-centered care,” said Hany Massarany, President and Chief Executive Officer. “I’m very encouraged by the momentum that our company continues to gain and I’m confident that our strong commercial team and consistent operational execution will continue to drive our performance and growth in this very attractive and rapidly growing market.”
Third Quarter Financial Results
Revenue was
Operating expenses for the third quarter of 2019 were
Loss per share was
Cash and investments were
Guidance for Full Year 2019
GenMark continues to expect total revenue for the full year 2019 to be in the range of
The Company expects global ePlex placements to range from 170 to 190 net new analyzers with an annuity per analyzer of
Gross margin is expected to be in the 31% to 33% range. Operating expenses are expected to be approximately
Webcast and Conference Call Information
GenMark will be hosting a conference call to discuss third quarter results in further detail on
About
Safe Harbor Statement
This press release includes forward-looking statements regarding events, trends and business prospects, which may affect the Company’s future operating results and financial position. Such statements, including, but not limited to, those regarding its future financial performance, achievement of profitability targets, plans and objectives of management, and the timely and effective commercialization and clinical impact of the Company’s ePlex system, are all subject to risks and uncertainties that could cause actual results and financial position to differ materially. Some of these risks and uncertainties include, but are not limited to, GenMark’s 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, the Company’s ability to successfully expand sales of its product offerings outside
Investor Relations Contact
(415) 937-5404
ir@genmarkdx.com
GENMARK DIAGNOSTICS, INC. | |||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands, except par value) | |||||||
September 30, 2019 |
December 31, 2018 |
||||||
ASSETS: | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 24,308 | $ | 36,286 | |||
Short-term marketable securities | 8,879 | 8,882 | |||||
Accounts receivable, net of allowances of $131 and $75, respectively | 10,448 | 11,534 | |||||
Inventories, net | 12,570 | 10,244 | |||||
Prepaid expenses and other current assets | 2,071 | 1,483 | |||||
Total current assets | 58,276 | 68,429 | |||||
Property and equipment, net | 18,863 | 21,070 | |||||
Intangible assets, net | 1,580 | 2,023 | |||||
Restricted cash | 758 | 758 | |||||
Noncurrent operating lease right-of-use assets | 4,766 | — | |||||
Other long-term assets | 809 | 701 | |||||
Total assets | $ | 85,052 | $ | 92,981 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY: | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 10,007 | $ | 9,886 | |||
Accrued compensation | 7,720 | 7,358 | |||||
Current operating lease liability | 1,828 | — | |||||
Other current liabilities | 2,089 | 3,043 | |||||
Total current liabilities | 21,644 | 20,287 | |||||
Deferred rent | — | 2,996 | |||||
Long-term debt | 48,720 | 36,042 | |||||
Noncurrent operating lease liability | 6,071 | — | |||||
Other noncurrent liabilities | 55 | 109 | |||||
Total liabilities | 76,490 | 59,434 | |||||
Stockholders' equity: | |||||||
Preferred stock, $0.0001 par value; 5,000 authorized, none issued | — | — | |||||
Common stock, $0.0001 par value; 100,000 authorized; 58,044 and 56,240 shares issued and outstanding, respectively | 6 | 6 | |||||
Additional paid-in capital | 512,451 | 500,344 | |||||
Accumulated deficit | (503,946 | ) | (466,883 | ) | |||
Accumulated other comprehensive income | 51 | 80 | |||||
Total stockholders’ equity | 8,562 | 33,547 | |||||
Total liabilities and stockholders’ equity | $ | 85,052 | $ | 92,981 | |||
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, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenue: | ||||||||||||||||
Product revenue | $ | 20,822 | $ | 15,713 | $ | 60,413 | $ | 51,156 | ||||||||
License and other revenue | 96 | 82 | 412 | 225 | ||||||||||||
Total revenue | 20,918 | 15,795 | 60,825 | 51,381 | ||||||||||||
Cost of revenue | 13,868 | 10,165 | 41,339 | 37,172 | ||||||||||||
Gross profit | 7,050 | 5,630 | 19,486 | 14,209 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 6,279 | 5,375 | 17,991 | 15,964 | ||||||||||||
General and administrative | 4,765 | 4,718 | 14,217 | 13,398 | ||||||||||||
Research and development | 6,294 | 6,105 | 20,386 | 22,007 | ||||||||||||
Total operating expenses | 17,338 | 16,198 | 52,594 | 51,369 | ||||||||||||
Loss from operations | (10,288 | ) | (10,568 | ) | (33,108 | ) | (37,160 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest income | 126 | 188 | 438 | 577 | ||||||||||||
Interest expense | (1,527 | ) | (661 | ) | (4,331 | ) | (2,246 | ) | ||||||||
Other income (expense) | (19 | ) | 53 | (34 | ) | (49 | ) | |||||||||
Total other income (expense) | (1,420 | ) | (420 | ) | (3,927 | ) | (1,718 | ) | ||||||||
Loss before provision for income taxes | (11,708 | ) | (10,988 | ) | (37,035 | ) | (38,878 | ) | ||||||||
Income tax (benefit) expense | (33 | ) | 5 | 28 | 59 | |||||||||||
Net loss | $ | (11,675 | ) | $ | (10,993 | ) | $ | (37,063 | ) | $ | (38,937 | ) | ||||
Net loss per share, basic and diluted | $ | (0.20 | ) | $ | (0.20 | ) | $ | (0.65 | ) | $ | (0.70 | ) | ||||
Weighted average number of shares outstanding, basic and diluted | 57,718 | 55,847 | 57,161 | 55,535 | ||||||||||||
Other comprehensive loss: | ||||||||||||||||
Net loss | $ | (11,675 | ) | $ | (10,993 | ) | $ | (37,063 | ) | $ | (38,937 | ) | ||||
Other comprehensive income/(loss): | ||||||||||||||||
Foreign currency translation adjustments, net of tax | (46 | ) | (51 | ) | (37 | ) | (31 | ) | ||||||||
Net unrealized gains on marketable securities, net of tax | — | 4 | 8 | 27 | ||||||||||||
Total other comprehensive income | (46 | ) | (47 | ) | (29 | ) | (4 | ) | ||||||||
Total comprehensive loss | $ | (11,721 | ) | $ | (11,040 | ) | $ | (37,092 | ) | $ | (38,941 | ) | ||||
GENMARK DIAGNOSTICS, INC. | |||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In thousands) | |||||||
Nine Months Ended September 30, |
|||||||
2019 | 2018 | ||||||
Operating activities: | |||||||
Net loss | $ | (37,063 | ) | $ | (38,937 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 5,393 | 5,281 | |||||
Net accretion of premiums/discounts on investments | (134 | ) | (110 | ) | |||
Amortization of deferred debt issuance costs | 1,266 | 725 | |||||
Stock-based compensation | 8,840 | 8,895 | |||||
Provision for bad debt | 93 | 24 | |||||
Non-cash inventory adjustments | 1,653 | 1,061 | |||||
Other non-cash adjustments | 175 | (62 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 993 | 797 | |||||
Inventories | (5,471 | ) | (3,847 | ) | |||
Prepaid expenses and other assets | (857 | ) | 384 | ||||
Accounts payable | 345 | (3,408 | ) | ||||
Accrued compensation | (406 | ) | 1,053 | ||||
Other current and non-current liabilities | (398 | ) | (756 | ) | |||
Net cash used in operating activities | (25,571 | ) | (28,900 | ) | |||
Investing activities: | |||||||
Purchases of property and equipment | (1,193 | ) | (1,060 | ) | |||
Purchases of marketable securities | (26,735 | ) | (28,785 | ) | |||
Maturities of marketable securities | 26,880 | 56,500 | |||||
Net cash (used in) provided by investing activities | (1,048 | ) | 26,655 | ||||
Financing activities: | |||||||
Proceeds from issuance of common stock, net of offering costs | 2,837 | 535 | |||||
Principal repayment of borrowings | (35,070 | ) | (68 | ) | |||
Proceeds from borrowings | 50,000 | — | |||||
Payments associated with debt issuance | (3,588 | ) | (20 | ) | |||
Proceeds from stock option exercises | 432 | 22 | |||||
Net cash provided by financing activities | 14,611 | 469 | |||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 30 | 27 | |||||
Net decrease in cash, cash equivalents, and restricted cash | (11,978 | ) | (1,749 | ) | |||
Cash, cash equivalents, and restricted cash at beginning of year | 37,044 | 27,512 | |||||
Cash, cash equivalents, and restricted cash at end of period | $ | 25,066 | $ | 25,763 | |||
Non-cash investing and financing activities: | |||||||
Transfer of systems to property and equipment from inventory | $ | 1,492 | $ | 2,477 | |||
Property and equipment included in accounts payable | $ | 147 | $ | 746 | |||
Supplemental cash flow information: | |||||||
Cash paid for income taxes, net | $ | 85 | $ | 133 | |||
Cash paid for interest | $ | 2,890 | $ | 1,517 | |||
Source: GenMark Diagnostics, Inc.