GenMark Diagnostics, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - November 2, 2017

Attached files

file filename
8-K - 8-K - GenMark Diagnostics, Inc.form8-k20171102.htm


Exhibit 99.1
November 2, 2017


GenMark Diagnostics Reports Third Quarter 2017 Results

CARLSBAD, Calif - 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.


Investor Relations Contact                
Lynn Pieper Lewis or Leigh Salvo             
(415) 937-5404     
ir@genmarkdx.com






GENMARK DIAGNOSTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)

 
September 30,
2017
 
December 31,
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




GenMark Diagnostics, Inc. Reports