0001487371-16-000361.txt : 20161103 0001487371-16-000361.hdr.sgml : 20161103 20161103160915 ACCESSION NUMBER: 0001487371-16-000361 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20161103 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20161103 DATE AS OF CHANGE: 20161103 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GenMark Diagnostics, Inc. CENTRAL INDEX KEY: 0001487371 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 272053069 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-34753 FILM NUMBER: 161971655 BUSINESS ADDRESS: STREET 1: 5964 LA PLACE COURT CITY: CARLSBAD STATE: CA ZIP: 92008 BUSINESS PHONE: (760) 448-4300 MAIL ADDRESS: STREET 1: 5964 LA PLACE COURT CITY: CARLSBAD STATE: CA ZIP: 92008 8-K 1 form8-kq3earningsrelease.htm 8-K Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 3, 2016
 
GENMARK DIAGNOSTICS, INC.
(Exact name of registrant as specified in its charter)

Commission File Number: 001-34753
 
Delaware
 
27-2053069
(State or other jurisdiction
of incorporation)
 
(I.R.S. Employer
Identification No.)
 
5964 La Place Court
Carlsbad, California
(Address of principal executive offices, including zip code)
 
760-448-4300
(Registrant’s telephone number, including area code)
 
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 




Item 2.02. Results of Operations and Financial Condition.

On November 3, 2016, GenMark Diagnostics, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended September 30, 2016. A copy of the press release is attached hereto as Exhibit 99.1.
The information furnished pursuant to this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, regardless of any general incorporation language in any such filing, unless the Company expressly sets forth in such filing that such information is to be considered “filed” or incorporated by reference therein.
Item 9.01. Financial Statements and Exhibits.
 
(d)
The following exhibit is furnished with this Current Report:
 
 
Exhibit No.
Description
99.1
Press release dated November 3, 2016.
 





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
GENMARK DIAGNOSTICS, INC.
 
 
 
 
 
 
Date:
November 3, 2016
/s/ Eric Stier
 
 
Eric Stier
 
 
Senior Vice President, General Counsel and Secretary
 
 
 
 
 
 
 
 
 





EXHIBIT INDEX
 
 
 
 
Exhibit No.
 
Description
99.1
 
Press release dated November 3, 2016.



EX-99.1 2 a991exhibitq32016.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
November 3, 2016
GenMark Diagnostics Reports Q3 Financial Results
Third Quarter Revenue Increased 28% Versus Prior Year to $10.8 million
ePlex® Gaining Momentum in Europe; Preparation for U.S. Launch Underway
ePlex Clinical Sample Testing Completed at Clinical Study Sites; Q4 FDA Submission on Track
Completed $29 Million ATM Offering; Ended Q3 with Cash Balance of $54.2 million


CARLSBAD, Calif.-(BUSINESS WIRE) - 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, 2016.

Revenue for the third quarter of 2016 was $10.8 million, an increase of 28% over the prior year period.

Gross profit for the third quarter of 2016 was $6.5 million, or 60% of revenue, compared with $5.1 million, or 60% of revenue in the same period of 2015.
"In addition to continued strong performance from XT-8 in the USA, during the third quarter we also realized our first ePlex revenues in Europe. Over the past few months, our ePlex commercialization efforts have been highly effective. Since our last update, we have more than doubled the number of ePlex customer agreements to more than thirty. Our global funnel of ePlex opportunities continues to strengthen, and customer feedback remains very positive,” said Hany Massarany, President and Chief Executive Officer of GenMark. “Furthermore, we recently completed the testing of clinical samples required for 510(k) clearance of the ePlex instrument and its Respiratory Pathogen (RP) panel. Our teams are now preparing clinical study reports for submission to the FDA this quarter, in line with our expectations. Additionally, we raised $29 million of cash during the quarter in an at-the-market (ATM) equity offering of common stock further strengthening our balance sheet,” added Massarany.
Operating expenses for the third quarter of 2016 were $18.1 million compared to $16.2 million in the same period for 2015. The increase was mainly driven by research and development expenses as efforts continued towards the launch of ePlex.
Loss per share was $0.27 per share for the third quarter of 2016, consistent with the same period of 2015.
The Company ended the quarter with $54.2 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 2016, the Company continues to expect revenue in the range of $47 to $51 million and gross margin in the range of 57% to 59%.
The Company will host a conference call to discuss third quarter results in further detail on Thursday, November 3, 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 3270495 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 the timely FDA clearance and commercialization of our ePlex system and our future financial performance, 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,
2016
 
December 31,
2015
Current assets
 
 
 
Cash and cash equivalents
$
19,293

 
$
35,385

Marketable securities
34,860

 
10,080

Accounts receivable, net of allowances of $2,740 and $2,727, respectively
5,115

 
6,847

Inventories
4,216

 
3,054

Prepaid expenses and other current assets
1,192

 
591

Total current assets
64,676

 
55,957

Property and equipment, net
17,335

 
11,396

Intangible assets, net
2,795

 
2,376

Restricted cash
758

 
758

Other long-term assets
175

 
180

Total assets
$
85,739

 
$
70,667

Current liabilities
 
 
 
Accounts payable
$
5,392

 
$
4,376

Accrued compensation
5,227

 
3,861

Current portion of long-term debt
5,403

 
(373)

Other current liabilities
3,804

 
2,725

Total current liabilities
19,826

 
10,589

Long-term liabilities
 
 
 
Deferred rent
3,781

 
1,257

Long-term debt
14,302

 
9,890

Other non-current liabilities
202

 
334

Total liabilities
38,111

 
22,070

Stockholders’ equity
 
 
 
Preferred stock, $0.0001 par value; 5,000 authorized, none issued
—

 
—

Common stock, $0.0001 par value; 100,000 authorized; 46,402 and 42,551 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively
5

 
4

Additional paid-in capital
390,194

 
353,233

Accumulated deficit
(342,593)

 
(304,669)

Accumulated other comprehensive income
22

 
29

Total stockholders’ equity
47,628

 
48,597

Total liabilities and stockholders’ equity
$
85,739

 
$
70,667







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,
 
2016
 
2015
 
2016
 
2015
Revenue
 
 
 
 
 
 
 
Product revenue
$
10,727

 
$
8,382

 
$
34,111

 
$
25,944

License and other revenue
86

 
90

 
278

 
281

Total revenue
10,813

 
8,472

 
34,389

 
26,225

Cost of revenue
4,362

 
3,352

 
13,457

 
10,630

Gross profit
6,451

 
5,120

 
20,932

 
15,595

Operating expenses
 
 
 
 
 
 
 
Sales and marketing
3,223

 
3,587

 
10,232

 
10,984

General and administrative
3,227

 
3,061

 
10,522

 
10,393

Research and development
11,628

 
9,589

 
37,100

 
27,292

Total operating expenses
18,078

 
16,237

 
57,854

 
48,669

Loss from operations
(11,627)

 
(11,117)

 
(36,922)

 
(33,074)

Other income (expense)
 
 
 
 
 
 
 
Interest income
43

 
30

 
98

 
99

Interest expense
(476
)
 
(289
)
 
(1,061
)
 
(607
)
Other income (expense)
16

 
(14
)
 
7

 
193

Total other income (expense)
(417)

 
(273)

 
(956)

 
(315)

Loss before provision for income taxes
(12,044)

 
(11,390)

 
(37,878)

 
(33,389)

Income tax expense
14

 
4

 
45

 
26

Net loss
$
(12,058
)
 
$
(11,394
)
 
$
(37,923
)
 
$
(33,415
)
Net loss per share, basic and diluted
$
(0.27
)
 
$
(0.27
)
 
$
(0.88
)
 
$
(0.79
)
Weighted average number of shares outstanding, basic and diluted
44,377

 
42,312

 
43,308

 
42,061

Other comprehensive loss
 
 
 
 
 
 
 
Net loss
$
(12,058
)
 
$
(11,394
)
 
$
(37,923
)
 
$
(33,415
)
Foreign currency translation adjustments
(4
)
 
(1
)
 
9

 
8

Net unrealized gains (losses) on marketable securities, net of tax
20

 
(4
)
 
(2
)
 
(20
)
Comprehensive loss
$
(12,042
)
 
$
(11,399
)
 
$
(37,916
)
 
$
(33,427
)





GENMARK DIAGNOSTICS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
Nine Months Ended September 30,
 
2016
 
2015
Operating activities
 
 
 
Net loss
$
(37,923
)
 
$
(33,415
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
Depreciation and amortization
2,739

 
2,500

Amortization of premiums on investments
61

 
157

Amortization of deferred debt issuance costs
277

 
199

Gain on sale of investment in preferred stock
(9
)
 
(223
)
Stock-based compensation
6,788

 
7,347

Provision for bad debt
13

 
—

Non-cash inventory adjustments
120

 
567

Other non-cash adjustments
20

 
9

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
1,719

 
557

Inventories
(1,048
)
 
(980
)
Prepaid expenses and other assets
(596
)
 
(320
)
Accounts payable
916

 
(358
)
Accrued compensation
1,731

 
575

Other liabilities
33

 
(295
)
Net cash used in operating activities
(25,159
)
 
(23,680
)
Investing activities
 
 
 
Payments for intellectual property licenses
(800
)
 
(550
)
Purchases of property and equipment
(5,105
)
 
(2,868
)
Purchases of marketable securities
(32,895
)
 
(14,797
)
Proceeds from sales of marketable securities
9

 
223

Maturities of marketable securities
8,050

 
28,350

Net cash provided by (used in) investing activities
(30,741
)
 
10,358

Financing activities
 
 
 
Proceeds from issuance of common stock
30,448

 
427

Costs incurred in conjunction with stock issuance
(1,091
)
 
—

Principal repayment of borrowings
(28
)
 
(15
)
Proceeds from borrowings
10,000

 
10,000

Costs associated with debt issuance
(30
)
 
(718
)
Proceeds from stock option exercises
507

 
986

Net cash provided by financing activities
39,806

 
10,680

Effect of exchange rate changes on cash
2

 
(1
)
Net decrease in cash and cash equivalents
(16,092
)
 
(2,643
)
Cash and cash equivalents at beginning of period
35,385

 
36,855

Cash and cash equivalents at end of period
$
19,293

 
$
34,212

Non-cash investing and financing activities
 
 
 
Transfer of instruments from property and equipment to inventory
$
234

 
$
165

Property and equipment costs included in accounts payable
$
1,040

 
$
248

Intellectual property acquisitions included in other current liabilities
$
700

 
$
800

Supplemental cash flow disclosures
 
 
 
Cash paid for income taxes, net
$
38

 
$
9

Cash received for interest
$
58

 
$
256

Cash paid for interest
$
761

 
$
607





GenMark Diagnostics, Inc.
Hany Massarany
President/Chief Executive Officer
760-448-4325

Source: GenMark Diagnostics, Inc.

###