EX-99.1 2 exhibit99122817.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
February 28, 2017


GenMark Diagnostics Reports Fourth Quarter and Full Year 2016 Results
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

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 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





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


Source: GenMark Diagnostics, Inc.


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