GenMark second-quarter revenues increase 162% to $651,000

GenMark Diagnostics, Inc. (Nasdaq:GNMK) today reported revenues of $651,000 for the quarter ending June 30, 2010, a 162% increase over second quarter 2009. Net loss for the second quarter was $5.1 million, or $0.60 per share, compared to a net loss of $4.3 million and $1.08 per share for the same period last year.

“Our first quarter as a Nasdaq listed company saw strong growth, particularly in reagent test revenues. In addition, placements of our XT-8 system exceeded our expectations and we are extremely pleased with the productivity of our new and still growing direct sales force”

Reagent test revenues of $415,000 were 80% higher than the second quarter of 2009, while instrument revenues were $108,000 versus zero for the comparable prior year period. Total revenues included $100,000 associated with a non recurring partnering contract for clinical trial support. Gross margin loss of $212,000 for the current quarter was a 56% improvement compared to the $484,000 gross margin loss for 2009. Investment in R&D increased $291,000, up 20% over the prior year quarter and investment in commercial activities, primarily related to sales force expansion, was up $462,000 or 62% over the prior year quarter.

Consistent with GenMark's key strategic initiatives associated with product development, the Board of Directors announced the appointment, effective August 12, 2010, of Dr. Jon Faiz Kayyem, the current President and Chief Executive Officer (CEO), to the newly established position of Chief Scientific Officer (CSO). In this capacity, Dr. Kayyem will oversee all activities associated with menu expansion and platform development. Dr. Kayyem will step down from his position as CEO. Concurrently, Christopher Gleeson, former President and CEO of Ventana Medical Systems and current Chairman of GenMark, has been appointed to the position of CEO, which he plans to fill on an interim basis. GenMark will immediately commence the search process for a new CEO.

"Our first quarter as a Nasdaq listed company saw strong growth, particularly in reagent test revenues. In addition, placements of our XT-8 system exceeded our expectations and we are extremely pleased with the productivity of our new and still growing direct sales force," commented Christopher Gleeson, Chairman and CEO. Gleeson went on to say, "It has become even clearer to us that relevant menu expansion in an IVD environment, coupled with automated platforms that deliver both high quality and high productivity to our customers, are going to be key drivers of both growth and value, and the appointment of Dr. Kayyem to the CSO role is an integral step in enabling our company to achieve its goals in these areas."

YEAR TO DATE 2010

Net sales for the six months ended June 30, 2010 were $1.0 million, a 140% increase over the same period in 2009. Reagents test revenues grew 70% year over year while gross margin loss improved significantly from a loss of $1.7 million during 2009 to a loss of $380,000 during the 2010 period. R&D spending increased by 11% and investment in sales force and other commercial activities increased 75%.