GenMark Diagnostics (GNMK) Stock Pops On Increasing Revenue

GenMark Diagnostics GNMK Stock News

GenMark Diagnostics, Inc (NASDAQ: GNMK) is making a run for the top in the market this morning, trading on gains of around 20%. The gains come after the company reported preliminary financial data, showing that revenue is seeing strong growth on COVID-19 test demand. Here’s what’s going on:

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GNMK Stock Climbs On Preliminary Financial Results

In the press release, GenMark Diagnostics not only provided preliminary financial and operational results for the first quarter. Moreover, due to the strong results, the company has increased its guidance for the full 2020 year.

In the first quarter, revenues are expected to come in at about $38.7 million. That’s a year over year increase of 80%. Most of this revenue comes from its ePlex testing platform, which drove about $34.3 million in the quarter. That figure is 119% higher than it was at this time last year.

In the release, APT said that COVID-19 has positively impacted first quarter placements and revenue. Importntly, during the quarter, the company placed 54 ePlex analyzers, bringing the global base of analyzers to more than 580.

Moving forward, the comapny is expecting for growth in revenue to continue. In fact, the company guided for revenue to come in between $112 and $122 million for the full 2020 year. That’s a strong increase over previous guidance of between $100 million and $110 million.

In a statement, Scott Mendel, Interim President and CEO at APT, had the following to offer:

GenMark is honored to play an important role in fighting the COVID-19 global pandemic. Our sample-to-answer test enables healthcare providers to determine if a patient has COVID-19 in under two hours and is a critical diagnostic solution for hospitals. I’m extremely proud of our team’s hard work throughout this crisis as we continue to work at maximum capacity to provide our ePlex SARS-CoV-2 test and Respiratory Pathogen panel.

Our sales and implementation teams responded to significant demand for ePlex instruments resulting in 109 gross placements in the quarter. Our installed base increased by 54 net placements in the quarter as we opportunistically repositioned 55 ePlex analyzers to provide COVID-19 testing capacity across as many customer sites as possible. Importantly, this aggressive repositioning strategy also allowed us to expand into many new customer sites. We believe these placements will drive enduring revenue streams beyond this pandemic as new customers adopt our Respiratory Pathogen and Blood Culture Identification panels.

In addition to significant top line growth, gross margins improved meaningfully, driven by strong manufacturing yields, continued progress on direct material cost reduction and increased production volumes. Given the strength of our first quarter results and the recurring revenue aspect of our business, we are raising full year revenue guidance by $12 million. We will continue to assess the duration of the elevated RP/COVID-19 demand while also evaluating the impact on implementations of our BCID panels.

This News Is Exciting

In the face of the COVID-19 pandemic, we’ve been focused on quite a bit of negative news. More than 400,000 cases have taken place in the United States with about a million and a half cases around the world.

While this pandemic is a huge issue, it’s proving to be a positive for some companies, and savvy investors that get involved in them. With the coronavirus spreading around the world, demand for diagnostic tests is only likely to continue to climb, and that’s great news for GenMark Diagnostics.

As the company continues to provide one of the key tools in putting an end to the pandemic, revenue is likely to continue rising, making GNMK a stock that’s hard to ignore.

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