William Blair & Co. Initiates Outperform Rating on GenMark Diagnostics (GNMK)
William Blair & Co. is out with a research report this morning, where it initiates an Outperform rating on shares of GenMark Diagnostics Inc. (NASDAQ: GNMK); it believes shares are severely undervalued.
The WBC analysts said, “GenMark is an emerging player in the more than $40 billion market for diagnostics, with particular focus on the $4 billion molecular diagnostics segment. The company is targeting some of the fastest-growing areas of molecular diagnostics, including infectious disease, cancer diagnostics, and personalized medicine. These areas all have a need for the type of multiplex testing that the GenMark technology can provide.”
They noted, “GenMark’s proprietary eSensor detection technology presents signiﬁcant competitive advantages, including its 1) high level of accuracy, 2) enabling of efficient workﬂow, 3) multiplex capability, and 4) small footprint. The technology is protected by an exclusive licensing agreement and more than 130 patents. The patents primarily focus on the commercial application of the technology, and should provide ample protection even after the licensing agreement ends in 2017.”
They also added, “The company has three FDA-approved tests (cystic ﬁbrosis genotyping, warfarin sensitivity, and thrombophilia risk), as well as nine tests in various phases of development within companion diagnostics, genetic diseases, infectious diseases, and cancer. With GenMark expected to launch two to four tests per year, we are encouraged by the company’s opportunities.”
The William Blair & Co. analysts closed by saying, “With the return of founder and CEO Dr. Jon Faiz Kayyem in July 2009, the company underwent a signiﬁcant leadership change, bringing on a handful of tenured medical device and diagnostic executives to join GenMark’s management team and board of directors. In our view, Dr. Kayyem has assembled a management team whose caliber is extremely rare for a company of this size. We believe GenMark can leverage this experience along with the company’s proprietary technology to become a leader in easy-to-use multiplexing for molecular diagnostics.”
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