GenMark Bulls Emboldened By Accelerated ePlex Panel Clearance

GenMark Diagnostics, Inc GNMK surged 12 percent Wednesday after announcing FDA market clearance for its ePlex Blood Culture Identification Fungal Pathogen Panel. The news bolstered Raymond James' bullish thesis for the stock. 

The Analyst

Raymond James analyst John Hsu maintained a Market Outperform rating on GenMark with a $7 price target.

The Thesis

The second of three ePlex panels was set to cover more fungal pathogens than any competing product. GenMark boosted the candidate’s appeal by achieving clearance sooner than Raymond James had expected, Hsu said in a Wednesday note. 

“Importantly, with today's FDA clearance, we see the regulatory hurdles as further derisked and supportive of our positive thesis in a 31-percent revenue CAGR through 2020, driven by continued ePlex platform utilization and menu expansion,” the analyst said. 

Looking ahead, Raymond James anticipates a 10-percent year-over-year increase in annuity per placement. Additionally, because the testing is inpatient, the analyst considers it insulated from insurance decisions that affect outpatient reimbursement.

GenMark awaits clearance of its gram negative panel to seize a $500-million total addressable market for sepsis prevention, and altogether, the panel trio will detect pathogens that cause more than 95 percent of bloodstream infections, according to Raymond James. 

Until then, the fungus panel on its own is seen to meet a high demand as fungal pathogens increase as a cause of blood infections.

Price Action

GenMark shares were down 2.51 percent at $4.28 at the time of publication Thursday. 

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