GenMark Diagnostics (GNMK), a leader in multiplex molecular tests systems, recently announced the 510(k) clearance by the U.S. Food and Drug Administration (FDA) for its eSensor Respiratory Virus Panel for use in its XT-8 system. The company filed the application for the test with the FDA in December, 2011.
Per management, the 510(k) clearance of the eSensor Respiratory Virus Panel test underlines the company’s competency in providing differentiated electronic detection technology as required for consumer needs and specifications. The approval underlines the company’s focus to offer products geared to deliver stellar clinical performance.
GenMark’s newest test is designed to identify and differentiate 14 clinically important viruses from patients with influenza-like illness. As far as specificity, sensitivity and detection is concerned, the eSensor Respiratory Virus Panel test is more efficient vis-à-vis other multiplex respiratory viral panels, as it can distinguish Rhinovirus from Enterovirus and also separately recognize Adenoviruses.
The eSensor Respiratory Virus Panel test is expected to improve laboratory efficiency and thereby enhance standards of patient care. The test also enables efficient time and workload management for laboratory staff.
The international market for molecular diagnostics has been estimated at around $4.5 billion with an annual growth rate of roughly 15%. Management at GenMark believes that its present portfolio is capable of catering to a market size of $0.9 billion in 2012. The expansion of its tests menu for XT-8 systems and successful commercialization of this newest test might help the company to gain market share.
Thus far, net loss from operations and GenMark’s failure to achieve profitable growth remains an overhang. The operating expenses are expected to increase in the coming years as the company attempts to expand its customer base and increase research and development expenditure to upgrade its technology. Increasing competition from Nanosphere Inc. (NSPH) is also a matter of concern.
However, the rigorous sales and marketing efforts coupled with production efficiency is expected to yield positive results for GenMark. The favorable market conditions and extended customer base are also expected to boost the company’s top-line. The stock currently retains a Zacks #3 Rank, which implies a short-term Hold rating.
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