GenMark (GNMK) Looks 'Ready to Double', Says Cowen; Analyst Raises Rating to 'Outperform'
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(Updated - September 16, 2016 10:24 AM EDT)
Cowen upgraded GenMark Diagnostics (NASDAQ: GNMK) from Market Perform to Outperform with a price target of $17. Analyst Doug Schenkel noted strong ePlex channel checks said he said the stock "looks ready to double."
"Recent channel checks suggest ePlex is performing robustly within early EU adopter sites, and US clinical trials are likely to commence shortly (if they haven't already). We've always liked the market opportunity, and after a long history of delays, ePlex finally appears ready to go," said Schenkel.
The analyst continued, "We downgraded GenMark to Market Perform in the Fall of 2015 (link) subsequent to a delay in ePlex timelines. Our concern was that management’s revised timelines (Q1:16 CE Mark and Q2:16 FDA submission) left little room for error. After a subsequent delay, ePlex timelines are now about in line with our assumptions at the time of our downgrade (Q3:16 CE Mark, Q1:17 US launch). About one year later, checks indicate that sample variability concerns are now addressed, and we have increased conviction in an early-2017 US ePlex launch."
Schenkel added, "We believe it is possible the FDA submission slips into early 2017, but any delay from here would be weeks, not months (no notable revenue impact). Even acknowledging the potential for a slight delay (possible, but not necessarily likely), as well as a likely equity financing over the next 12-18 months, we would begin accumulating a position in shares now while investor sentiment remains muted for reasons outlined below."
Shares of GenMark Diagnostics closed at $8.82 yesterday.
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