Seeking Alpha: GenMark Diagnostics Hoping To Make Its Mark In Clinical MDx

Molecular diagnostics is still a relatively new opportunity in the clinical diagnostics space - about $4 billion/year if Roche's (OTCQX:RHHBY) estimates of its market share are accurate. It remains a good growth opportunity, though, as molecular diagnostic technologies can in many cases offer faster and more accurate results for healthcare providers. GenMark Diagnostics (NASDAQ:GNMK) is looking to emerge as a leader in hospital/lab-based multiplex molecular diagnostics with a new system (ePlex) designed to deliver fast and accurate results with good throughput.

GenMark's existing business isn't going to take the business very far, so a great deal is riding on that new system. The performance specs look very competitive, but rivals aren't going to back it in and give up. This remains an exceptionally speculative story, but one with worthwhile upside from here if the 2015 launch goes well. While the stock has been weak since my last article (along with many other riskier med-tech stories), I think the name is still worth consideration.

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GenMark Diagnostics Hoping To Make Its Mark In Clinical MDx

Seeking Alpha: For A Wild Ride, Consider GenMark Diagnostics

I really don't know if the next five years at GenMark Diagnostics (GNMK) are going to be more like Luminex (LMNX) or more like Cepheid (CPHD). If it's the former, the stock will chop around a lot as the company struggles to establish its system as a preferred option in multiplex molecular diagnostics testing. If it's the latter, GenMark will see strong adoption of a fast, accurate, easy-to-use system that becomes a new must-have in hospitals and reference labs.

I like GenMark's technology and I think there is room in the market for a strong automated multiplex MDx system. By no means does that guarantee success, though, and investors are going to have to put up with many years where valuation is based either on long-distant cash flows or very arbitrary multiples to forward revenue. For today, GenMark's value seems sandwiched in between a DCF approach that suggests the shares are overvalued (as it would have for Cepheid and Illumina before, and during, their huge runs) and a discounted EV/revenue approach that suggests the significant revenue growth potential isn't adequately reflected in the shares.

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For A Wild Ride, Consider GenMark Diagnostics

Limited Love For Life Sciences

Oh, how times have changed. Back in the very late 1990s, as the Nasdaq bubble was filling up ahead of the final pop, life sciences IPOs basked in a frenzy of investor attention. Many lousy (or at least seriously under-developed) companies debuted to eye-popping valuations and saw strong follow-on interest in the market. 

Nowadays, it is a decidedly different market. Whether in spite of Illumina's (Nasdaq:ILMN) ongoing commercial success, or perhaps because of it, investor enthusiasm for new science mousetraps is decidedly more muted. Two recent IPOs, Pacific Biosciences (Nasdaq:PACB) and Complete Genomics (Nasdaq:GNOM), have debuted to something less than rampant applause, while Rules-Based Medicine has recently decided to postpone its public offering.

Please follow the link for the full piece:
http://stocks.investopedia.com/stock-analysis/2010/Limited-Love-For-Life-Sciences-PACB-GNOM-ILMN-WGBS-HLCS1118.aspx

Companies With Big MDx Dreams

This is a relatively unusual quiet period in medical technology, as there are so few emerging sectors that are really capturing attention and drawing high stock multiples. One of the areas that still is drawing attention, however, is molecular diagnostics. A subset of the lucrative multi-billion dollar diagnostics market, molecular diagnostics focuses on the use of modern life sciences technology to use genomic and/or proteomic expression information to diagnose or predict disease. (Find an investment that will give your portfolio a shot in the arm. To learn more, check out A Checklist For Successful Medical Technology Investment.)  

Molecular diagnostics (often abbreviated as MDx) has garnered a lot of hope, enthusiasm, and more recently, disappointment. Although many of the leaders in this space are some of the large companies investors might expect (Roche (Nasdaq:RHHBY), et al), there are several small companies that could give risk-seeking investors an interesting play on the space. 


Please follow the link for the full piece:
http://stocks.investopedia.com/stock-analysis/2010/Small-Companies-With-Big-MDx-Dreams-CRA-EXAS-GHDX-NSPH-SQNM-LMNX-CPHD0929.aspx