Shares of GenMark Diagnostics (NASDAQ:GNMK) were soaring 21.6% as of 11:44 a.m. EDT on Wednesday. The big jump came after GenMark provided preliminary second-quarter results Tuesday evening.
It's easy to see why investors reacted positively to GenMark's Q2 sneak peek. The molecular diagnostics testing company expects revenue of around $40.1 million, up 118% year over year. Most of this total will likely stem from GenMark's ePlex diagnostic platform. The company projects Q2 ePlex sales of around $35.2 million, nearly triple the amount made in the prior-year period.
There's one overriding factor behind GenMark's rosy numbers: COVID-19. The company said that roughly 90% of its product placements "included interest in COVID-19 testing." It also noted that consumable revenue related to COVID-19 testing made up nearly half of total ePlex revenue.
COVID-19 also helped GenMark in other ways. CEO Scott Mendel stated that several customers implemented other ePlex panels after initially getting the system for COVID-19 testing. He said that COVID-19 demand "provides the foundation for future recurring testing revenues across our broader menu."
GenMark plans to report its full Q2 results in early August. With the preliminary numbers already available, the primary catalyst for the healthcare stock in the Q2 update is likely to be GenMark's updated 2020 guidance. Based on how well things are going for the company so far this year, any revisions to its full-year outlook are likely to be well received by investors.