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Alere Leads GenomeWeb Index in October as Majority of Stocks Decline Sharply

NEW YORK (GenomeWeb) – The GenomeWeb Index fell nearly 9 percent in October, vastly underperforming the Dow Jones Industrial Average and the Nasdaq, which fell 1 percent and 2 percent, respectively. However, the Index's decline wasn't as steep as that of the Nasdaq Biotechnology Index, which sank more than 11 percent.

All but four of the stocks in the Index — which now tracks 29 firms in the omics research tools and molecular diagnostics space — fell in October, many by double digits. October's trends were almost the complete opposite of September, which saw all but three stocks gaining, many in double digits, and an overall 5 percent gain.

Alere led October's winners in the GenomeWeb Index with a 3 percent increase in stock price. The company, which has had a contentious relationship with would-be acquirer Abbott over the past several months, announced that its shareholders had approved the merger and that the Ministry of Commerce of the People's Republic of China had decided not to block the deal.

Abbott agreed earlier this year to pay $5.8 billion to buy Alere, but uncertainty emerged when Alere delayed filing its 10-K report with US securities regulators. Abbott then requested termination of the deal, which Alere refused. Alere sued Abbott in August in a move designed to push its potential acquirer to fulfill its obligations under the terms of their merger agreement and act promptly in obtaining the required antitrust approvals. In September, the Delaware Chancery Court recommended that the parties consider mediation, and the companies agreed that they would engage in that manner.

Genomic Health's shares also gained 3 percent in October. Earlier this month, the company followed up the launch of its liquid biopsy assay with the first public data that describes in detail the test's analytic validity. According to Genomic Health, the test was able to maintain a 95 percent detection rate as long as tumor DNA was present with a frequency of at least 0.19 to 0.56 percent compared to background DNA (depending on the type of genetic alternation in question.)

Also, last week, a new study in Cancer suggested that when the company's Oncotype DX test is administered, physicians' decisions and patient treatment largely reflect the test's results.

The only other gainers this month were Cepheid and Danaher, both up a fraction of a percent. The companies announced last week that Danaher's impending $4 billion acquisition of Cepheid has cleared antitrust requirements in the US, Germany, Austria, and South Africa.

The October decliners were led once again by Fluidigm. The company saw a 42 percent drop in stock price this month, following a 12 percent drop in September. Fluidigm announced after the close of the market on Oct. 12 that it would suspend its full-year 2016 revenue guidance based on its assessment of third quarter revenues.

According to management's preliminary analysis, the firm said, revenues for the three months ended Sept. 30 fell approximately 23 percent year over year to $22.2 million from $28.6 million. Wall Street analysts had expected revenues of $29.3 million for the quarter. Instrument revenues fell to approximately $9.2 million, a decrease of 39 percent compared to the prior year period. The firm noted that lower-than-expected sales of its Helios mass cytometry system contributed to the drop.

The company further announced on Oct. 19 that CEO Gajus Worthington would step down from his positions as CEO and board member, to be replaced by S. Christopher Linthwaite.

Illumina came in as the second biggest loser of the month with a 25 percent decline in share price. The company's shares tumbled after it announced that it expects third quarter 2016 revenues will fall short of its previously anticipated $625 million to $630 million. The genetic analysis technologies company said in a statement prior to releasing its full Q3 results that it expects total revenues of $607 million, a 10 percent increase over its Q3 2015 revenues of $550 million, but short of its guidance. The shortfall was driven by a "larger than anticipated year-over-year decline in high-throughput sequencing instruments," the company said in a statement. The firm also missed analysts' average expectation for revenues of $628.1 million in Q3.

Natera's shares declined 24 percent for the month, though there was no clear reason for the tumble. 

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