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Amid Volatile Markets, GenomeWeb Index Up 3 Percent in September

NEW YORK – The GenomeWeb Index rose 3 percent in September, rebounding from a 4 percent loss in August and outperforming the broader markets, which were awash in volatility as they reacted to continued uncertainty in US presidential politics.

The index outperformed the Dow Jones Industrial Average, the Nasdaq, and the Nasdaq Biotechnology Index, which fell more than 2 percent, more than 5 percent, and a fraction of a percent, respectively. Individual stock performances in the GenomeWeb Index were positive in September, as 24 of the 37 stocks saw gains and 13 saw losses.

Pacific Biosciences led the gainers with a 50 percent increase in stock price, while Exact Sciences and Fulgent Genetics followed with a 35 percent increase, each. This is PacBio's second month leading the gainers — the firm saw a 77 percent increase in share price in August.

Illumina led the decliners in September with a 13 percent drop in stock price. Waters (-10 percent) came in second, followed by Bruker (-5 percent). Quidel had been third on the list of gainers in August with a 26 percent increase in share price.

PacBio's stock continued its rise from August, which was triggered after a slew of positive news, including plans to collaborate with Asuragen to develop clinical and research assays based on its single-molecule, next-generation sequencing technology, and the pricing of a stock offering that is like to bring gross proceeds of approximately $86.9 million.

In September, the company announced the appointment of Susan Kim as CFO.

Fulgent, a new addition to the GenomeWeb Index, saw its stock rise largely on the back of positive COVID-19 news, including an announcement at the beginning of September that the firm had signed a contract with New York City Health and Hospitals to provide back-to-school testing for the city's schools, and a deal to provide RT-PCR assays for drive-through testing in Florida's Miami-Dade County. Fulgent also was selected by the Utah Department of Health to provide assays for the state's COVID-19 testing initiative.

And Exact Sciences' stock soared after the company presented new data at an investor conference on a pan-cancer liquid biopsy test that it's developing in partnership with the Mayo Clinic. The test — which identifies esophageal, liver, lung, ovarian, pancreatic and stomach cancers — showed overall sensitivity of 86 percent at a specificity of 95 percent in initial results.

On the opposite side, Illumina's stock began to slide in mid-September after rumors emerged that it planned to acquire liquid biopsy firm Grail. The company confirmed the rumors days later when it announced that it planned to acquire Grail for $8 billion.

Although there is speculation that the deal will give Illumina direct entry into the cancer testing market, which it believes will grow to $75 billion over the next 15 years, investors and analysts were more skeptical.

JP Morgan analyst Tycho Peterson downgraded Illumina's stock from to a Neutral rating from Overweight, citing "uncertainties around the pace of market penetration and revenue generation, a lack of operational synergies, significant near-term dilution ($3.25 to $3.75 dilutive in first full year), and potential distraction/dilution from the core business recovery next year."

And UBS analyst Dan Brennan downgraded the stock to Neutral from Buy, citing an uncertain revenue trajectory, and a "material shift in strategy" for the company.

Editor's Note: Starting this month, Berkeley Lights, Burning Rock Biotech, Fulgent Genetics, Genetron, and Personalis joined the GenomeWeb Index. These companies have current market capitalizations of $4.99 billion, $2.57 billion, $910.3 million, $1.08 billion, and $724.7 million, respectively.