NEW YORK – The GenomeWeb Index rose more than 9 percent in May as investors continued to reward companies' efforts to develop new diagnostics for the SARS-CoV-2 virus, as well as positive earnings reports.
The index also outperformed the Dow Jones Industrial Average, the Nasdaq, and the Nasdaq Biotechnology Index, which rose 4 percent, 7 percent, and 8 percent, respectively. Individual stock performances in the GenomeWeb Index were largely positive in May, as 24 of the 32 stocks saw gains and just eight saw losses.
Fluidigm led the gainers with an almost doubled stock price, while Meridian Bioscience (+29 percent) and CareDx (+27 percent) came in second and third. May marked Meridian's second consecutive month on the list of top three performers — the company saw a 43 percent stock price increase in April. For Fluidigm, the month marked a major turnaround — the company had led the list of April's decliners with a 12 percent loss.
GenMark Diagnostics led the decliners in May with a 24 percent drop in stock price, after tripling its stock in April. Luminex (-14 percent) and Veracyte (-8 percent) rounded out the list of decreased stocks for the month.
Fluidigm's shares rose after new details came out about a collaborative effort being led by the US Department of Defense's Defense Advanced Research Projects Agency (DARPA) to develop an early detection SARS-CoV-2 blood test, which is using the company's technology. Although the collaboration was announced in March, the firm's stock skyrocketed after an article published in The Guardian on May 1 noted that DARPA scientists are hoping the test could detect the virus as early as 24 hours after a person is infected.
A consortium of medical schools led by the Icahn School of Medicine at Mount Sinai is developing the epigenetic test using Fluidigm's microfluidics platform. Specifically, the partners are aiming to use Fluidigm's Biomark HD system and microfluidics technology to develop integrated fluidic circuits that can screen 192 samples across 24 different parallel assays to enable early detection of viral infection.
Meridian's shares rose after the company reported a 14 percent year-over-year increase in its fiscal second quarter revenues. Revenues for the company's life science segment included $5.6 million from SARS-CoV-2-related products.
On a conference call with analysts, CFO Bryan Balsare noted that the company benefited from increased demand for respiratory tests toward the end of the quarter due to patients testing negative for SARS-CoV-2 searching for another potential diagnosis. CEO Jack Kenny added that Meridian's Revogene respiratory panel is being revised to include a SARS-CoV-2 viral target, in addition to the current influenza and other respiratory pathogen targets, and that the company plans to seek Emergency Use Authorization from the US Food and Drug Administration for the revised panel late in the summer.
Investment bank William Blair also upgraded Meridian's shares to Outperform from a prior Market Perform rating. In an analyst note, Brian Weinstein called Meridian an "overlooked beneficiary" from the SARS-CoV-2 pandemic, noting in particular that the Cincinnati-based firm is providing essential components for many molecular and serology tests. This was the first time William Blair has upgraded Meridian's shares to Outperform in more than 10 years, Weinstein added.
CareDx's shares also benefitted from a positive earnings report. The transplant diagnostics firm reported that its first quarter revenues rose 48 percent year over year. It also formed an exclusive partnership with Weill Cornell Medicine to develop and commercialize UroMap, a urine-based gene expression test for acute cellular rejection in kidney transplant recipients.
There didn't seem to be a specific reason for the decline in GenMark's shares, which sank throughout the month despite an 80 percent year-over-year increase in Q1 revenues, driven in part by continued sales growth of the firm's ePlex molecular diagnostics analyzer and by its SARS-CoV-2 test.
However, in a recent head-to-head evaluation, New York's Northwell Health found that SARS-CoV-2 assays from DiaSorin and Hologic outperformed GenMark's ePlex SARS-CoV-2 test when it came to overall limit of detection and clinical correlation.