NEW YORK (GenomeWeb) – Roche's plan to take a majority stake in Foundation Medicine sent the cancer molecular diagnostics firm's shares soaring in January, pacing gainers in the GenomeWeb Index for the month.
Overall, the index rose almost 4 percent month over month, beating the Dow Jones Industrial Average, which fell 4 percent in January, and the Nasdaq, which improved 2 percent. The GenomeWeb Index trailed the Nasdaq Biotech Index, which moved up 6 percent month over month.
Foundation's shares more than doubled in January from December, masking a mixed month, overall, for the index as 17 companies saw their shares increase in value, while the prices for 14 companies slid month over month. In addition to Foundation, other significant gainers last month included Fluidigm (+14 percent) and Hologic (+14 percent).
Quidel (-19 percent) was the biggest decliner in the index and was the only firm with a double-digit month-over-month drop.
The main force behind Foundation's stock movement in January was its announcement that Roche would invest up to $1.2 billion in the company, giving it up to a 56.3 percent stake in Foundation. On the day the deal was announced, Foundation's shares popped 95 percent. Almost 9 million shares of Foundation's stock traded hands that day, or 19 times the company's three-month average volume.
Also last month, Foundation CEO Michael Pellini said at the JP Morgan Healthcare Conference in San Francisco that the firm will have a laboratory that is compliant with the US Food and Drug Administration's quality system regulation. Avera McKennan Hospitalalso signed a deal with the company to partner on cancer genomics.
Meanwhile, Fluidigm said mid-month that it expects $33.4 million in revenues for its fourth quarter, just above the average analysts' estimate of $33.3 million. Additionally two investment banks issued positive notes on the company. Cowen & Co. upgraded Fluidgm's shares to Outperform, and Piper Jaffray projected solid growth for the firm's CyTOF mass spectrometry platform.
Hologic started January by preannouncing anticipated revenues for its fiscal first quarter would increase 7 percent year over year, a figure that was later confirmed when the firm reported its financial results. Later in January, William Blair upgraded Hologic's stock to Outperform, noting a "transformation" in Hologic's culture, and added that the company's "management talent has been upgraded, leadership and accountability now exists where it did not before, end markets may be stabilizing, and communication with [investors] is improving."
Among the decliners, Quidel has the biggest month-over-month loss, despite an announcement of between $63 million and $64 million in preliminary revenues for the fourth quarter. The figures would represent a 26 percent to 28 percent increase from Q4 2013 revenues. Nonetheless, the company's shares declined 4 percent on the day of the announcement and have steadily retreated since.
GenomeWeb has reconfigured its index to include only companies in the omics tools and molecular diagnostics space that have a minimum market cap of $200 million. As a result, firms such as CombiMatrix, Nanosphere, and Vermillion have been removed from the index. Also, Sigma-Aldrich has been dropped from the index pending its acquisition by Merck KGaA. Firms that have been added to the index include Abbott, Alere, T2 Biosystems, and others.