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GenomeWeb Index Falls 3 Percent in 2016; Genmark Leads Gainers as PacBio Drops

NEW YORK (GenomeWeb) – The GenomeWeb Index fell nearly 3 percent in 2016, amid a rough year for biotechnology stocks overall.

The Index, which tracks the stock performance of 28 companies in the molecular diagnostics and omics tools space, vastly underperformed the Dow Jones Industrial Average (up 13 percent) and the Nasdaq (up 8 percent) in 2016, but outperformed the Nasdaq Biotechnology Index, which fell 22 percent year over year. The 3 percent dip in the GenomeWeb Index comes after a 5 percent gain in 2015 and a 17 percent rise in 2014.

Overall, 12 companies in the Index saw their shares rise in 2016, while 16 firms suffered year-over-year losses.

GenMark Diagnostics was the biggest winner of the year, with its stock rising 58 percent over 2015. The company reported positive quarterly performances all year, including a 34 percent increase in Q4 2015 revenues, a 9 percent rise in Q1, a 64 percent increase in Q2, and a 28 percent increase in Q3.

The company also garnered CE IVD marking for its ePlex instrument system and ePlex Respiratory Pathogen Panel in June, and announced in December that it was also seeking US Food and Drug Administration clearance for the technology.

Further, Cowen and Company upgraded GenMark's shares to Outperform from Market Perform in September, citing the strength of the ePlex system and GenMark's moves to get the technology approved in the US. Cowen said that it expects that US clinical studies could move quickly and that ePlex should be launched in the US in advance of the 2017/2018 respiratory season.

NanoString Technologies also gained big this year with a 52 percent year-over-year increase in share price. Along with a slew of positive quarterly reports, the company developed a new sequencing chemistry called Hyb & Seq, which it presented at the annual Advances in Genome Biology and Technology meeting in February.

NanoString then announced a collaboration with Merck to develop a companion diagnostic to the pharmaceutical company's anti-PD-1 cancer therapy Keytruda (pembrolizumab). And over the course of the year, its Prosigna breast cancer test was covered by large insurers such as Aetna and Cigna.

Exact Sciences also gained big in 2016 with a 45 percent increase in share price. The stock saw a 66 percent decline in 2015 after the US Preventive Services Task Force issued draft recommendations suggesting the company's colon cancer screening test Cologuard be used as an alternative test rather than a recommended test, but bounced back when the test was included in updated USPSTF guidelines.

A slew of private and public insurers then issued positive coverage decisions for Cologuard, including the US Centers for Medicare and Medicaid Services, the healthcare program of the US Department of Defense, and Humana.

Pacific Biosciences had the year's biggest loss, cratering 71 percent over the course of 2016 and completely reversing the 67 percent gain it made in 2015. PacBio was riding high on the launch of its Single Molecule, Real Time technology and a $20 million milestone payment from Roche for fulfilling a developmental milestone related to a commercialization deal.

Recently, however, Roche announced it would terminate their agreement in order to focus on developing nanopore technology with Genia Technologies. PacBio's shares fell more than 50 percent in December alone.

Despite being one of the big gainers in 2015 with a 27 percent increase in share price, Myriad Genetics saw its share price sink 61 percent in 2016.

Despite successfully completing one of the biggest acquisitions of the yearbuying Assurex Health in September for $225 million in upfront payments and up to $185 million in performance-based milestones — the company also saw its stock hit a 52-week low after it reported in August that its fiscal fourth quarter revenues dipped 2 percent year over year.

The company is also fighting allegations of patent infringement levied against it in a US District Court by Laboratory Corporation of America subsidiary Esoterix Genetic Laboratories. And it was dealt a blow at the end of the year when Medicare contractor Palmetto GBA issued a draft local coverage determination proposing that it end coverage of Myriad Genetics' rheumatoid arthritis test Vectra DA, citing recent studies that raise questions as to whether the test is effective in assessing disease activity in RA patients.

Other big decliners in 2016 included T2 Biosystems (-52 percent) and Illumina (-33 percent).