GenomeWeb Index Falls 6 Percent in November as Emergence of Omicron Spooks Markets

NEW YORK – The GenomeWeb Index swung downward in November, losing 6 percent of its value and clawing back the 3 percent gain it made in October. The index mirrored a downward swing in the overall markets, which were spooked by the emergence of the SARS-CoV-2 Omicron variant in the latter part of the month.

The index underperformed the Dow Jones Industrial Average and the Nasdaq Biotechnology Index, which each fell 4 percent, and the broader Nasdaq, which was relatively flat month over month. The performance of individual stocks in the GenomeWeb Index was largely negative in November, as 27 of the 35 stocks saw losses — many of them in the double digits — and only eight saw gains.

Fulgent Genetics led the gainers in November with a 13 percent increase in share price, followed by Quidel (+11 percent) and Burning Rock Biotech (+10 percent). Burning Rock had been one of October's top-three decliners with a 21 percent drop in share price.

Invitae led the decliners in November with a 36 percent drop in stock price, followed by Genetron and Castle Biosciences, each losing 34 percent.

The growth in Fulgent's share price came after the company announced that its third quarter revenues had more than doubled year over year to $227.9 million, driven by COVID-19 sales. As a result, Fulgent also raised its 2021 full-year guidance from $800 million to $930 million.

Additionally, the company said it expects to accumulate $1 billion on the balance sheet by the end of the year because of the COVID-19 testing it has done this year. It now plans to direct this windfall to further grow its core business on numerous fronts, such as expanding into new markets and branching further into oncology testing.

Specifically, Fulgent outlined an upcoming launch of a liver cancer liquid biopsy assay and growth of its new oncology testing lab business among its new initiatives.

Quidel's stock also got a boost from positive third quarter earnings news. The San Diego-based firm's revenues increased 7 percent year over year to $509.7 million from $476.1 million in Q3 2020, beating analysts' average estimate of $376.8 million. The growth was led by increased sales of COVID-19 tests, particularly its QuickVue At-Home OTC COVID-19 test, the company said.

Burning Rock had several pieces of positive news in November. The firm's Q3 revenues rose 2 percent year over year with in-hospital test revenue climbing 38 percent during the quarter. Burning Rock CEO Yusheng Han said that this performance, despite pandemic pressures, offers some proof that the hospital market Burning Rock is increasingly prioritizing is a "much more stable and reliable model" than central laboratory services.

The company also provided updates for new product launches in 2022, which are poised to help it enter several new areas of clinical cancer genomics and expected to contribute significantly to its growth in coming years.

Han disclosed that the company has finalized plans to bring the DetermaRx assay it licensed from US precision oncology firm Oncocyte to market next year. Joining that test on the market will be Burning Rock's recently described minimal residual disease assay called BR Prophet, which takes a tumor-informed, patient-personalized approach. The company also said preparations have been going well for the 2022 launch of its six-cancer early detection assay.

Adding to its positive news last month, Burning Rock entered a collaboration with Impact Therapeutics under which it is providing testing services to support the pharma firm's development of the ATR inhibitor IMP9064 in both China and the US. The company also inked a strategic partnership deal with Merck to develop a companion diagnostic for the MET inhibitor tepotinib (Tepmetko) in the mainland China market using Burning Rock's OncoCompass Target panel.

On the side of the decliners, Invitae likely felt the wrath of investors when it missed Wall Street analysts' estimates for the top and bottom lines on its Q3 earnings, despite reporting an overall 66 percent year-over-year increase in revenues. The firm also lowered its full-year revenue guidance by $25 million to between $450 million and $475 million, due to potential COVID-19 impacts.

The company's shares also sank slightly when it filed a lawsuit against Natera in the US District Court for the District of Delaware alleging that Natera infringes two of its patents covering DNA sequence assembly. The Invitae patents at issue were granted in October and comprise novel techniques to improve the performance of DNA sequencing technology, the lawsuit said.

There was no discernible reason for the drops in Genetron and Castle Bio's share prices in November. Both companies reported positive news last month, including a 36 percent increase in Q3 revenues for Genetron and a 54 percent increase in Castle Bio's Q3 revenues.