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GenomeWeb Index Gains 49 Percent in 2020, Outperforming Wider Markets

NEW YORK – The GenomeWeb Index gained 49 percent in 2020, outperforming the wider markets, which fluctuated wildly throughout the year in reaction to the uncertainty brought about by the COVID-19 pandemic and the politics of the US presidential race.

The index, which tracks the stock performance of 37 companies in the molecular diagnostics and omics tools space, rose above the 34 percent increase it saw in 2019 and far above the 13 percent hike it saw in 2018. It outperformed the Dow Jones Industrial Average, the Nasdaq, and the Nasdaq Biotechnology Index, which rose 7 percent, 44 percent, and 26 percent year over year, respectively.

Overall, the index's performance was largely positive in 2020, as 32 companies saw their shares rise and only five firms suffered year-over-year losses. Overall, 10 of the gainers saw their stocks rise by triple-digit percentages, and a majority of the rest saw gains in the double-digit percentages.

Twist Bioscience took the top spot in 2020 with a 573 percent increase in share price, while Pacific Biosciences (+405 percent) and Fulgent Genetics (+304 percent) rounded out the top three performers.

The rollercoaster ride of the past few years seemingly continues for PacBio investors. The firm had been one of 2019's biggest decliners with a 31 percent loss in share price, took the second spot in the top-performers list in 2018 with a 180 percent increase in share price, and made a showing in the bottom-three list in 2017 with a 31 percent decline.

The biggest loser in 2020 was Myriad Genetics, which saw its shares decline 27 percent. Genetron (-13 percent), which went public in June, and Becton Dickinson (-8 percent) rounded out the list of top three decliners.

Some companies that saw increases in share prices in 2020 benefited from positive earnings reports, while others were able to capitalize on opportunities presented by the pandemic to develop products or services centered around SARS-CoV-2 testing or telemedicine.

Twist's enormous surge in share value started at the beginning of the year when it settled an intellectual property lawsuit with Agilent and reported that its first quarter revenues had risen 49 percent year over year. With the Agilent litigation behind it, Twist said it was focusing on growing its business from synthetic biology and next-generation sequencing in the near-term, and that it was planning on investing in drug discovery and DNA data storage opportunities as well.

The company continued increasing its revenues throughout the year, reporting a 42 percent increase in Q2 revenues, a 56 percent increase in Q3 revenues, and a doubling of Q4 revenues. In October, investment bank SVB Leerink initiated coverage of Twist's shares with a Market Perform rating and a price target of $90. At the time, analyst Puneet Souda wrote that Twist "is driving significant scale and lowering costs of synthetic DNA fragments (oligos) that form key ingredients of rapidly growing applications and massive end markets from next-generation sequencing, synthetic biology, [and] antibody drug discovery to emerging DNA data storage."

It was also a good year for PacBio, which had to rebound after the failure of its $1.2 billion merger deal with Illumina. As a start the company said it planned to enter the Chinese clinical sequencing market and grow its sales and marketing organization.

Throughout 2020 PacBio's shares continued to climb as it announced several research collaboration deals. In April, it said its long-read sequencing technology was being used in multiple research studies on the SARS-CoV-2 virus and COVID-19 host immune response, including in an effort with Laboratory Corporation of America to sequence a large number of SARS-CoV-2 genomes from deidentified positive samples. PacBio also teamed up with Children's Mercy Kansas City and Microsoft to improve diagnostic yield for rare disease sequencing, and with Invitae to use long-read next-generation sequencing to help develop diagnostic testing for epilepsy.

PacBio also got a boost in October when it released its Sequel IIe system, a new version of its next-generation sequencing platform, which could lower computing costs for researchers using HiFi reads, the firm's most accurate data type.

The news was not as good for Myriad in 2020. In February, the company reported that its fiscal second quarter revenues declined 10 percent year over year due to billing issues in its prenatal business. After the miss the company announced that then-CEO Mark Capone would step down immediately and CFO Bryan Riggsbee would take the helm in the interim. The firm eventually named Paul Diaz, formerly president and CEO at Kindred Healthcare, as the new president and CEO.

In April, the company was forced to withdraw its FY2020 guidance because of the pandemic. And the negative quarterly financial news also continued with a 24 percent decline in Q3 revenues, a 57 percent tumble in Q4 revenues, and 22 percent decline in fiscal Q1 2021 revenues.

In June, two Medicare Administrative Contractors released draft local coverage determinations denying a request from Myriad to expand coverage of its EndoPredict breast cancer gene expression test. The decisions from CGS Administrators and Wisconsin Physicians Service Insurance Corporation came after Myriad submitted additional data and requested expanded access to the test for assessing the benefit of extended endocrine therapy for women with breast cancer.

Also in June, a US federal court judge denied Myriad's attempt to dismiss a whistleblower lawsuit alleging that the company had engaged in misconduct and fraud. The suit alleges that Myriad and its wholly owned subsidiary Crescendo Bioscience engaged in two schemes to improperly induce the ordering of the Vectra test for rheumatoid arthritis. Myriad filed a motion to dismiss the case, saying the complaint contained "only threadbare allegations." But the court denied the motion, allowing the case to proceed.

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