NEW YORK – The GenomeWeb Index ended a three-month winning streak in September, falling 7 percent as the wider markets took dives of their own.
The index underperformed the Dow Jones Industrial Average, the Nasdaq, and the Nasdaq Biotechnology Index which fell 4 percent, 5 percent, and 5 percent last month, respectively. The performance of individual stocks in the GenomeWeb Index was largely negative in September, as 32 of the 35 stocks saw losses and only three saw gains.
Quidel led the gainers in September with a 9 percent increase in share price, followed by Genetron (+4 percent) and Thermo Fisher Scientific (+3 percent).
Berkeley Lights led the decliners in September with a 45 percent drop in stock price, followed by Pacific Biosciences and NanoString Technologies, which both lost 18 percent. This was Berkeley Lights' second month in a row leading the decliners. The company's shares dropped 22 percent in August.
Berkeley Lights' stock took a 30 percent tumble in two days mid-September after Scorpion Capital published a short-selling report accusing the company of "fleecing customers and IPO bagholders with a $2 million black box that's a clunker, while insiders and Silicon Valley bigwigs race[d] to dump stock."
The report claimed to contain stories from customers who were "tricked or misled" into buying the company's stock, warned of the company's "looming collapse," and said its product claims and practices "may constitute outright fraud."
Though this report caused the stock to take a very sharp downturn, investment analysts who cover the firm said the company's business proposition remains intact and they expressed optimism about its long-term prospects.
In a note to investors, JP Morgan's Julia Qin reiterated her Overweight rating on Berkeley Lights' shares, writing that she sees "little merit in most of the accusations made in the short report, and we believe the underlying value proposition of Berkeley Lights' Beacon platform stays intact."
Further, Qin added, the company had customers on site the same week the report came out who expressed no concern in reaction to it, and the firm's management remains confident in the path forward.
"While a few visibility questions remain on the newer commercialization models (subscription and partnerships), this will improve over time as the company gains more operating experience with these models," Qin wrote. "We believe the drastic stock reaction since yesterday is way overdone and creates an attractive opportunity to revisit the story."
There didn't seem to be specific reasons for the declines in PacBio or NanoString's shares. Indeed, PacBio had a rather positive September. The company scored a victory in China in a patent dispute against a Taiwanese firm. And Canaccord Genuity initiated coverage of the company's shares with a Buy rating and a 12-month price target of $45.
The declines for both firms may have simply followed from the general stock market declines.
On the side of the gainers, Quidel's stock likely benefited from a $647 million contract awarded by the US Department of Defense to four companies, including Quidel, to purchase over-the-counter SARS-CoV-2 test kits. Quidel's contract was valued at $284.2 million to cover the delivery of 25.6 million tests.
Craig-Hallum analyst Alex Nowak wrote that the US government's recently announced plan to increase point-of-care COVID-19 testing "feeds directly into [Quidel's] strengths," adding that the company "should be in a good position" to supply the demand from the federal government.
|Burning Rock Biotech||BNR||17.88||18.63||-4.03|
|Thermo Fisher Scientific***||TMO||571.33||554.95||2.95|
|GenomeWeb Index Average||142.97||152.97||-6.54|
|*BD paid a dividend of $.83 per share on Sept. 8|
|**Danaher paid a dividend of $.21 per share on Sept. 29|
|***Thermo Fisher paid a dividend of $.26 per share on Sept. 14|