GenomeWeb Top 40 up 8 Percent in November, Outpacing Broader Market

NEW YORK – Stocks of molecular diagnostics and omics companies were up in November, posting gains beating the broader market.

Overall, the GenomeWeb Top 40 was up roughly 8 percent. By comparison, the Dow Jones Industrial Average was up only 6 percent, while the Nasdaq was up 4 percent and the Nasdaq Biotech Index was up 6 percent. Of the 40 firms tracked by GenomeWeb, 24 saw their stock prices rise month over month, and 16 saw shares drop in value.

Lab firm NeoGenomics led the winners in November, as its stock was up 47 percent month over month. During November, NeoGenomics reported that its Q3 2022 revenues were up 6 percent year over year, with clinical services revenues up 4 percent and pharma services up 18 percent. The company appointed a new CEO, Chris Smith, in August and has moved to improve its laboratory optimization as well as productivity and revenue cycle management.

In a note to investors, BTIG analyst Mark Massaro said that Wall Street had been caught "offguard" by NeoGenomics' "surprisingly decent to good Q3," though he questioned "how durable these improving trends are" and maintained a Neutral rating for the firm.

NeoGenomics also announced in November that it is partnering with pharma firm ImmunoGen to launch a biomarker testing program for patients with epithelial ovarian cancer to identify individuals whose tumors express the folate receptor alpha (FRα) protein and may therefore be candidates for ImmunoGen's antibody-drug conjugate Elahere (mirvetuximab soravtansine-gynx).

10x Genomics shares were up 42 percent month over month, making it the second-best performing company in the GenomeWeb Top 40 in November. The company reported during the month that its Q3 2022 revenues were up 5 percent year over year, driven primarily by instrument sales. 10x also launched its Barcode-Enabled Antigen Mapping (BEAM) kit for antibody and T-cell receptor discovery on the company's Chromium single-cell immune profiling platform.

In a note to investors, JP Morgan analyst Julia Qin said that 10x had "strong competitive positioning in both spatial and single cell markets" and maintained an Overweight rating, though the bank lowered its price target from $65 to $55 due to limited near-term visibility.

Veracyte shares were up 38 percent month over month, coming in third among the GenomeWeb Top 40. At the beginning of November, the company reported that its Q3 2022 revenues were up 25 percent year over year, driven by an increase in sales of its Decipher Prostate Genomic Classifier and Afirma Genomic Sequencing Classifier tests. The company also noted that it had received positive coverage decisions for the Decipher test from three commercial payors representing over 20 million members in total, and that it had signed four new commercial payor contracts for the Afirma assay, bringing the test's in-network coverage to over 230 million individuals. Additionally, it reported that Decipher received "Level 1" evidence designation in the National Comprehensive Cancer Network's 2023 prostate cancer guidelines. Veracyte raised its full-year 2022 revenue guidance to between $288 million and $293 million, up from its previous guidance of $272 million to $280 million.

CareDx posted the largest decline in November, with its stock down 35 percent month over month. The company reported that its Q3 2022 revenues were up 5 percent year over year but fell short of the consensus Wall Street estimate and announced it was lowering its full-year 2022 guidance to between $320 million and $325 million, down from its prior guidance of between $325 million and $335 million.

In a note to investors, BTIG's Massaro maintained the bank's Buy rating for CareDx but lowered its price target from $37 to $28.

Not far behind CareDx, NanoString Technologies' stock was down 33 percent month over month as the company announced plans to lay off 95 employees, roughly 10 percent of its workforce. It reported Q3 2022 revenues that were down 21 percent year over year and fell short of the consensus Wall Street estimate. The company lowered its full-year 2022 guidance to between $125 million and $127 million, down from a prior guidance of between $140 million and $150 million.

Ginkgo Bioworks' stock was down 27 percent year over year. The company's Q3 2022 revenues fell 14 percent year over year but beat the consensus Wall Street estimate. The company also raised its full-year 2022 revenue guidance to between $460 million and $480 million, up from its previous guidance of between $425 million and $440 million.

The new guidance included lower foundry revenues in the range of $150 million to $170 million — previously between $165 million and $180 million — and biosecurity revenue of at least $310 million, up from $260 million. In a note to investors, BTIG's Massaro noted the decline in the company's foundry business and lowered the bank's price target to $4 from $6, citing "uncertainties in life sciences and the broader macroeconomic environment."

Ginkgo also announced during the month that it sold $100 million worth of Class A common shares to BTIG.