GenomeWeb Top 40 Down 3 Percent in August, Tracking Broader Market

NEW YORK – Stocks of molecular diagnostics and omics companies were down in August, following the broader market.

Overall, the GenomeWeb Top 40 was down 3 percent. By comparison, the Dow Jones Industrial Average and Nasdaq were each down 2 percent while the Nasdaq Biotech Index was down less than 1 percent. Of the 40 firms tracked by GenomeWeb, 31 saw their stock prices fall month over month, and nine saw their share prices rise.

Natera led the winners in August, as its stock price was up 30 percent month over month. The company announced that its Prospera Lung allograft rejection monitoring platform has received Medicare coverage. It also raised its 2023 revenue guidance to a range of $1.015 billion to $1.035 billion from a previous range of $995 million to $1.015 billion following release of its Q2 2023 earnings results. The Austin, Texas-based firm said its year-over-year test volumes grew 24 percent, processing 617,200 tests in Q2, including 599,000 tests accessioned in its laboratory, compared to approximately 499,900 tests (484,000 accessioned in its laboratory) in Q2 2022. Its Q2 2023 revenues were $261.4 million, up 32 percent from $198.2 million in Q2 2022.

Cue Health posted the second largest gain in August, as its stock price rose 20 percent month over month. The company said at the beginning of the month that it had received a $28 million contract from the US Department of Health and Human Services' Biomedical Advanced Research and Development Authority (BARDA) to develop a multiplex respiratory test.

Cue posted $9.9 million in Q2 2023 revenues in August, which came in at the high end of its guidance, though below the consensus Wall Street estimate of $13.4 million. At the end of the month, Cue shareholder investment management firm Tarsadia Investments sent the company a letter urging it to begin a strategic review and realign its costs.

Castle Biosciences posted the third largest gain during August, with its stock up 18 percent. During the month, the company reported Q2 2023 revenues of $50.1 million, up 44 percent from $34.8 million during Q2 2022 and beating analysts' consensus estimate of $44.2 million. It raised its full-year 2023 revenue guidance to at least $180 million from a previous guidance of $170 million to $180 million.

Proteomics firm Seer posted the largest decline in August with its shares down 48 percent. The company announced during its Q2 2023 earnings call that it was cutting its full-year revenue guidance by roughly a third to a range of $16 million to $18 million, down from its previous guidance of $23 million to $25 million.

During the call, Seer President and CEO Omid Farokhzad said the company "faced significant headwinds in the quarter" and is "taking actions to lower barriers to adoption" of its proteomic platform. The company said it has been impacted by longer sales cycles and weakness in the Chinese market.

NanoString Technologies posted the second largest decline in August with shares down 46 percent. The drop came despite a solid Q2 2023 performance with the company reporting $44.2 million in revenues, up from $32.2 million in the year-ago period and falling just shy of the Wall Street estimate of $42.5 million.

In a note to investors, JP Morgan analyst Rachel Vatnsdal said the Q2 results reinforced the bank's view that NanoString is "a well-positioned player in the spatial biology market," and maintained the bank's Overweight rating.

TD Cowen analyst Dan Brennan suggested in a note to investors that the company's stock price has been undermined by an ongoing patent dispute with 10x Genomics and expectations that the firm will need to raise more money to support its growth.

23andMe posted the third largest decline in August with its shares down 43 percent month over month. The company announced on Aug. 8 that it had laid off 71 employees from its therapeutics business, roughly half the division. This move followed cuts of about 75 jobs in April and, according to CEO and Cofounder Anne Wojcicki, was due to reorganization following the conclusion of a five-year therapeutics development partnership with GSK.