GenomeWeb Top 40 Down 3 Percent in December, Though More Resilient Than Broader Market

NEW YORK – Stocks of molecular diagnostics and omics companies decreased in December, though they slightly outperformed the broader market.

Overall, the GenomeWeb Top 40 was down roughly 3 percent. By comparison, the Dow Jones Industrial Average was down 4 percent, while the Nasdaq fell 9 percent, and the Nasdaq Biotech Index was down 3 percent. Of the 40 firms tracked by GenomeWeb, nine saw their stock prices rise month over month, and 31 saw shares drop in value.

NanoString Technologies led the winners, as its stock was up 14 percent month over month. This marked a rebound from a 33 percent month-over-month drop in November when the company announced plans to lay off 95 employees, roughly 10 percent of its workforce, and 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.

At the beginning of December, NanoString announced it had begun shipping its new CosMx Spatial Molecular Imager and AtoMx Spatial Informatics Platform.

Exact Sciences was up 10 percent month over month, making it the second-best performing company in the GenomeWeb Top 40 in December. Exact's stock popped in the middle of the month after competitor Guardant Health — which saw the biggest decline among Top 40 companies in December — released disappointing trial results for its blood-based colorectal cancer screening test, Guardant Shield, which is expected to compete with Exact's Cologuard test.

Exact also presented data at the San Antonio Breast Cancer Symposium in December that indicated its Profile for the Omission of Local Adjuvant Radiotherapy (POLAR) gene expression signature could predict which women with early-stage breast cancer would benefit from radiotherapy.

Protein analysis firm Quanterix posted a modest 4 percent month-over-month gain, the third highest among Top 40 companies in December. The company's assays were part of results presented by drugmakers including Eisai, Biogen, and Eli Lilly at the 15th Clinical Trials on Alzheimer’s Disease (CTAD) conference held in San Francisco at the beginning of the month.

As noted above, Guardant Health saw the biggest decline in December, as its stock fell 48 percent month over month following the release of disappointing data on the performance of its Guardant Shield colorectal cancer test. Results from its ECLIPSE trial put the test's performance at 83 percent sensitivity and 90 percent specificity for identifying patients who would go on to be diagnosed with colorectal cancer. The assay also picked up 13 percent of patients with advanced adenomas.

That performance exceeded the criteria set by Medicare in a national coverage determination, and Guardant said it still plans to submit the test to the US Food and Drug Administration early this year, but analysts and investors were disappointed that the test's sensitivity in the trial was lower than previously released retrospective data that indicated it could have sensitivity as high as 91 percent.

In a note to investors following the release of the trial results, Puneet Souda of SVB Securities said the ECLIPSE results were "much lower" than the firm's expectation both for cancer and advanced adenoma detection and suggested that the FDA might not allow adenoma detection to be on the test's label if approved.

Shares of genetic testing firm Invitae fell 37 percent month over month, marking the second largest decline among Top 40 companies. Invitae is in the midst of a restructuring effort launched this summer and recently laid off 1,000 employees. In December, it sold its portfolio of Archer next-generation sequencing research-use assays to Integrated DNA Technologies (IDT) for $48 million as part of this restructuring.

Diagnostics firm Cue Health was down 35 percent in December, the third largest decline. The company didn't report any news during the month that appeared to drive the drop.