GenomeWeb Top 40 Down 4 Percent in February, Tracking Broader Market

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

Overall, the GenomeWeb Top 40 was down 4 percent. By comparison, the Dow Jones Industrial Average was down 4 percent, while the Nasdaq was down 1 percent, and the Nasdaq Biotech Index was down 7 percent. Of the 40 firms tracked by GenomeWeb, 29 saw their stock prices fall month over month, and 11 saw shares rise in value.

NeoGenomics Laboratories led the winners, as its stock was up 42 percent month over month. The company reported Q4 2022 revenues of $138.7 million, up 10 percent year over year and above the consensus Wall Street estimate of $130.0 million. The company forecast full-year 2023 revenues of between $545 million and $555 million, above the Wall Street consensus of $535 million.

NeoGenomics also launched a reorganization effort in Q4 aimed at reducing spending and integrating Inivata, which it acquired in May 2021. According to CEO Chris Smith, the restructuring is expected to save roughly $25 million per year in operating expenses. The company also plans to launch its Radar breast cancer test in Q1 2023.

In a note to investors, Craig-Hallum analyst Alexander Nowak said the Q4 results "showed that the turnaround [at NeoGenomics] is occurring, if not accelerating, and initiatives taken in mid-to-late 2022 are already yielding better results."

Personalis posted the second-largest gain in February, with its stock rising 28 percent. The company said at the beginning of the month that it had inked an agreement with Moderna to use its Personalis NeXT platform in a clinical trial of an mRNA-based cancer vaccine.

Olink was the month's third-highest riser, as its shares rose 20 percent month over month. The company, which was added to the Top 40 at the beginning of the year, bounced back after posting the largest decline in January, largely due to a drop in price following the company's pricing of a public offering at $20 per share, several dollars below where it had been trading at the time.

Olink reported during the month Q4 revenues of $57.9 million, up 32 percent year over year and slightly above the consensus Wall Street estimate of $57.3 million. On a conference call following release of the company's Q4 results, Olink CEO Jon Heimer noted strong growth in its kits business and said that by the end of 2022 it had validated assays for 5,000 protein targets. In a note to investors, SVB Securities analyst Puneet Souda suggested that this could mean the next generation of the company's Explore system will target more than the 4,500 proteins that Heimer had originally cited as the firm's goal.

Souda maintained the bank's Outperform rating and raised its price target for Olink to $30.

Twist Bioscience posted the largest decline in February, with shares down 32 percent month over month. At the beginning of the month, the synthetic biology firm provided a second-quarter fiscal year 2023 revenue guidance of $56.5 million, short of the consensus Wall Street estimate of $61.9 million. During its Q1 2023 call, the company noted sluggish biopharma orders as well as negative impacts from the COVID-19 outbreak in China.

In a note to investors, JP Morgan analyst Rachel Vatnsdal said the Q2 guidance "signals continued caution" about Twist's ability to hit its 2023 and 2024 targets. The bank maintained an Underweight rating on the stock and lowered its price target from $24 per share to $21.

SomaLogic posted the second-largest decline in February, as its shares fell 27 percent month over month. There were no developments that appeared to drive the drop. In January, SomaLogic was the Top 40's biggest gainer, with shares up 39 percent.

Bionano reported the third-largest decline in stock price during the month with shares down 26 percent. The company started the month well, obtaining regulatory approval in China for its DNA extraction kit and labeling products. In a Feb. 5 note to investors following the company's investor day, BTIG analyst Mark Massaro painted a rosy picture of its prospects, noting that it is "in the first innings of penetrating clinical uses." The bank reiterated its Buy rating and $3.50 price target, though thus far investors appear to feel differently.