GenomeWeb Top 40 Rises Less Than 1 Percent in August, In Line With Broader Market

NEW YORK – Stocks of omics and molecular diagnostics companies rose slightly in August, tracking the broader market.

Overall, the GenomeWeb Top 40 was up less than 1 percent. The Dow Jones Industrial Average rose 2 percent, while the Nasdaq and Nasdaq Biotech Index both rose less than 1 percent. Of the 40 firms tracked by GenomeWeb, 18 saw their stock prices rise month over month, 21 saw their shares decrease in value, and one firm's shares remained flat.

CareDx led the winners in August as its shares rose 54 percent month over month, driven by positive Q2 financial results and a favorable action by the US Centers for Medicare and Medicaid Services regarding noninvasive blood-based surveillance testing for solid organ allograft rejection.

The company also raised its full-year 2024 revenue guidance from a range of $274 million to $282 million to a range of $320 million to $328 million.

CMS said in August that Medicare administrative contractors have backed off finalizing a proposed local coverage determination (LCD) issued a year ago covering noninvasive blood-based surveillance testing for solid organ allograft rejection. The proposed LCD would have limited reimbursement for tests including CareDx's AlloSure, AlloMap, and HeartCare products. As such, the decision not to finalize the proposal was seen as a boon to the company.

Following the announcement, investment bank BTIG upgraded its rating for CareDx to Buy from Neutral and established a price target of $40 per share.

Exact Sciences posted the second-largest gain in August, with shares up 35 percent month over month. At the end of July, the company reported Q2 2024 revenues of $699.3 million, up 12 percent year over year and beating analysts' average estimate of $690 million. The company also set a new record for quarterly test volume, performing more than 1 million Cologuard colorectal cancer tests. The company also noted that the US Food and Drug Administration recently granted an investigational device exemption for the company's multi-cancer early detection (MCED) test, allowing it to be used in a real-world evidence study. It enrolled its first patient in the study in August.

Veracyte posted the third-largest gain in August, with shares up 31 percent. During the month, the company reported Q2 2024 revenue of $114.4 million, up 27 percent from $90.3 million in Q2 2023 and beating analysts' average estimate of $100.3 million. It raised its full-year 2024 revenue guidance to $432 million to $438 million, up from a previous range of $402 million to $410 million.

Ginkgo Bioworks posted the largest decline in stock price in August among GenomeWeb Top 40 companies with its share price falling 56 percent month over month. The company reported Q2 2024 revenue of $56.2 million, down 30 percent from $80.6 million in Q2 2023. It also executed a 1-for-40 reverse stock split, which reduced the company's outstanding common shares from around 2.05 billion to around 51.4 million.

Following the split, BTIG analyst Mark Massaro issued an investor note in which the bank maintained its Sell rating and lowered its price target from $8 to $7 per share.

Pacific Biosciences posted the second-largest decline in August with shares down 34 percent month over month. The company reported Q2 2024 revenues of $36.0 million, down 24 percent from $47.6 million in Q2 2023 and below the consensus Wall Street estimate of $40.9 million. Instrument sales fell 51 percent year over year.

In a note to investors, JP Morgan analyst Rachel Vatnsdal wrote that while the bank sees the company's technology "positioned well for long-read and short-read sequencing market opportunities," a long sales cycle and difficult macroeconomic conditions limit "near-term visibility." She maintained the bank's Neutral rating.

Canaccord Genuity analyst Kyle Mikson, meanwhile, maintained the bank's Buy rating but lowered its price target from $3.50 to $3, noting that while Pacific Bio "continues to experience elongated purchasing cycles" and "macro headwinds," it has "implemented aggressive programs to reaccelerate growth while reducing cash burn."

908 Devices posted the third-largest decline in August with its share price down 31 percent. The company reported Q2 2024 revenues of $14.0 million, up 16 percent from $12.1 million in Q2 2023, which beat analysts' average estimate of $13.7 million. The company missed Wall Street's consensus bottom-line estimate by $.03 per share.