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GWDN Index Rises 17 Percent in 2014, Led by Exact Sciences; Nanosphere Leads Decliners

NEW YORK (GenomeWeb) – A flush year in the broader biotechnology space lifted the GenomeWeb Daily News Index in 2014. 

The index, which tracks the stock performance of 29 companies in the molecular diagnostics and omics tools space, rose 17 percent year over year, led by Exact Sciences, which saw its stock price more than double during the year. 

Overall, though, the index could not keep pace with the broader biotech market, as the Nasdaq Biotech Index climbed 34 percent in 2014 compared to 2013. However, it outpaced the Dow Jones Industrial Average, which grew 8 percent year over year, and the Nasdaq, which was up 13 percent year over year. 

Exact Sciences' shares grew 134 percent year over year, largely as a result of the US Food and Drug Administration's approval of its Cologuard colorectal cancer screening test. Since gaining approval in August, shares of the Madison, Wis.-based company have risen 61 percent. The company was further bolstered by a final payment decision by the Centers for Medicare and Medicaid Services. 

Last month, an error by CMS in its 2015 clinical lab fee schedule temporarily tamped down Exact Science's stock, which quickly recovered when the error was made public. Last week, Exact Sciences said that CMS will reimburse Cologuard at a rate of $493.

Other big gainers in 2014 were Illumina (+67 percent), Myriad Genetics (+62 percent), and Sequenom (+58 percent). The decliners were led by Nanosphere (-83 percent) and CombiMatrix (-44 percent).

Illumina started 2014 with the launches of the NextSeq 500 System and the HiSeq X Ten Sequencing System, and throughout the year it maintained its market leadership position in the next-generation sequencing space. It also continued its efforts to increase the use of NGS technology into new markets beyond the research-use-only space. Among the deals it reached in 2014 was a supply agreement with Laboratory Corporation of America aimed at developing NGS-based laboratory-developed tests, a collaboration with BioMérieux to develop applications for microbiology sequencing technologies, and deals with Amgen and with AstraZeneca, Janssen Biotech, and Sanofi aimed at developing companion diagnostics.

Myriad's jump follows a down year in 2013 when its shares shed 23 percent of its value from 2012. Some of its year-ago drop-off could be attributed to the US Supreme Court decision that invalidated certain of the company's claims on patents covering BRCA1 and BRCA2 genes.

The BRCA1/2 gene testing front remained a challenge for Myriad in 2014 as competitors, including Quest Diagnostics and Pathway Genomics, continued to launch their own tests and the courts ruled against Myriad in BRCA-related litigation.

However, investors also welcomed news that included FDA approval of Myriad's BRACAnalysis CDx as a companion diagnostic for AstraZeneca's Lynparza (olaparib) for advanced ovarian cancer associated with BRCA genes. Also, the Salt Lake City-based firm acquired molecular diagnostics shop Crescendo Bioscience.

Sequenom's gain was also a reversal of a difficult 2013, when its stock price declined 50 percent year over year. In December, it and Illumina said they would pool all their owned and in-licensed intellectual property relating to their respective non-invasive prenatal tests, putting an end to a years-long dispute alleging patent infringement and resulting in a 24 percent hike in Sequenom's stock price the day the agreement was announced.

A deal with Quest to provide Sequenom's MaterniT21 Plus NIPT nationally also provided a mid-year lift to its shares, and in July Sequenom said that it planned to launch a second NIPT outside the US. The test, called VisibiliT, targets average-risk pregnancies and has a lower cost and content than the MaterniT21 Plus test.

Meanwhile, Nanosphere had a topsy-turvy year, resulting in the steep decline in its share price. Highlights included clearance from the FDA for additonal targets on its Verigene Enteric Pathogens Nucleic Acid Test, and FDA clearance for the firm's test for detecting gram-negative bacteria that cause bloodstream infections. 

In September, though, Nanosphere it announced the hiring of Jefferies to explore strategic alternatives for the company, which may include a possible sale of the firm.

CombiMatrix also failed to gain traction with investors despite winning conditional approvals from New York for the CombiSNP Array for Pregnancy Loss. The company also presented data that chromosomal microarray analysis performed better than standard karyotyping in the analysis of miscarriage tissue, results that could be a positive for the firm, which has forged several partnerships to offer CMA for miscarriage.

Overall, 16 companies in the GWDN Index saw their shares rise in 2014, while 13 firms saw their shares suffer losses.