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Illumina Stock Drags GenomeWeb Index Down in January

NEW YORK – The GenomeWeb Index fell more than 2 percent in January, reversing the increases of the previous few months.

The index outperformed the Nasdaq Biotechnology Index — which fell nearly 6 percent — but was itself outperformed by the Dow Jones Industrial Average and the Nasdaq, which fell nearly 1 percent and gained nearly 2 percent, respectively. Individual stock performance in the GenomeWeb Index was balanced in January as 16 of the 32 stocks saw gains and 16 saw losses.

10x Genomics, the latest addition to the GenomeWeb Index, took the top spot for gainers in January with a 20 percent increase in share price. Twist Bioscience (+18 percent) and Invitae (+16 percent) rounded out the top three performers.For Invitae, this meant a recovery from December, when its share price dropped 19 percent drop.

The biggest loser in January was Illumina, which saw its shares decline 13 percent. Castle Biosciences (-10 percent) and Pacific Biosciences (-9 percent) were also in the bottom three. Castle had been one of December's highest gainer with a 28 percent increase in share price.

At the 38th annual JP Morgan Healthcare Conference in San Francisco in January, 10x Genomics Cofounder and CEO Serge Saxonov told analysts that the company had $170 million in revenue for the first three quarters of 2019 — representing about 75 percent year-over-year growth — and more than 1,500 installed Chromium instruments, each generating about $150,000 annually in consumables revenue.

Saxonov also said that the company sees a short-term market opportunity of approximately $13 billion for its single-cell and spatial tissue analysis products and noted that 10x has been busy developing new technologies and planning future products.

Twist completed a $50 million stock offering at the end of January. The DNA synthesis firm said that it issued approximately 2.2 million shares of common stock at an average price of $22.32 per share.

Meanwhile, Invitae's shares rose after the company announced preliminary 2019 revenues of around $216 million, representing 45 percent growth over $147.7 million the prior year, despite falling short of the consensus Wall Street estimate of $219.9 million and its own annual revenue projections of $220 million. 

Invitae estimated that it would accession more than 725,000 samples in 2020 and bring in more than $330 million in revenue, slightly above current Wall Street projections.

On the side of the decliners, Illumina started the month by being forced to terminate its proposed $1.2 billion acquisition of PacBio, an issue that also adversely affected PacBio's shares in January. Per their agreement, Illumina will pay PacBio a termination fee of $98 million and will make continuation payments totaling $34 million over the next three months.

Investment banking firm Evercore ISI also downgraded Illumina's shares to an "in line" rating, with a price target of $340, noting that the firm "had a challenging 2019, with a few curveballs being thrown," including declines in its microarray and direct-to-consumer business, headwinds in China, and delays in population genomics projects.

Illumina's shares were also affected when it reported fourth quarter and FY2019 earnings later in January. Despite the company meeting or beating analyst estimates on the top and bottom lines for both time periods, investors may have reacted badly to its first quarter 2020 revenue estimate of $850 million to $855 million. Analysts had estimated revenues of $861.1 million for Q1.

Editor's Note: Starting this month, 10x Genomics joined the GenomeWeb Index. The company went public in September 2019 and has a current market capitalization of $8.90 billion.