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June GenomeWeb Index Again Outperforms Broader Markets, Driven by M&A News, Company Expansions

NEW YORK (GenomeWeb) – The GenomeWeb Index outperformed the broader stock market for a third month in a row in June, gaining nearly 5 percent.

The index outperformed the Dow Jones Industrial Average, which lost half a percent; the Nasdaq, which gained nearly 1 percent; and the Nasdaq Biotechnology Index, which was up 1 percent. Stock performance in the June GenomeWeb Index was largely positive, as 17 of the 26 stocks saw gains and nine saw losses.

Natera took the top spot in June with a 61 percent increase in share price, while Pacific Biociences (+40 percent) and Foundation Medicine (+38 percent) rounded out the top three gainers.

The biggest loser in June was Enzo Biochem, which saw its shares decline 20 percent. GenMark Diagnostics (-13 percent) and Bruker (-4 percent) completed the list of bottom-three performers.

Natera's stock soared after the company announced its intentions to enter the transplantation market, including plans to launch a clinical test in 2019 to detect acute rejection in kidney transplantation. During a conference call with investors, Natera CEO Matt Rabinowitz discussed the firm's entrance into the transplantation market and highlighted progress it has made in the breast cancer market.

The call followed an announcement earlier in the month in which Natera said that it had harnessed its cell-free DNA technology to identify markers of kidney transplant rejection. The company also said it planned to present data from a retrospective study it conducted with researchers at the University of California, San Francisco at the Transplantation Society International Congress in Madrid. For the study, Natera and UCSF researchers analyzed 300 plasma samples from 193 kidney transplant patients, 52 of whom experienced acute rejection. Looking at cell-free donor-derived DNA, the researchers were able to identify 48 out of the 52 acute rejection cases.

Natera also announced in June that it plans to collaborate with Belgian cancer reference center Institut Jules Bordet on a breast cancer research project using Natera's circulating tumor DNA assay, Signatera. The firm will analyze around 300 plasma samples prospectively collected from 80 patients diagnosed with non-metastatic breast cancer who were all treated with chemotherapy followed by surgery.

PacBio's share increase in June, meanwhile, was not due to a specific event. The stock's rise was fairly steady throughout the month, though analysts speculated that it did receive a boost from the launch of a microbial multiplexing kit for the firm's single-molecule sequencing instrument Sequel.

Finally, Foundation Medicine's stock price skyrocketed on the news that its remaining shares would be acquired by Roche for $2.4 billion in cash. Roche already owns about 57 percent of Foundation's outstanding common stock, following a tender offer in 2015. Under the terms of the definitive merger agreement, Roche will acquire all outstanding Foundation shares that Roche or its affiliates don't already own for $137 per share, a premium of 47 percent and 68 percent over its 30-day and 90-day volume weighted average share price, respectively, on June 18.

Enzo Biochem led the decliners in June — its shares fell after it reported in mid-June that its third quarter revenues fell 5 percent year over year. The firm cited a few issues that resulted in the decline in sales: a medical practice it served decided to internalize its genetic ordering, costing Enzo around $1.9 million; adverse weather; and the loss of an unnamed commercial insurance payor.

Editor's note: Starting next month, Foundation Medicine will be removed from the GenomeWeb Index, due to its impending acquisition by Roche. The GenomeWeb Index will add CareDx, Quanterix, and Bio-Techne, which have market caps of $448.4 million, $309.0 million, and $5.55 billion, respectively.