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NanoString, T2 Biosystems Lead GWDN Index in August as Majority of Stocks Fall

NEW YORK (GenomeWeb) – The GenomeWeb Index dropped more than 2 percent in August, nearly mirroring a 3 percent decline for the Nasdaq Biotechnology Index and partially offsetting a 9 percent gain in July.

Some stocks in the Index, which tracks 30 firms in the omics research tools and molecular diagnostics space, seemed to fade back to steadier positions after positive second quarter earnings reports caused many of them to rise precipitously in July. The declines were confined largely to biotech stocks as the Dow Jones Industrial Average was essentially flat month over month after a 3 percent rise in July, and the Nasdaq rose 1 percent after a 7 percent increase the previous month.

NanoString Technologies led August's winners in the GenomeWeb Index with a 19 percent increase in stock price. The firm reported a 73 percent increase in Q2 revenues on Aug. 3, beating Wall Street expectations for revenues and loss per share, grew its installed base of nCounter instruments, and increased sales of its Prosigna breast cancer test.

NanoString also provided the first details on its companion diagnostic — a gene expression assay looking at 18 markers for immune system response to a tumor — for Merck's anti-PDL-1 drug pembrolizumab (Keytruda). Merck is using the assay in three new Phase III clinical trials to expand the indication for Keytruda, which has been approved as a second-line drug for non-small cell lung cancer when used with a PDL-1 immunohistochemistry companion diagnostic assay.

T2 Biosystems was also among the top three gainers in August with a 17 percent increase in stock price, after leading the losers in July with a 28 percent loss. The firm reported a 75 percent jump in Q2 revenues on Aug. 1, despite announcing in July that it had secured fewer commitments for its T2Candida sepsis test than expected, that it had encountered problems with test results from T2Candida cartridges, and that it had to delay plans to submit its upcoming T2Bacteria bacterial sepsis test to US regulators.

And Exact Sciences continued its top-three streak for a third month with a 6 percent jump in August following a 42 percent stock price increase in July. On Aug. 11, the company announced that its Cologuard colon cancer screening test will be covered by Health Care Services and Florida Blue under updated medical policies. And the Centers for Medicare and Medicaid Services issued an updated evidence of coverage notice affirming that Medicare Advantage plans must include coverage of Cologuard every three years without patient coinsurance, copayments, or deductibles.

The August decliners were led by Myriad Genetics, which saw a 34 percent drop in its stock price after announcing that its fiscal Q4 revenues had fallen 2 percent year over year. The company also forecast EPS and revenues for Q1 2017 and FY 2017 that were well below analyst expectations.

Following the release of the earnings on Aug. 9, Myriad's stock tumbled to a 52-week low, and investment banks Wells Fargo and Piper Jaffray downgraded shares of the firm to Market Perform and Neutral, respectively. Further, Cowen & Co. and Goldman Sachs cut their price targets on Myriad's shares.

Natera and GenMark Diagnostics rounded out the bottom three in August with a 24 percent and 20 percent loss, respectively. There was no overly apparent cause for the declines, however. Natera's loss came in spite of its positive Q2 earnings report on Aug. 4, when the firm reported revenues and a loss per share that beat the average analyst expectations.