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Omics Tools and MDx Stocks Dip Slightly in March, Dragged Down by Several Genetics Firms

NEW YORK – The performance of molecular diagnostics and omics stocks were mixed in March, as shares of several genetics firms traded down significantly, running counter to gains in the broader market.

Overall, the GenomeWeb Top 40 was down 1 percent. In comparison, the Dow Jones Industrial Average rose 4 percent month over month from February, while the Nasdaq was up 3 percent and the Nasdaq Biotech Index closed up 4 percent for March. Despite the relatively small decline, losers significantly outnumbered winners, with 27 of the 40 firms tracked by GenomeWeb seeing their stock price drop month over month and 13 seeing month-over-month increases.

Three genetics companies led the decliners with NeoGenomics down 43 percent, Sophia Genetics down 40 percent, and Natera down 38 percent. NeoGenomics and Natera both posted smaller losses in February (-5 percent and -7 percent, respectively), while Sophia Genetics was up 9 percent month over month in February.

For most of March, NeoGenomics was down a more modest 10 percent to 15 percent from its February close. The company's stock plummeted on March 29, though, following an announcement that it expects Q1 2022 revenues to fall below the low end of its guidance and that CEO and board member Mark Mallon was leaving the company, effective immediately. Additionally, NeoGenomics withdrew its full-year 2022 guidance.

In an investor note, Cowen analyst Dan Brennan said that Mallon's lack of clinical lab experience and the disappointing performance of NeoGenomics' lab led to his departure. The company's announcement that it might miss its Q1 2022 guidance followed its lowering of its Q4 2021 guidance.

Natera also experienced visible troubles during March as short seller Hindenburg Research published a report accusing the company of driving growth through deceptive sales and billing practices and that payors were using prior authorization requirements for Natera tests in response to what they considered excessive billing. Natera has denied Hindenburg's claims.

Natera also suffered a blow when City of Hope researchers published a study suggesting the company's Signatera assays for monitoring recurrence in colorectal cancer patients may be less effective at detecting recurrence than standard-of-care imaging and blood protein tests.

March also saw Natera lose a false advertising lawsuit filed against it by CareDx, with a jury awarding CareDx $21.2 million in compensatory damages and $23.7 million in punitive damages.

Seeking to put on a brave face, Natera's executives and directors agreed in the middle of March to take company stock instead of salaries and retainers for the remainder of 2022, and Roelof Botha, lead independent director of Natera's board of directors and partner at Sequoia Capital, made a $5 million share purchase in Natera. The firm's stock has rebounded somewhat since then, closing out the month at $40.68, up 34 percent from a low of $30.32 on March 15.

The reasons for Sophia Genetics' decline are less clear. The company posted strong earnings during its recent Q4 2021 report, with revenues up 40 percent year over year, though its full-year 2021 revenues of $40.5 million fell short of the Wall Street consensus estimate of $40.9 million. Investment bank Cowen maintained its Outperform rating for the company following the earnings results, while JP Morgan maintained its Overweight rating.

Among the gainers, proteomics startup Quantum-Si led the way, rising 13 percent during March. That follows a 13 percent decline in February. The company, which is still pre-revenue, made little news during the month. It released its Q4 and full-year 2021 results at the end of February, reporting that its Q4 net loss more than tripled year over year. During a conference call following release of the results, Jonathan Rothberg, the company's founder and interim CEO, said it was ramping up chip production and working with vendors to scale up reagent supplies in anticipation of a launch of its proteomics platform in the second half of 2022.

Chinese cancer diagnostics firm Burning Rock Biotech was up 10 percent month over month, following a 6 percent decline in February. The company announced in March that it has launched its first assay for minimal residual disease detection and that it plans to launch a six-cancer early detection test in China once that country's current COVID-19 lockdown ends.

The company released its Q4 and full-year 2021 results in March, posting a 12 percent jump in Q4 revenues year over year as well as an 18 percent rise in full-year revenues. Burning Rock also announced that the National Medical Products Administration of China approved its nine-gene sequencing assay, LungCure CDx, as a Class III medical device.

Thermo Fisher Scientific was up 9 percent in March after seeing its stock drop 6 percent in February. During the month, the company received CE-IVD marking for its Ion Torrent Genexus Dx Integrated Sequencer and said it is making the platform commercially available for diagnostic testing and clinical research.

It also announced it is participating with Helix and Rosalind in a project funded by the National Institute of Biomedical Imaging and Bioengineering to develop a new genotyping method for SARS-CoV-2 that will speed up the identification of new variants of the virus.

GenomeWeb Top 40        
Company Ticker 31-Mar-22 28-Feb-22 % change
Adaptive Biotechnologies ADPT 13.88 14.43 -3.81
Agilent Technologies A 132.33 130.36 1.51
Becton Dickinson* BDX 259.33 271.28 -4.41
Berkeley Lights BLI 7.11 7.67 -7.30
Bio-Rad Laboratories BIO 563.23 625.96 -10.02
Bio-Techne TECH 433.04 419.41 3.25
Bruker BRKR 64.30 70.37 -8.63
Burning Rock Biotech BNR 9.29 8.43 10.20
CareDx CDNA 36.99 38.38 -3.62
Castle Biosciences CSTL 44.86 43.29 3.63
Cue Health HLTH 6.45 8.27 -22.01
Danaher** DHR 293.33 274.41 6.89
Exact Sciences EXAS 69.92 78.06 -10.43
Fulgent Genetics FLGT 62.41 62.30 0.18
Ginkgo Bioworks DNA 4.03 4.50 -10.44
Guardant Health GH 66.24 66.27 -0.05
Hologic HOLX 76.82 71.17 7.94
Illumina ILMN 349.40 326.60 6.98
Invitae NVTA 7.97 10.79 -26.14
Meridian Bioscience VIVO 25.96 25.30 2.61
Myriad Genetics MYGN 25.20 24.38 3.36
NanoString Technologies NSTG 34.75 35.46 -2.00
Natera NTRA 40.68 65.75 -38.13
NeoGenomics Laboratories NEO 12.15 21.41 -43.25
Pacific Biosciences PACB 9.10 11.92 -23.66
Personalis PSNL 8.19 10.50 -22.00
PerkinElmer PKI 174.46 179.61 -2.87
Qiagen QGEN 49.00 49.69 -1.39
Quanterix QTRX 29.19 33.74 -13.49
Quantum-SI QSI 4.68 4.16 12.50
Quidel QDEL 112.46 105.79 6.30
Seer SEER 15.24 15.32 -0.52
SomaLogic SLGC 8.02 9.09 -11.77
Sophia Genetics SOPH 7.73 12.80 -39.61
Thermo Fisher Scientific*** TMO 590.65 544.00 8.58
Twist Bioscience TWST 49.38 55.94 -11.73
Veracyte VCYT 27.57 27.80 -0.83
Waters WAT 310.39 316.73 -2.00
23andMe ME 3.83 4.47 -14.32
10x Genomics TXG 76.07 81.47 -6.63
GenomeWeb Top 40 Average 102.89 104.18 -1.24  
*Becton Dickinson paid a dividend of $.87 on March 9
**Danaher paid a dividend of $.25 on March 24
***Thermo Fisher Scientific paid a dividend of $.30 on March 15