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PacBio Leads December GenomeWeb Index Decliners After Termination of Roche Agreement

NEW YORK (GenomeWeb) – The GenomeWeb Index was flat in December while underperforming the Dow Jones Industrial Average and the Nasdaq — which gained 3 percent and 1 percent, respectively — for a second straight month. However, the Index outperformed the Nasdaq Biotechnology Index, which lost more than 3 percent in December.

Stock performance was mostly mixed across the Index with 13 of the 28 stocks seeing gains and 15 seeing losses. Except for a small number of companies who saw large shifts in stock price during the month, the gains and losses were relatively small.

After landing as the Index's second-best gainer in November with a 39 percent increase in share price, Fluidigm landed the best-gainer spot in December with a 13 percent bump. Though the company didn't report any significant news in December, investors may be buying shares in anticipation of a new direction for the company after CEO Gajus Worthington announced he would step down from his positions as CEO and board member in October. He was replaced by S. Christopher Linthwaite.

GenMark Diagnostics recorded a 5 percent bump in share price in December after announcing that it had submitted 510(k) applications to the US Food and Drug Administration for its ePlex sample-to-answer instrument and respiratory pathogen panel.

In a research note, Cowen analyst Doug Schenkel said FDA approval for the ePlex instrument and respiratory panel could come quickly, "setting up [GenMark] for an early- to mid-Q2 US launch."

Quest Diagnostics also saw a 5 percent increase in share price in December, despite reporting an unauthorized third-party intrusion into the MyQuest by Care360 internet app and a breach of personal health information of its users.

Pacific Biosciences led the list of decliners in December after its stock cratered more than 50 percent on the news that Roche had ended the development, commercialization, and licensing agreement between the two companies. This is PacBio's second month in a row as one of the three worst-performing stocks in the GenomeWeb Index — the company dropped 10 percent in November after noting that the order rate for its Sequel instrument was lower than expected and lowering its FY 2016 revenue outlook.

PacBio and Roche first partnered in 2013 to develop a sequencing system based on its single-molecule sequencing technology for diagnostics purposes. And last year, PacBio launched its Sequel system for the research market, which Roche planned to further develop and launch for the clinical market.

Roche said it plans to focus its efforts on developing Genia's nanopore technology for clinical use, instead.

Foundation Medicine saw a 22 percent drop in its share price in December. The firm recently announced that the US Food and Drug Administration had approved its FoundationFocus CDxBRCA test to identify advanced ovarian cancer patients who have mutations in their BRCA1 and BRCA2 genes and are therefore more likely to benefit from Clovis Oncology's PARP inhibitor Rubraca (rucaparib). However, Clovis CEO Patrick Mahaffy highlighted a continuing challenge for companion diagnostics developers, noting that although the Foundation assay is a good one, FDA approval doesn't guarantee adoption by physicians.

T2 Biosystems rounded out the bottom three with a nearly 10 percent drop in share price.