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Quidel Stock Plunges in February as GenomeWeb Index Falls 3 Percent

NEW YORK – The GenomeWeb Index fell 3 percent in February, ending the winning streak it had been on for the past several months.

The index underperformed the Dow Jones Industrial Average, the Nasdaq, and the Nasdaq Biotechnology Index, which rose 3 percent, rose 1 percent, and fell 2 percent, respectively, in February. Individual stock performances in the GenomeWeb Index were fairly balanced last month, as 18 of the 37 stocks saw gains and 19 saw losses.

GenMark Diagnostics led the gainers in February with a 42 percent increase in share price, followed by Burning Rock Biotech (+19 percent) and Quanterix (+17 percent). GenMark had been one of January's top three decliners with a 5 percent drop in share price.

Quidel led the decliners in February with a 35 percent drop in stock price. Fluidigm (-29 percent) and Personalis (-20 percent) rounded out the list of decliners for the month. Quidel had been one of the top three gainers last month with a 40 percent increase in share price.

GenMark's shares rose on two pieces of good news for the company: a report that it has been approached by potential acquirers and its estimate-beating fourth quarter earnings report.

The company's shares skyrocketed early in the month after Bloomberg, citing unnamed sources, reported that GenMark was working with a financial advisor on a potential sale.

In a research note, Cowen analyst Doug Schenkel said, "We have always viewed [GenMark] as an attractive takeover target for larger diagnostics companies" and estimated that a deal in the range of $20 to $25 per share was possible. He added that GenMark was the "only remaining publicly traded pure-play syndromic testing company of scale."

Later in February, the company reported an 84 percent increase in Q4 revenues, largely due to increased sales of its molecular diagnostics. The company said it increased manufacturing capacity of its diagnostic products by more than 75 percent compared to the prior year with the completion of the first of two new production lines during the quarter. GenMark Diagnostics CEO Scott Mendel drew attention to the continuing high demand for the firm's ePlex molecular diagnostics respiratory panel for coronavirus testing and said the firm believes that demand for the test will continue to grow for the foreseeable future.

Quidel sat on the other side of the table last month. Although the company reported that its Q4 revenues increased more than fivefold year over year due primarily to COVID-19 product sales, it also reported a delay in its plans to submit an over-the-counter viral antigen test for regulatory authorization and poured cold water on rumors of a potential merger with Qiagen.

Quidel's intended OTC rapid antigen test is expected to be a QuickVue assay that has already received Emergency Use Authorization for point-of-care use but with an additional home-use clearance. The submission to the FDA for OTC has been delayed because of a paucity of infections detected among the cohorts of asymptomatic people tested so far, CEO Douglas Bryant said on a conference call with analysts.