NEW YORK – Following a January that saw broad declines among omics and molecular diagnostic firms, the space recovered in February to trade essentially even with the previous month, avoiding the decline in the broader stock market.
There were still more losers than winners, with 24 of the 40 firms tracked by GenomeWeb seeing their stock price fall month over month compared to 16 that saw month-over-month gains. Overall, though, the GenomeWeb Top 40 was essentially flat, down less than 1 percent. In comparison, the Dow Jones Industrial Average fell 4 percent month over month from January, while the Nasdaq dropped 3 percent, and the Nasdaq Biotech Index fell 4 percent.
The decliners were led by Ginkgo Bioworks (-25 percent), Berkeley Lights (-21 percent), and Adaptive Biotechnologies (-17 percent), all of which posted 25 percent-plus losses in January, with Berkeley Lights reporting a 47 percent loss, the steepest January decline among GenomeWeb Top 40 firms.
For Berkeley Lights the decline marked the continuance of a downward trend dating to late summer 2021, when a short-selling report published by Scorpion Capital accused the company of "fleecing customers and IPO bagholders with a $2 million black box that's a clunker, while insiders and Silicon Valley bigwigs race[d] to dump stock." Its closing price of $7.67 is well below its 52-week high of $65.20.
Berkeley Lights reported toward the end of February an uptick in Q4 2021 and full-year 2021 revenues, which increased by 7 percent and 33 percent, respectively, year over year. It also said it expects revenue growth of roughly 30 percent in 2022 compared to 2021. In an investor note following release of the Q4 results, William Blair analyst Brian Weinstein said, however, that the company faced "multiple overhangs" including uncertainty around its ongoing CEO search as well as a transition to a business model more dependent on recurring revenue than capital sales. He maintained the bank's Market Perform rating with a share price target of $6.34.
Ginkgo's 25 percent drop last month followed a 28 percent decline in January. Ginkgo went public in September 2021 via a merger with special purpose acquisition company Soaring Eagle Acquisition. It went to market at $11.15 per share and peaked in early November at $15.86 per share, declining steadily since then. Initiating coverage of the company in January, investment bank BTIG gave it a Buy rating and price target of $12, explaining that it believed Ginkgo's cell programming platform would enable significant innovations in areas like pharma, agriculture, and chemical synthesis. Ginkgo has, however, derived a substantial portion of its revenue in the last year from COVID-19 testing, an area where demand is expected to decline.
Adaptive Biotechnologies' rocky month came despite a solid recent financial report in which it posted a 26 percent rise in Q4 revenue year over year and a 57 percent jump in full-year 2021 revenue. The company projected year-over-year revenue growth of 23 percent in 2021.
On a conference call following release of the results, Adaptive CEO Chad Robins said the company had seen a slowdown during the last weeks of December as the Omicron surge intersected with the holiday season.
Kyle Piskel, Adaptive's interim CFO, said the firm expects Q1 2022 to be its "low watermark."
On the positive side, Meridian Bioscience, one of the few companies to post gains in January, followed up with a 21 percent rise in February. Despite posting a 5 percent decline in Q1 2022 revenue during its recent quarterly earnings report, the company raised its full-year 2022 guidance to between $315 million and $330 million.
Meridian also announced in the middle of February that its subsidiary Magellan Diagnostics had resumed manufacturing and distributing its LeadCare II test kits after a product recall last year.
Bio-Techne's stock was up 11 percent in February, rebounding from a 27 percent decline in January. At the beginning of the month the company posted fiscal 2022 Q2 revenue growth of 20 percent year over year, driven by strong growth in its protein sciences business and its diagnostics and genomics segment with sales of its ExoDx Prostate test growing by what CEO Chuck Kummeth said was "strong double digits" as individuals returned to pre-pandemic patterns of doctors' visits.
Quanterix also made a comeback in February, posting an 11 percent gain following a 28 percent decline in January. In an investor note released following the SVB Leerink Global Healthcare Conference in the middle of February, SVB Leerink analyst Puneet Souda said the company is focused on moving into the diagnostic space, with plans to launch laboratory-developed tests in Alzheimer's in 2023. Additionally, he noted that the company aims to take advantage of potential demand for neurology research and testing "catalyzed by the approval of [Biogen Alzheimer's drug] Aduhelm."
|GenomeWeb Top 40|
|Burning Rock Biotech||BNR||8.43||9.00||-6.33|
|Thermo Fisher Scientific||TMO||544.00||581.30||-6.42|
|GenomeWeb Top 40 Average||104.18||104.60||-0.40|
|*Bio-Techne paid a dividend of $.32 on Feb. 10.|