NEW YORK (GenomeWeb) – A steep decline in the broader biotechnology space dragged down shares of life science omics tools and molecular diagnostic firms in September.
Compared to August, the GenomeWeb Index fell nearly 8 percent last month, following a similar nearly 8 percent drop month over month in August. Of the 31 companies comprising the index, just two, NanoString Technologies and Hologic, registered month-over-moth gains in September.
While the overall market was bearish during the month, biotech stocks took an especially hard hit — the Dow Jones Industrial Average slid more than 1 percent last month, while the Nasdaq Composite fell 3 percent, but the Nasdaq Biotechnology Index was down more than 11 percent.
Among the firms in the GenomeWeb Index, Fluidigm fell the furthest, more than 33 percent. Natera (-31 percent), Pacific Biosciences (-27 percent), and T2 Biosystems (-26 percent) also saw significant drops.
Fluidigm's drop in share price followed a 39 percent slump in August. The South San Francisco, California-based firm started September with the announcement of a new single-cell genomics center opened near Melbourne, Australia. However, competitive pressures weighed on its stock.
In a mid-September note by Leerink, the investment bank noted an announcement that Myriad Genetics would be deploying some of its RNA expression diagnostic tests on Thermo Fisher Scientific's QuantStudio product in Europe. Analyst Dan Leonard said that QuantStudio is a direct competitor to Fluidigm's Biomark platform, and "[w]hile this opportunity might have suited Biomark, we think [Fluidigm is] ill-equipped to match the international scale and scope of a company with [approximately] $17 billion in annual revenue."
He further noted that Agena Bioscience, has been reinvigorated and its MassArray platform, a competitor to the Biomark that it acquired from Sequenom last year, has shown new signs of life after languishing for several years.
"Agena's MassArray is gaining share in diagnostics applications such as pharmacogenomics … and solid tumor profiling," Leonard wrote. "The flexibility, breadth of applications, cost, and regulatory status of the MassArray position it [favorably] versus [Fluidigm's] Biomark in these applications."
Meanwhile, there were no obvious drivers for the drop in Natera's share price, and the fall occurred despite indications that non-invasive prenatal tests, such as the company's Panorama NIPT, are gaining traction with insurers for coverage of the technology in the average-risk pregnancy population.
PacBio similarly appeared to be caught in the wake of the widespread sell-off of biotech stocks last month. However, it ended September by announcing the launch of a new single-molecule sequencing platform called the Sequel, and on Thursday, the day after the news was announced, the firm's shares closed up 49 percent.
T2 Biosystems' share drop came in spite of an upgrade from investment bank BTIG to a Buy rating. The company also filed with regulators to sell from time to time up to $100 million of its common stock and said that it plans to initiate a clinical study for a sepsis bacteria test that would complement the firm's approved sepsis fungal pathogen diagnostic test, T2Candida.
NanoString managed to buck the trend last month and saw its stock improve 5 percent month over month. It began September by announcing the European Society for Medical Oncology had added the PAM50 gene signature to its clinical practice guidelines as a prognostic and predictive tool to determine benefit from chemotherapy, a positive for the firm as its Prosigna Breast Cancer Gene Signature Assay is based on the PAM50 gene signature.
NanoString also launched new chemistry that enables analysis of DNA, RNA, and protein analytes from the same sample, on the same cartridge, at the same time, and earlier this week Cowen & Co. initiated coverage of the company with an Outperform rating.
Bio-Reference Laboratories has been dropped from the GenomeWeb Index following the completion of its $1.47 billion acquisition by Opko in August.