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Surge in Stocks of SARS-CoV-2 Dx Developers Pushes GenomeWeb Index Up 15 Percent in H1 2020

NEW YORK – The GenomeWeb Index rose nearly 15 percent in the first half of 2020, largely on the strength of companies that developed diagnostic tests for SARS-Cov-2 who have seen their stocks surge during the pandemic.

The index outperformed the Dow Jones Industrial Average, the Nasdaq, and the Nasdaq Biotechnology Index, which fell nearly 10 percent, rose 12 percent, and rose nearly 14 percent, respectively, in H1 2020. Individual stock performances in the GenomeWeb Index were largely positive in H1, as 25 of the 32 stocks saw gains and only seven saw losses.

GenMark Diagnostics led the gainers with a 206 percent increase in stock price, while Quidel (+198 percent) and Meridian Bioscience (+138 percent) came in second and third.

Myriad Genetics led the decliners in H1 with a 58 percent drop in stock price. Pacific Biosciences (-33 percent) and Waters (-23 percent) rounded out the list of decreased stocks for the six-month period.

GenMark's skyrocketing stock price could be attributed to investors' approval of its SARS-CoV-2 diagnostic tests. The company's first quarter revenues rose 80 percent after its ePlex SARS-CoV-2 test received Emergency Use Authorization from the US Food and Drug Administration in March. The test drove placements of the firm's ePlex instruments and contributed 5 percent to overall ePlex revenue during the quarter. Further, GenMark received a $749,000 grant from the US Department of Health and Human Services to develop a diagnostic panel incorporating a SARS-CoV-2 viral target, which it then launched in June.  

Quidel also saw its stock surge after it developed products for COVID-19 detection. In March, the firm's RT-qPCR test received FDA EUA and CE marking, and the EUA was later expanded to allow the test to run on additional thermocyclers with additional sample types. In May, the company received EUA for its SARS-CoV-2 rapid point-of-care antigen test, and later received EUA and CE marking for a SARS-CoV-2 assay that does not require an upfront nucleic acid extraction step. And in June, Quidel received $634,643 from HHS to develop a four-analyte antigen test to detect SARS-CoV-2, respiratory syncytial virus, influenza A, and influenza B.

Meridian saw a high demand for its molecular products in H1, specifically for its SARS-CoV-2 detection reagents, which are being used in other companies' diagnostic assays. This led to a fiscal Q2 14 percent revenue increase and allowed the company to raise its full year guidance. The firm also announced a $49 million acquisition of Exalenz Bioscience, bringing breath test platforms for infectious disease detection into Meridian's portfolio.

The news was not so positive for Myriad Genetics in H1. The firm was forced to withdraw its FY2020 financial guidance due to the coronavirus pandemic and decreasing test volumes. As a result, revenues in its fiscal third quarter fell 24 percent. More recently, two Medicare Administrative Contractors released draft local coverage determinations denying a request from Myriad Genetic Laboratories to expand coverage of its EndoPredict breast cancer gene expression test, and a US federal court judge denied the company's attempt to dismiss a whistleblower lawsuit alleging that it had engaged in misconduct and fraud.

And PacBio's stock suffered a huge blow when it announced early in January that it had mutually agreed with Illumina to terminate their merger agreement. The deal, announced in November 2018, would have seen Illumina acquire PacBio for $8 per share — approximately $1.2 billion in cash. In a joint statement, the firms cited a "lengthy regulatory approval process" and "continued uncertainty of the ultimate outcome" in their decision.