NEW YORK – The GenomeWeb Index rose more than 4 percent in November, continuing the positive trend it exhibited in September and October. This month, however, the index underperformed the broader markets, which swung sharply upward in reaction to positive news from Pfizer and Moderna on their coronavirus vaccine trials.
The Dow Jones Industrial Average, the Nasdaq, and the Nasdaq Biotechnology Index rose 12 percent, 12 percent, and 11 percent, respectively, in November. Individual stock performances in the GenomeWeb Index were largely positive last month, as 31 of the 37 stocks saw gains and only six saw losses.
Several companies saw double-digit growth in their share prices this month. Veracyte led the gainers with a 57 percent increase, followed by Twist Bioscience (+46 percent) and Myriad Genetics (+41 percent).
Quidel led the decliners in November with a 27 percent drop in stock price. Bio-Rad Laboratories and Burning Rock Biotech each lost 8 percent in November. Burning Rock had been one of October's top-three gainers with a 23 percent increase in share price.
Positive earnings news pushed shares of Veracyte, Twist Bio, and Myriad higher last month. Veracyte reported flat year-over-year revenues for the third quarter, but the company's revenues beat Wall Street's average estimate. Importantly, analysts reacted well to the company's results, which it attributed to faster-than-expected recovery of volumes of its Afirma genomic sequencing classifier test for thyroid cancer.
Twist's shares rose after the company reported that revenues for its fiscal fourth quarter more than doubled year over year, thanks largely to its core synthetic biology and next-generation sequencing product lines.
The company also announced that it is planning a push to convert more agricultural biotechnology customers from SNP arrays to its NGS-based panels and to develop products for customers working on liquid biopsy and other cancer diagnostic tests.
And despite reporting that its revenues for the three months ended Sept. 30 declined 22 percent year over year, Myriad's shares also rose in November after the firm beat the consensus Wall Street estimate on both the top and bottom lines.
Myriad also said it has implemented a new fetal DNA enrichment method for its Prequel noninvasive prenatal screening test that it hopes will further increase uptake of the test among clinicians and patients. The improvement adds to various strategies providers of NIPT have used to enhance their offerings over the years, both on the technology side and regarding the data analysis.
The slide in Quidel's share price, meanwhile, came after the release of the promising vaccine news that sent the rest of the market soaring. Shares of several in vitro diagnostic companies plummeted following Pfizer's announcement, with the implication being that "sooner vaccine availability obviously translates into a shorter duration of testing tailwinds," and therefore, a "downside risk for companies that are over-levered to COVID-19 testing," such as GenMark, Luminex, OraSure Technologies, and Quidel, according to a note JP Morgan analyst Tycho Peterson wrote to investors.
Other analysts believe investors overreacted to the positive vaccine news. On a conference call with analysts following the release of the company's third quarter earnings at the end of October, Quidel CEO Douglas Bryant said that the firm is continuing to increase its manufacturing capacities for tests and instruments, and that it expects high demand to continue through 2022.
