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Q3 Earnings Continue to Drive Gains, Losses as November GenomeWeb Index Rises 6 Percent

NEW YORK (GenomeWeb) – The GenomeWeb Index rose more than 6 percent in November, doubling its 3 percent growth in October as third quarter financial reports largely dictated which stocks gained and which lost ground during the month.

The Index significantly outperformed the Dow Jones Industrial Average, the Nasdaq, and the Nasdaq Biotechnology Index, which gained nearly 4 percent, 2 percent, and less than 1 percent, respectively. Stock performances in the November GenomeWeb Index were mostly positive as 15 of the 26 stocks saw gains and 11 saw losses.

Bio-Rad was November's biggest gainer with a 23 percent increase in share price. The firm's Q3 revenues rose 5 percent and beat analysts' average estimates. Its board of directors also authorized a new share repurchase program, granting Bio-Rad the authority to repurchase up to $250 million of outstanding shares of its stock on a discretionary basis.

Foundation Medicine took second place with an 18 percent gain in stock price in November. The company reported a 45 percent rise in its Q3 revenues at the beginning of the month, driven by increases in both its clinical testing and biopharmaceutical businesses. It also beat analyst expectations for the top and bottom lines.

The company further announced yesterday that the US Food and Drug Administration has approved its NGS-based genomic profiling test, FoundationOne CDx (F1CDx), and that the Centers for Medicare and Medicaid Services has concurrently issued a preliminary national coverage determination for the test under the Parallel Review Program. F1CDx is the second IVD to be approved and covered as part of that program, which is voluntary and aims to reduce the time between FDA approval of a device and its coverage by Medicare.

This is Foundation's second month in a row in the top three — the company's stock gained 12 percent in October.

Illumina rounded out November's top three gainers with a 12 percent increase in share price. The firm reported an 18 percent increase in Q3 revenues in late October, but more recently launched the NextSeq 550Dx, an FDA-regulated next-generation sequencer, and said that it has expanded the intended use for the existing MiSeq Dx platform to include formalin-fixed paraffin-embedded tissues.

The firm also received a favorable ruling from the High Court of Justice, Chancery Division, Patents Court in the UK, which ruled largely in Illumina's favor in its patent infringement case against Premaitha Health and Ariosa Diagnostics over IP covering noninvasive prenatal testing.

GenMark Diagnostics led the decliners in November with a 40 percent drop in share price. The firm reported a 7 percent increase in Q3 revenues, but fell short of analysts' estimates, and delivered a 2017 revenue guidance that also fell significantly below what Wall Street had expected. Investment bank Raymond James downgraded GenMark's shares to Market Perform from Outperform.

GenMark's stock lost 23 percent in October, and it had been on a steady decline since it reported somewhat disappointing second quarter earnings results in August.

Pacific Biosciences' shares dropped 25 percent in November after the firm reported a 6 percent loss in Q3 revenues and missed analysts' average estimate for the top line. The company said lower-than-expected sales of its Sequel instrument were to blame, and noted that customers who had early versions of the instrument were experiencing reduced performance because of a part that had degraded faster than anticipated.

NanoString Technologies rounded out the bottom three in November with a 23 percent decline. The company reported that Q3 revenues were up 13 percent and confirmed that it took in $16.9 million in products and service revenue during the quarter, a 12 percent decline from Q3 2016 and a significant shortfall from its initial guidance of $19.5 million to $21.5 million. But even though the results were largely in line with its preannouncement (which had caused the shares to fall 38 percent in October), NanoString's shares fell even further after it announced the termination of its companion diagnostic collaboration with Merck.