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End of Summer Sees Cooling of Omics/MDx Stocks

NEW YORK (GenomeWeb) – Shares of omics research tools and molecular diagnostic firms continued on a bumpy ride in September as the GenomeWeb Daily News Index slipped a little more than 1 percent compared to the end of August.

Overall, just five of the 29 firms in the index saw gains month over month, led by Sigma-Aldrich (+31 percent), while CombiMatrix (-33 percent), Nanosphere (-32 percent), and Veracyte (-22 percent) saw deep losses in September.

The index's results for the month comes after a gain of almost 3 percent in August, which followed a 5 percent drop in July, reflecting continued volatility among omics/MDx shares — a trend shared by biotech stocks, in general, over the past several months. The performance of the GWDN Index was also in line with the broader markets as the Dow Jones Industrial Average retreated a fraction of 1 percent month over month. The Nasdaq was down 2 percent and the Nasdaq Biotech Index slid 1 percent.

The big winner last month was Sigma-Aldrich, whose shares shot up on the news that Merck KGaA is buying the St. Louis-based firm for $17 billion. Sigma-Aldrich's stock has been up as much as 35 percent since the proposed deal was announced, and shareholders remained enthusiastic about the acquisition even after a lawsuit was filed challenging it.

Other companies whose stock improved last month included Cepheid (+10 percent), Myriad Genetics (+7 percent), Luminex (+3 percent), and Thermo Fisher Scientific (+1 percent).

Meanwhile, CombiMatrix started the month by announcing a contract with Blue Cross Blue Shield of Illinois, providing the insurer's members access to CombiMatrix's menu of CombiSNP microarray-based diagnostic testing services for developmental disorders and oncology. That could not prevent the sharp decline in its share price in September, however, which followed a 15 percent drop in August. Since the start of 2014, the company's stock has declined 48 percent.

Nanosphere's shares also took a tumble, and its September loss followed a 45 percent plummet in its share price during August. The month-ago drop was precipitated by the company's announcement that it was lowering its full-year 2014 revenue guidance. The company followed that up by announcing early last month that it was exploring strategic alternatives and has hired Jefferies to advise it during the process.

Last week, Nanosphere disclosed that it has been warned by Nasdaq that it is not in compliance with a listing requirement of a minimum closing bid price of at least $1, and the firm could face delisting action. Nanosphere has until March 18 to regain compliance.

Lastly, the big news for Veracyte was its $21 million buy of Allegro Diagnostics, a deal that it said will extend its business into the lung cancer molecular diagnostics market. The South San Francisco, Calif.-based firm's stock inched up a fraction of 1 percent the day after the transaction was announced, but its shares have steadily fallen since.

Also of note, Exact Sciences' shares were down 7 percent month over month in September after rising 34 percent in August, when the US Food and Drug Administration approved its Cologuard colorectal cancer screening test, while the Centers for Medicare and Medicaid Services issued a proposed national coverage determination for it.

Pacific Biosciences' shares took a 16 percent hit last month, returning much of its 28 percent gain in August month over month. There were no apparent drivers for the decline.