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Genomic Tools Stocks Continue Losing Streak

NEW YORK (GenomeWeb News) – The stocks of many genomic tools and molecular diagnostics vendors fell for the third month in a row as concerns about government funding, softness in some end markets, and general uncertainty about the economy took its toll.

The GenomeWeb Daily News Index dropped a little more than 8 percent in September, following an 8 percent decline for the month of August and a drop of nearly 9 percent in July. Of the 33 stocks that comprise the GWDN Index, only four were up for the month of September.

The top-performing stock was Caliper Life Sciences, which rose 39 percent after an announcement on Sept. 8, that the firm would be acquired by PerkinElmer for $10.50 per share, or a total of $600 million. The purchase price represents a 42 percent premium to Caliper closing price of $7.39 the day before the deal was announced.

Cepheid (+7 percent), CombiMatrix (+4 percent), and Fluidigm (+3 percent) were the other three stocks that went up for the month.

Leading the decliners for the second month in a row was Pacific Biosciences, which followed its 36 percent decline in stock price in August with a 55 percent fall in September. The firm's stock has tumbled from $11.01 at the end of July to $2.89 in afternoon trade today on the Nasdaq.

A primary catalyst for the drop in September was PacBio's disclosure that it is laying off 130 employees as a result of "uncertainties associated with the economic environment" and to put the company in a position for success in the long term.

Another sequencing technology firm, Complete Genomics, also was hit hard in September, seeing its stock fall 35 percent for the month. Other big decliners for the month included Rosetta Genomics (-33 percent) and Nanosphere (-30 percent).

One factor in the continued struggles for life science tools stocks is concern over funding from government sources both in the US and abroad. However, the US Senate Appropriations committee recently passed a fiscal-year 2012 spending plan that would cut funding for the National Institutes of Health by less than 1 percent and trim funding for the National Human Genome Research Institute by around 1 percent.

The GWDN Index drop of 8 percent outpaced declines of 6 percent for both the Dow Jones Industrial Average and the Nasdaq. The Nasdaq Biotech Index fell 3 percent in September.

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