This article has been updated to note that the stop-work order on Personalis' new contract with the VA Million Veteran Program has been lifted.
NEW YORK – Fans of '80s comedies might remember the movie "Brewster's Millions" in which Richard Pryor finds himself in line to inherit a $300 million fortune, but only if he can first figure out a way to spend $30 million in 30 days.
Too bad he couldn't have just invested the money in last year's omics tools and molecular diagnostics market — he would have gone broke in no time.
Overall, the GenomeWeb Top 40 was down 34 percent year over year in 2022. That compares to a 9 percent year-over-year decline for the Dow Jones Industrial Average, a 33 percent decline for the Nasdaq, and an 11 percent decline for the Nasdaq Biotech Index. Of the 40 companies tracked by GenomeWeb, just two saw their share prices go up in 2022, while 38 saw declines. More than half the companies in the Top 40 lost more than 50 percent of their value, while 13 companies lost three-quarters of their value or more.
The year's top performer was Meridian Bioscience, whose share price was up 63 percent amidst an otherwise dreary landscape. That jump was in part driven by the pending acquisition of Meridian by a newly formed affiliate of Korean diagnostic company SD Biosensor and investment firm SJL Partners. The affiliate first made an offer for Meridian on March 18, and the parties agreed to a $1.53 billion acquisition deal on July 7. Under the terms of the deal, Meridian shareholders are set to receive $34 per share, a premium of roughly 32 percent over the closing stock price at the time of the initial offer and roughly 16 percent above the average trading price of the stock in June.
The deal was initially scheduled to close in Q4 2022, but SD Biosensor has since pushed back the close date to Jan. 31.
Meridian's fiscal year 2022 revenues were up 5 percent year over year, with net earnings of $71.4 million, or $1.62 per share. On an adjusted basis, the firm reported 2022 EPS of $1.38.
At the beginning of 2022, the company received a $2.5 million grant from the National Institutes of Health's Rapid Acceleration of Diagnostics initiative to develop its Revogene respiratory diagnostic panel, which simultaneously detects SARS-CoV-2, respiratory syncytial virus, and influenza A/B.
Meridian last year also acquired select assets from Estel Biosciences, including intellectual property for the design and manufacture of recombinant proteins using an insect cell expression system.
Additionally, the company is working to resolve a Department of Justice investigation into its Magellan LeadCare business.
Becton Dickinson was the only other member of the GW Top 40 to see a rise in stock price in 2022, with shares up 4 percent year over year.
The company's fiscal 2022 revenues were down roughly 1 percent year over year as a 9 percent rise in its base business was offset by a 74 percent drop in COVID-19 testing revenues. Upon release of the fiscal full year results, BD noted that its life sciences base business growth had been driven by an increased BD Max installed base, availability of specimen management products, and incremental clinical microbiology instrument installations.
Growth in its biosciences business was driven by solid demand for its flow cytometry products as well as higher instrument manufacturing output.
Looking to the loss column, declines were deep and widespread, with some familiar faces topping the list of the downwardly mobile. The three biggest losers of 2021 retained that title in 2022, as Invitae (-88 percent), Personalis (-86 percent), and Berkeley Lights (-85 percent) all posted large drops in price. Joining them in the bottom five were Sophia Genetics (-85 percent) and Cue Health (-85 percent).
Invitae began the year with what William Blair analyst Brian Weinstein described in a note to investors as a "sloppy start," noting that the company's Q1 2022 revenues fell short of the consensus Wall Street estimate as it struggled with the effects of the Omicron COVID-19 wave. During a conference call following release of its Q1 results, Invitae Cofounder and CEO Sean George said the company was committing to reducing operating expenses and extending its cash runway, a plan it put into action in July as it announced that it was laying off more than 1,000 employees, consolidating land and office space, and cutting back its global presences to under 12 international geographies. Invitae also announced changes to its board and executive team, making Kenneth Knight, formerly chief operating officer, the new CEO and a member of the board of directors.
In Q3, Invitae's revenues were up 17 percent year over year and the company revised its full-year 2022 cash burn to between $585 million and $625 million from its previous guidance of $600 million to $650 million, but investors remained skeptical and its share price declined steadily throughout the last month and half of the year. In a note to investors following the Q3 results, SVB Securities analyst Puneet Souda said that despite the restructuring efforts, the company's "core growth thesis [is] at risk," and it could see "additional market share loss." He also cited Invitae's $350 million convertible note that is coming due in 2024 and said the bank believed the company would need refinancing or new financing to cover it.
Personalis posted year-over-year revenue declines for each of the first three quarters of 2022, with drops of 27 percent in Q1, 16 percent in Q2, and 33 percent in Q3. These declines were driven by a pause in Personalis' contract with the US Department of Veterans Affairs for which it has provided population sequencing services since 2013. In a filing with the US Securities and Exchange Commission, Personalis said that an annual task order to provide whole-genome sequencing services to the VA's Million Veteran Program had been renewed in September, but that it was later notified that the contract was under protest by a competitive bidder, requiring a work stoppage until the protest is resolved. In a subsequent SEC filing in November, Personalis said that the bidder protest had been resolved and the stop-work order lifted.
Berkeley Lights, meanwhile, started 2022 on a promising note, posting a 9 percent year-over-year rise in its Q1 2022 revenues. Its Q2 2022 revenues were down 1 percent, though, and the company laid off 12 percent of its workforce and embarked on a restructuring plan focused on lowering its cash burn and exploring strategic partnerships, mergers, and acquisitions. Berkeley Light's Q3 2022 revenues were down 12 percent year over year as the company missed Wall Street estimates on the top and bottom lines and announced it was ending its synthetic biology partnership with Ginkgo Bioworks.
In a note to investors recapping the company's November Analyst Day, JP Morgan analyst Julia Qin noted that the company's "new commercialization roadmap" with its focus on a high recurring revenue mix and partnership and service revenue could yield fruit long term, though she said that "near-term visibility remains limited," and maintained the bank's Neutral guidance.
At the end of December, Berkeley Lights said it plans to acquire single-cell proteomics firm IsoPlexis in an all-stock deal valued at $57.8 million and rename the combined company PhenomeX.
In a note to investors, Cowen analyst Steven Mah said the deal could help Berkeley Lights penetrate the academic market, where the high prices of its instruments have been a barrier, and added that IsoPlexis' consumables-driven business model fits with Berkeley Lights' ongoing shift toward increasing recurring revenues.
The GenomeWeb Top 40 will be updated with new entries next month. We reconfigure the list at the beginning of each year based on market cap. As a reminder, we only consider firms for this list that trade common stock on one of the major US stock exchanges.
|GenomeWeb Top 40|
|Burning Rock Biotech||BNR||2.25||9.53||-76.39|
|Thermo Fisher Scientific||TMO||550.69||667.24||-17.47|
|GenomeWeb Top 40 Average||76.86||116.91||-34.26|