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Myriad Genetics, Vermillion Shares Up Sharply in February

NEW YORK (GenomeWeb News) – For the second month in a row, shares of Myriad Genetics rose sharply, pacing gainers in the GenomeWeb Daily News Index.

The GWDN Index climbed 5 percent in February, outpacing the Down Jones Industrial Average (+ 4 percent) and matching the Nasdaq (+ 5 percent) for the month. However, it trailed the Nasdaq Biotech Index, which gained 8 percent month over month.

Along with Myriad, other companies that saw their stocks rise significantly last month included Vermillion (+ 27 percent) and Foundation Medicine (+19 percent). Affymetrix saw the biggest month-over-month drop in its share price (-18 percent), followed by Genomic Health (-12 percent).

After seeing its stock tumble 23 percent year over year in 2013, Myriad's shares have rebounded through the first two months of 2014, and February's 31 percent jump follows a 32 percent increase in its share price in January compared to December.

The Salt Lake City-based molecular diagnostics company started February by announcing plans to buy of autoimmune diagnostics company Crescendo Bioscience for $270 million in cash minus a $25 million repayment of a loan, and ended the month by completing the deal. The transaction also prompted investment bank Credit Suisse to upgrade Myriad's shares to a Neutral rating from a previous Underperform rating.

Additionally, during the month Myriad announced a 37 percent increase in revenues for its Fiscal Year 2014 second quarter and settled a BRCA genes-related patent lawsuit with Gene by Gene.

Reasons for Vermillion's share hike are unclear. While its stock steadily rose throughout February, trading was especially heavy during the last two days of the month when trading volume was 2.9 times the firm's average volume on Feb. 27 and 5.9 times its average volume on Feb. 28. The company is scheduled to release its fourth quarter and full-year 2013 financial results on Thursday.

Meanwhile, Foundation Medicine last week announced that its revenues in the fourth quarter jumped 87 percent year over year, while full-year 2013 revenues increased to $29 million from $10.6 million in 2012.

On a conference call, Foundation Medicine officials said that the company plans to expand the FoundationOne test for solid tumors in the first half of this year and to introduce new features to its Interactive Cancer Explorer to give users the ability to add and share clinical outcomes data, as Clinical Sequencing News reported.

The Index's gainers outnumbered the decliners 24 to five in February. The biggest decline was seen by Affymetrix, whose shares fell 15 percent the day after it announced its fourth quarter results. While revenues in the quarter increased 10 percent year over year and narrowly topped consensus Wall Street expectations, its bottom line missed analyst estimates.

Similarly, fourth quarter financial results that missed Wall Street expectations fueled a drop in Genomic Health's stock price. After the company announced revenues and a net loss that failed to meet analysts' consensus estimates, Genomic Health's stock saw a one-day decline of 9 percent.

During its earnings conference call, a company official also noted that it plans to ramp up spending during the year to drive adoption of its Oncotype DX prostate cancer test, leading Credit Suisse to downgrade Genomic Health's shares to Neutral from Outperform.

"[W]e see few catalysts that we feel could drive the stock materially higher in the near term," analyst Vamil Divan said in a research note.

Life Technologies has been dropped from the GWDN Index following the completion of its acquisition by Thermo Fisher Scientific.