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Sequenom Shares Down in July; Hologic, NanoString Lead the Gainers

NEW YORK (GenomeWeb News) – Shares of Sequenom dropped more than 28 percent in the July, making it the biggest mover among firms in the GenomeWeb Daily News Index during the month.

Overall, the index, comprising 30 companies in the omics tools and molecular diagnostics space, was up about 5 percent in July compared to June. It beat the Dow Jones Industrial Average, which was up 4 percent for the month, but trailed the Nasdaq, which was up 7 percent, and the Nasdaq Biotech Index which gained 14 percent.

While there were some notable gainers in July, the most noteworthy mover was Sequenom, whose month-over-month dip occurred almost entirely in the last week of the month after it announced its second-quarter earnings results.

While revenues were up 91 percent year over year for the period, the company fell short of the average analyst estimates on the top and bottom lines. Additionally, it said that it was experiencing problems getting reimbursed for some tests performed due to changes in the billing and payment codes for molecular diagnostics. The company added that it was curtailing some services that weren't being reimbursed.

In whole, the news sent investors on a selling frenzy, and in one day Sequenom's stock dropped 29 percent and has continued to retreat since. Additionally, investment analyst Brian Weinstein of William Blair downgraded the company's stock and lowered his full-year 2013 revenue estimates for Sequenom following its earnings results.

The other big dropper in July was Affymetrix, whose share price fell 14 percent, reversing a 19 percent jump in June. A better than expected second-quarter earnings results reported after the close of the market on Wednesday has lifted its stock about 12 percent in afternoon trading today, however.

GenMark Diagnostics (-8 percent), meanwhile, has yet to recover from the announcement in June that Luminex and Natural Molecular Testing had entered into a multiyear collaboration and licensing deal. Its shares were down almost 31 percent in June when the announcement appeared to suggest that NMT was replacing GenMark's instruments with Luminex platforms. NMT-related revenues make up about 62 percent of GenMark's total revenues, and the loss of NMT would be a major hit on its business.

NMT has since said that the Luminex deal is independent of its alliance with GenMark and that it will continue to use GenMark's instruments. However, the full impact of the NMT-Luminex deal on GenMark remains unclear, and while GenMark said immediately after the agreement was announced that it would conduct its due diligence and issue a statement on its findings within a few days of the announced deal, no such clarification from GenMark has come forth.

Hologic (+18 percent) led the gainers in July as investors welcomed the return of Jack Cumming as CEO. He also will be president of the company and replaces Rob Cascella in those posts. Additionally, the US Food and Drug Administration approved the firm's Aptima HPV assay for the Panther system.

Also, shares of NanoString Technologies, a new addition to the GWDN Index after going public in June, bounced 14 percent. It still is short of the $10 share price on its IPO, though.

Leerink Swann, one of the underwriters on the firm's IPO, started coverage of the company with an Outperform rating, while a published study suggested that NanoString's Prosigna Breast Cancer Prognostic Gene Signature Assay outperformed Genomic Health's Oncotype DX test in assessing the risk of recurrence for women with ER-positive, early stage breast cancer, as Pharmacogenomics Reporter reported.

Genomic Health was up 12 percent for the month for reasons that are unclear.

Myriad Genetics' shares were up 10 percent after falling 16 percent in June, following a decision by the US Supreme Court to invalidate certain patent claims by the company related to the BRCA1 and BRCA2 genes.

Despite the SCOTUS ruling, Myriad indicated that it would continue to protect its IP around the BRCA 1/2 genes as it and other assignees of the BRCA 1/2 gene patents sued Ambry Genetics and Gene by Gene.

In all, 25 companies in the index saw their stock move up in July, while the stocks of five firms dropped.