Last month, pioneering Spokane-based and PerkinElmer-owned tech company Signature Genomic Laboratories, which provides scientific, DNA-based tests to identify genetic disorders in embryos or babies, announced they would be closing their doors sometime this summer. PerkinElmer stated that this shutdown is the result of “changing market conditions, including a highly unfavorable reimbursement environment, combined with a significant decline in demand for invasive procedures due to the uptake of non-invasive prenatal testing.”
According to spokesman.com, the invasive nature of Signature Genomic Laboratories’ testing is not the only way– “Newer tests developed by a variety of other companies now use blood draws for DNA testing. While noninvasive, those blood based tests are limited to identifying far fewer conditions than the more than 100 that microarray tests cover.”
Genetic diagnostic lab testing still remains an important aspect of genome research, and shutdowns like Signature’s could be seen as a setback in the field or just a sign of scientific progress as scientists continue to fine-tune and remodel their methods to which are the least harmful while still producing the best results. With that in mind, let’s check in on some of the small cap stocks companies we’ve been following in the sector of technology investing of scientific sequencing and genetic diagnostics:
San Diego-based Sequenom, Inc (Nasdaq:SQNM), is a company that specializes in noninvasive molecular diagnostic testing and genetic analysis. In their May release of their first quarter financials, SQNM reported record revenue of $46.3 million, up by 20% compared to their $38.5 million revenue results in the first quarter of 2013. Total laboratory test volume was up to around 50,000, including 39,800 tests of their patented MaterniT21™ PLUS, a noninvasive prenatal test (NIPT) for the chromosomal anomaly Trisomy 21, the most common cause of Down syndrome. When we last checked in on them, SQNM closed March 3 at $2.34, with a market cap of $270.78 million. SQNM closed June 2nd at $$3.11, down $0.07 for the day. Its market cap is $341.03 million, and its 52 week trading range is $1.65 – $4.90.
Irvine, CA-based CombiMatrix Corporation * (Nasdaq:CBMX) is another molecular diagnostics laboratory, using DNA-based testing for developmental disorders and cancer. This month, CBMX announced that Long Island Pathology (LI Path) would begin offering its patients CombiMatrix’s chromosomal microarray analysis (CMA) for miscarriage analysis testing. According to Managing Partner of LI Path, Hal Rose,
“Patients are becoming much more advanced in their knowledge and awareness of how genetic testing can provide them important information about their pregnancies, and we are very excited to be able to offer CMA testing to help them understand the potential genetic cause of a failed pregnancy and factors for their continued efforts.”
In their 2014 first quarter results, CBMX announced their total quarterly revenues of $1.82 million, up 13 percent from the first quarter of 2013. CBMX closed March 3 at $2.82, with a market cap of $13.36. CBMX closed June 2nd at $2.17, down $0.07 for the day. Its market cap is $23.79 million, and its 52 week trading range is $2.01 – $4.60.
GenMark Diagnostics, Inc (Nasdaq:GNMK), based in Carlsbad, CA, is a company focused on developing and commercializing its eSensor detection technology, which can identify distinct biomarkers. In their first quarter revenue report of 2014, GNMK reported revenues of $7.9 million, down 29% from the $11.1 million revenues of the first quarter of 2013. However, President & CEO Hany Massarany stated, of the losses,
“Our base business continued to demonstrate strong revenue growth on both a year-over-year and sequential basis, growing by 84% compared with the first quarter of 2013, and approximately 23% over last quarter. Additionally, we are very pleased with the progress we made with our NexGen sample-to-answer system and we remain on track to complete its development this summer.”
GNMK closed March 3 at $12.18 with a market cap of $511.07. It closed June 2nd at $10.63, down $0.38 for the day. Its market cap is $439.40 million, and its 52 week trading range is $8.48 – $15.49.
Pacific Biosciences of California (Nasdaq:PACB), based in Menlo Park, CA, is a biotechnology company that develops, manufactures, and markets an integrated platform for genetic analysis. They announced this month that their Single Molecule, Real-Time (SMRT®) DNA Sequencing technology will be featured in multiple arenas at the 2014 American Society for Microbiology (ASM) annual meeting in Boston. PACB closed March 3 at $6.75 with a market cap of $453.98 million. PACB closed June 2nd at $4.73, down $0.16 for the day. Its market cap is $348.25 million, and its 52 week trading range is $2.38 – $8.20.
Los Angeles-based Response Genetics, Inc (Nasdaq:RGDX) is a clinical laboratory that develops and sells molecular diagnostic testing services for larger cell lung cancer, colorectal cancer, gastric cancer and melanoma, helping doctors determine chemotherapy efficacy, cancer recurrence and tumor classification. On May 14th, RGDX announced a new commercial agreement with DxM Diagnostico Molecular (“DIFRA”), a cancer testing distributor in Mexico, providing them with their ResponseDX testing services for DIFRA’s patients. RGDX closed March 3 at $1.43 with a market cap is $49.66 million. They closed June 2nd at $0.97, down one cent for the day. Its market cap is $34.86 million, and its 52 week trading range is $0.76 – $2.93.
With many of these companies reporting increases in revenue and new partnerships with other companies, it’s clear that if you’re looking for a new technology investment or healthcare investing, this sector is still a viable one. Molecular and genetic diagnostic labs will continue to advance medical research and treatment as medical technology continues to progress, and despite some setbacks, this type of significant medical research continues to prove by the numbers that it’s still a ‘recession-proof sector’.