Clinical Diagnostics and Tools: Big Winners Are In Genomics and Personalized Medicine
- Slower growth in routine clinical diagnostics, tools are favored.
- Hologic has a unique business model for women’s health and diagnostics.
- Gene sequencing is important for future clinical applications and biopharma R&D.
We haven’t updated our Clinical Diagnostics and Tools Portfolio since the severe market correction in 2015/2016. We did keep three stocks on our focus list: Foundation Medicine (FMI), Hologic (HOLX) and Illumina (ILMN). All are up considerably both YTD and since 12/31/16. But only Hologic is an FDA cleared clinical diagnostic product Company.
- Foundation Medicine (FMI) is up 261% YTD at $64 today.
- Hologic, Inc (HOLX) is up 8.4% YTD at $3.49 today.
- Illumina, Inc. (ILMN) is up 67% YTD at $214.74 today.
What happened with our Rayno Dx and Tools Portfolio if you held these stocks from December 2016? What can be learned from this sector?
- The biggest winners were in personalized medicine and NexGen sequencing (NGS): FMI ILMN.
- M&A-two companies were acquired with good returns:Alere and Cepheid.
- Top line growth is critical to stock performance: NEOG at 14% annualized.
- The Clinical Diagnostic Market is in a slow growth mode and dependent on M&A. However molecular and companion diagnostics are growing.
- Flat stocks over two years because of slower growth: ABAX LMNX
- Still looking for new business models and product: GNMK NSTG VIVO
- Large cap players with biopharma R&D tools are winners: TMO
Note: Quidel (QDEL) was involved in a merger with Alere “spin-off” assets.
Old Model from 2016 With Updated Performance
| 12/20/16 | Current | $Price | 5 Yr | %Perf | 12/19/17 | % YTD | |
| Dx and Tools | Symbol | Trend | 12/16 | High | YTD 2016 | P $ | 12/19 |
| Abaxis | ABAX | Up | 51.86 | 65.61 | -6.86 | 49.04 | -7 |
| Accelerate Dx | AXDX | Up | 22.8 | 30 | 6.1 | 27.75 | 33.7 |
| Alere | ALR | ABT acq | 39.43 | 53.84 | 0.87 | 51 | 30.8 |
| Cepheid | CPHD | Acquired | 52.95 | 63 | 44.95 | n/a | |
| Foundation Med | FMI | Down | 20.35 | 49.57 | -3.37 | 64 | 261 |
| Genmark Dx | GNMK | Up | 11.99 | 15.2 | 54.51 | 4.41 | -63.9 |
| Genomic Health | GHDX | Up | 30.55 | 37 | -13.21 | 36.21 | 23.2 |
| Hologic | HOLX | Up | 40.88 | 42.45 | 3.59 | 43.49 | 8.4 |
| Illumina | ILMN | Down | 129.65 | 239.8 | -32.45 | 214.74 | 67.7 |
| Luminex | LMNX | Flat | 20.51 | 24.9 | -4.11 | 20.59 | 1.78 |
| Meridian | VIVO | Down | 17.5 | 27.24 | -14.72 | 14.25 | -19.5 |
| Neogen | NEOG | Up | 63.49 | 67.88 | 12.3 | 79.93 | 21.1 |
| Nanostring | NSTG | Up | 21.89 | 23.27 | 48.81 | 7.65 | -66 |
| Qiagen | QGEN | Up | 27.62 | 28.42 | 0 | 32.54 | 11.8 |
| Quidel | QDEL | Flat | 20.65 | 31.44 | -2.59 | 42.81 | 99.8 |
| PacBio | PACB | Down | 4.05 | 13.13 | -69.1 | 2.84 | -25.2 |
| ThermoFisher | TMO | Flat | 141.25 | 159 | 0.42 | 193.89 | 37.4 |
| iShares Russell | IWM | Up | 136.8 | 138.31 | 21.47 | 153 | 13.5 |
We will update the chart with financial metrics and after the J.P.Morgan Healthcare Conference and come up with an industry update and new models.
Disclosure long HOLX PACB