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Small Cap Molecular Analysis Companies May Provide New Diagnostic Solutions

August 28th, 2013
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Article of the Week from About Small Cap Stocks

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The 10th anniversary of human genome sequencing recently passed, and with it, coverage of just how far we've come since then. Companies are getting closer and closer to cheap genome sequencing, including many small cap companies. When we last discussed molecular diagnostic small cap companies in January, we explained that the "crowded field" of genome sequencing and testing was in part due to the lowering costs of genome mapping. Today, companies in this sector are beginning to collaborate to bring clinical technologies based on genome mapping and genome sequencing to market.

Follow up:

San Diego-based Sequenom, Inc (Nasdaq: SQNM) and Irvine, CA-based CombiMatrix* Corporation (Nasdaq:CBMX) recently announced a collaboration agreement to market chromosomal microarray analysis (CMA) testing services with hopes of confirming the results of noninvasive, prenatal testing (NIPT) to both doctors and patients. By using their respective marketing channels to promote these tests and combining forces to provide training services, the companies may be able to expand the use of this type of testing and make it an industry standard for clinically-appropriate situations. SQNM closed August 9th at $3.15, up $0.17 for the day. Their market cap is $370.56 million, and their 52-week trading range is $2.86 - $5.36.

This announcement came just before CombiMatrix's announcement that prenatal microarray testing volumes was 156% higher in the second quarter of 2013 than in the second quarter of 2012. The company hopes to continue focusing efforts on gaining widespread acceptance of microarray testing. CBMX closed August 9th at $3.08, down $0.14for the day. Their market cap is $8.43 million, and their 52-week trading range is $1.40 - $14.14.

In addition, we've been watching a few other small cap molecular diagnostics companies. We last checked in with these companies on February 2, 2013:

  1. GenMark Diagnostics, Inc (Nasdaq: GNMK), based in Carlsbad, CA, is a small cap molecular diagnostics company that provides testing equipment for laboratory use for detecting and measuring DNA and RNA targets in patient treatments. Their XT-8 system provides a single user interface for a variety of molecular diagnostic tests. The disposable eSensor cartridges help minimize errors with a pre-programmed internal memory chip that provides information like expiration dates, lot numbers and test protocols. GNMK closed August 9th at $10.03, up $0.19. Their market cap is $319.50 million, and their 52-week trading range is $6.55 - $16.00.
  2. Pacific Biosciences of California (Nasdaq: PACB), based in Menlo Park, CA, is the developer of an integrated platform for genetic analysis. The single molecular, real-time (SMRT) technology helps record individual biochemical events. The company released the PacBio RS II Sequencing System in April of this year. PACB closed August 9th at $3.57, up $0.02 for the day. Their market cap is $218.96 million, and their 52-week trading range is $1.06 - $3.69.
  3. Los Angeles-based Response Genetics, Inc (Nasdaq: RGDX) develops and sells clinical diagnostic and pharmacogenomic tests under their ResponseDX banner. The company offers tests for non-small cell lung cancer, colorectal cancer, gastric cancer and melanoma. The tests help doctors assess the risk of cancer recurrence, chemotherapy efficacy and tumor classification. RGDX closed August 9th at $1.79, down $0.23. Their market cap is $66.91 million, and their 52-week trading range is $1.70 - $2.10.

Small cap companies operating in the molecular analysis space continue to use new technology in innovative ways. Whether companies are bringing their own innovations to market or collaborating on joint projects, the field appears to be strong. Health care investors interested in these innovations may wish to continue following these small cap companies.

* Denotes a client of Allen & Caron Inc.









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