What is it about Irvine and SoCal that is drawing molecular diagnostics companies? A case could be made that the area is vying to become the center of the smallcap diagnostics universe, based on several recent moves and relocations and a new IPO.
CombiMatrix Corp. (Nasdaq: CBMX, http://www.combimatrix.com), a diversified biotech company that operates mainly in molecular diagnostics and genetic analysis, this spring announced a complete restucturing plan and moved south to Irvine from its longtime Washington headquarters. They also named a new chief executive, former US Labs (based in Irvine) CEO Judd Jessup, effective Aug. 23. He’s arriving at a good time for their diagnostics business, based on the recently announced second quarter 2010 results showing diagnostic lab revenue up 51 percent year-over-year. That helps, but there’s plenty of work to do considering shares of the company have plummeted since hitting their 52-week high of $7.80 last January. Shares traded at about $3.11 on Aug. 17.
Then there’s Agendia BV (http://www.agendia.com), which is based in Amsterdam and privately held but recently moved its U.S. base to Irvine. Agendia, with its MammoPrint breast cancer diagnostic test (cleared by the FDA in February) is a spot-on competitor for another OC smallcap cancer diagnostics company and advanced cancer lab, Aliso Viejo-based Clarient * (Nasdaq: CLRT, http://www.clarientinc.com). Clarient, which recently announced second quarter results showing revenue growth of 21 percent year-over-year and nearly 8 percent sequentially, has developed Mammostrat, which was recently granted US and European patents. Both tests are designed to predict the recurrence of breast cancer following treatment.
Just south of The OC county line is Carlsbad, CA-based GenMark Diagnostics, Inc. (Nasdaq: GNMK, http://www.genmarkdx.com), which makes molecular diagnostic equipment and develops genetic tests. The company just went public at $6 a share in May and on Aug. 17 was trading at about $4.35 a share.
GenMark’s neighbor in Carlsbad is Genoptix (Nasdaq: GXDX, http://www.genoptix.com), a diagnostic services lab that was on a roll until last May when its first quarter earnings disappoined shareholders and the stock price dove from $39 a share all the way down to the $16 range. It’s slowly working its way back and recently told investors patient cases in the second quarter of 2010 rose 11 percent year-over-year. The stock was trading at about $17.20 on Aug. 17.
A bit further south along the SoCal coast you’ll find San Diego-based Sequenom Inc. (Nasdaq: SGNM, http://www.sequenom.com), a developer and manufacturer of diagnostic tests and genetic analysis systems. Sequenom announced a mixed bag of second quarter results metrics, considering revenues beat estimates and were up 24 percent year-over-year but its net loss was a surprise 86 cents per share, much deeper than analysts expected.
* Indicates an Allen & Caron client.