The G2 Diagnostic Stock Index gained about 14 percent for the second half of the year (July 26 to Dec. 27) and was up nearly 50 percent for the full year 2013 (Jan. 2 to Dec. 27). Thirteen stocks gained for the period, while two stocks lost ground. The G2 Diagnostic Stock Index outperformed the broader stock markets for the year even though the Nasdaq and Standard & Poor’s (S&P) both gained widely over the period. The Nasdaq was up 34 percent during 2013, while the S&P increased 26 percent. The G2 Diagnostic Stock Index’s outperformance of the S&P was carried by half of the stocks, with eight companies individually outperforming the S&P. Five stocks had gains for the year but did not perform as well as the S&P. Three of the diagnostic stocks with the largest gains had gains nearing or in excess of 100 percent. Microarray maker Affymetrix (Santa Clara, Calif.) gained 164 percent in 2013, followed by Illumina (San Diego) at 99 percent and Alere (Waltham, Mass.) at 89 percent. Affymetrix’s gains were in part driven by positive results from the company’s corporate restructuring program. Additionally, this fall the company released the Minimal Signature E. coli Array, a foodborne pathogen monitoring tool developed in conjunction with the U.S. Food and Drug Administration’s (FDA’s) Center for Food Safety, as well as the OncoScan FFPE assay kit, which enables whole-genome copy number analysis in highly degraded fixed-paraffin embedded solid tumor samples. Illumina maintained its dominance in the sequencing market in 2013 and remains a much-talked-about potential takeover target. The company this fall became the first to receive FDA approval for its MiSeqDx system high-throughput sequencing analyzer. Despite the slower than hoped adoption of clinical sequencing, Illumina has begun to establish itself in testing markets through acquisitions as well as through development of its own assays including its cystic fibrosis assay. The biggest loser for the year was Sequenom, whose stock lost 53 percent of its value over the year. The company’s stock slid dramatically in the fall on news that a U.S. District Court overturned Sequenom’s patent covering its MaterniT21 PLUS noninvasive prenatal test, although appeals are pending. Despite large growth in testing numbers and revenue that beat analysts’ expectations in the third quarter, the company, like many molecular companies, is still struggling to capture reimbursement under the new molecular pathology diagnostic codes. Despite beating analysts’ quarterly estimates for the past two quarters, the stock of OraSure (Bethleham, Pa.) has slid. The stock was hurt by the FDA’s stern warning requiring OraSure customer 23and Me to stop marketing  its direct-to-consumer personal genetic test, despite the fact that sales of the oral collection kit to 23andMe represent less than 5 percent of OraSure’s revenue. A bounce back is expected in 2014 as OraSure plans on launching its Intercept substance abuse detection device to domestic criminal justice and forensics markets, which holds tremendous revenue potential.

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