NEW YORK – The 360Dx Top 30's momentum stalled in December, dropping 2 percent after two months of increases.
The Top 30 mirrored the broader market as the Dow Jones Industrial Average fell 4 percent month over month, while the Nasdaq declined 9 percent. The Nasdaq Biotech Index also fell 3 percent.
The Top 30's highest gainers were Exact Sciences (+10 percent), Genetron (+10 percent), and Meridian Bioscience (+4 percent). The decliners were led by Guardant Health (-48 percent), Invitae (-37 percent), and Dermtech (-31 percent).
Exact Sciences likely saw a boost in its stock price due to new data presented at the 2022 San Antonio Breast Cancer Symposium last month. The firm's Profile for the Omission of Local Adjuvant Radiotherapy 16-gene expression signature was found via a meta-analysis of three clinical trials to be both prognostic and predictive of which patients benefited meaningfully from radiotherapy.
The firm's larger share price boost came as the result of news not from the company but from its competitor, Guardant Health. In light of disappointing data from Guardant's ECLIPSE trial, which tanked Guardant's stock by more than 30 percent when it was announced in mid-December, Exact Sciences' share price rose 23 percent.
In a note to investors, Jefferies analyst Brandon Couillard said that Guardant's data showing inferior performance to Exact's Cologuard test "diminishes the threat of a competitive blood-based alternative to Cologuard." Although the data is "good enough to meet minimum performance hurdles set in 2021 for Medicare reimbursement, we doubt it's enough to establish the test as a first-line option ahead of [Cologuard] for colonoscopy-resistant patients," he added. The ECLIPSE data "removes a major overhang" on Exact's shares.
According to a note from Cowen analyst Dan Brennan, the results are a "clear positive" for Exact Sciences. The firm's stool-based test "could be materially affected by a more convenient blood-based approach if performance was close to comparable," but Guardant's test's performance data was well below Cologuard's, he said.
Genetron Health had no significant news during the month but has a low baseline share price that makes it susceptible to fluctuations in the broader markets.
The key news for Meridian Bioscience last month was the announcement that its acquisition by SD Biosensor and SJL Partners will close Jan. 31, instead of the originally announced completion date of Jan. 6. The extension is to allow the acquirers to finalize their financing, Meridian said in a statement.
Last month's decliners were led by Guardant Health, which saw a significant decrease in share price as a result of its ECLIPSE trial data readout. The study, which included more than 20,000 patients, was intended to assess the sensitivity and specificity of the firm's Guardant Shield blood-based assay for colorectal cancer screening. The test demonstrated 83 percent sensitivity and 90 percent specificity in identifying patients who would be diagnosed with colorectal cancer. It also showed 13 percent sensitivity in patients with advanced adenomas.
Guardant said the results are positive enough that it will still submit the test to the US Food and Drug Administration for regulatory clearance and emphasized that the performance exceeded the criteria set by Medicare in its national coverage determination. Previous retrospective data showed the test's sensitivity reaching as high as 91 percent.
Despite the stock drop-off, JP Morgan analyst Julia Qin wrote in a note to investors that the test's "commercial potential as a first-in-class blood-based screening test and its ability to unleash a vast [total addressable market] of unscreened population remains intact." The "binary focus" on the data readout "has exacerbated the initial stock reaction," she noted.
Kyle Mikson, a Canaccord Genuity analyst, wrote in a note that he doesn't "believe the study was a failure" and remains "constructive on the long-term adoption for the Shield test in [colorectal cancer]." Investor negative reaction to the study results were "a touch aggressive" and "any weakness in [Guardant's] shares is mostly overdone," he added.
Meantime, Invitae's largest news last month was the announcement that it would sell its portfolio of Archer next-generation sequencing research-use tests to Danaher subsidiary Integrated DNA Technologies for $48 million. Under the deal, Invitae has licensed its anchored multiplex PCR technology to IDT and entered into a supply agreement to support Invitae's Personalized Cancer Monitoring services. The divestiture comes as Invitae is restructuring its business and transitioning its leadership, as announced in July.
Dermtech, like Genetron, did not have significant news last month but also has a low share price that fluctuates easily.
Note: The 360Dx Top 30 will be updated with new entries next month. We reconfigure the list at the beginning of each year based on market cap. As a reminder, we only consider firms for this list that trade common stock on one of the major US stock exchanges.
|360Dx Top 30|
|Burning Rock Biotech||BNR||2.25||2.51||-10.36|
|Thermo Fisher Scientific***||TMO||550.69||560.22||-1.70|
|360Dx Top 30 Average||90.23||92.02||-1.95|
*Becton Dickinson paid a dividend of $.91 per share on Dec. 8.
**Danaher paid a dividend of $.25 per share on Dec. 29.
***Thermo Fisher Scientific paid a dividend of $.30 per share on Dec. 14.