NEW YORK – The 360Dx Top 30 saw a slight rebound in May, ticking up about 1 percent after its sharp drop in April.
The Top 30 was slightly better than the broader market as the Dow Jones Industrial Average was flat month over month. The Nasdaq fell 2 percent, while the Nasdaq Biotech Index dropped 1 percent.
The Top 30's gainers were Opko Health (+11 percent), Meridian Bioscience (+7 percent), and Quest Diagnostics (+5 percent). The decliners were led by Burning Rock Biotech (-56 percent), Accelerate Diagnostics (-36 percent), and Guardant Health (-34 percent).
Opko saw its share price go up despite announcing disappointing Q1 results early in May. The firm reported a 40 percent decline in revenues year over year, including a 43 percent drop in diagnostics revenues, due partly to lower COVID-19 testing volumes.
However, the financial results were offset by M&A news in May, during which the company announced its $300 million acquisition of ModeX Therapeutics, a company focused on developing immune therapies for cancer and infectious diseases such as HIV and SARS-CoV-2. Early in the month, Sema4 also announced that it closed its $623 million purchase of GeneDx from Opko. Sema4 paid $150 million in cash, along with 80 million shares of its stock, for a total upfront consideration of about $473 million. Opko may receive revenue-based milestone payments over the next two years of up to $150 million.
Meridian Bioscience, meantime, saw the impact of solid fiscal Q2 earnings last month, reporting a 30 percent year-over-year increase in revenues. The life sciences division saw a 32 percent rise in revenues, while the diagnostics division's revenues grew 29 percent.
In a note to investors, William Blair analyst Brian Weinstein said that "the company continues to take advantage of the Life Sciences revenue opportunities presented by the pandemic that should allow for an expanded role for this franchise with its customers in a post-pandemic world."
Quest Diagnostics did not have any significant news last month to explain its stock price increase, although it did release a physician survey report assessing clinician attitudes toward blood-based Alzheimer's testing. According to the report, a majority of primary care providers are interested in using blood-based tests for the detection and monitoring of the disease.
The company also launched its Lymphocyte-activation gene 3 Immunohistochemistry assay last month, which measures Lymphocyte-activation gene 3 expression to guide treatment in patients with melanoma.
Among the decliners, Burning Rock Biotech only had one key news item in May: the reporting of its Q1 results earlier this week. The firm's first quarter 2022 revenues were up 27 percent compared to 2021, driven by in-hospital revenues that jumped 69 percent and pharma research and development services revenues that quadrupled. Revenues from the firm's central laboratory business fell a fraction of 1 percent year over year. While the positive financial results don't necessarily explain the decline, Burning Rock is particularly susceptible to market trends due to its low starting share price.
Accelerate Diagnostics also reported Q1 financial results last month, announcing a 20 percent increase compared to 2021. The growth was driven by a 29 percent increase in recurring revenues, although instrument revenues decreased during the quarter. In a separate announcement the same day, Accelerate said that it filed for in vitro diagnostic registration of its Accelerate Arc Module and BC kit with the US Food and Drug Administration. The module enables automated, rapid microbial identification of positive blood cultures with MALDI mass spec systems.
Alex Nowak, an analyst with Craig-Hallum, wrote in research note that Accelerate "can seemingly not get a break from COVID long enough to reaccelerate business momentum enough to help, with Delta and now Omicron in Q1 impacting sales access and customer bandwidth for new solutions." He added that "while the operating environment for the company and its customers improved exiting the quarter, it is likely to come too late."
As for Guardant Health, early in May it reported Q1 revenue growth of 22 percent, with help from a 32 percent rise in precision oncology testing revenues and 20 percent growth in development services and other revenues. The firm also launched its Shield colorectal cancer screening assay as a laboratory-developed test — Shield is the first genomic blood-based test for colorectal cancer on the market.
SVB Leerink's Puneet Souda wrote in a note to investors after the test's launch that Guardant "appears to be launching this assay to initiate commercial conversations with physicians and introduce the assay to the field."
However, the firm's legal saga with Illumina continued last month, which may have rattled investors. In March, Illumina sued Guardant in the US District Court for the District of Delaware for correction of inventorship, trade secret misappropriation, and breach of contract. Last week, Guardant filed motions to change the venue or dismiss the lawsuit, saying in court documents that the case was not relevant to Delaware and requesting it be moved to the Northern District of California.
|360Dx Top 30|
|Burning Rock Biotech||BNR||2.40||5.51||-56.44|
|Thermo Fisher Scientific||TMO||567.57||552.92||2.65|
|360Dx Top 30 Average||106.58||105.63||0.90|
*Bio-Techne paid a dividend of $.32 per share on May 13.
**Labcorp paid a dividend of $.72 per share on May 18.