360Dx Top 30 Rebounds 2 Percent in March

NEW YORK – Stock prices of many diagnostics companies rose month over month in March as the 360Dx Top 30 rose 2 percent, slightly bouncing back from a 4 percent drop in February.

The Top 30 mirrored the broader market as the Dow Jones Industrial Average climbed 2 percent month over month, while the Nasdaq increased 7 percent. The Nasdaq Biotech Index ticked up 1 percent.

The Top 30's highest gainers were Accelerate Diagnostics (+37 percent), Opko Health (+28 percent), and Myriad Genetics (+23 percent). The decliners were led by LumiraDx (-58 percent), CareDx (-46 percent), and Invitae (-37 percent).

Accelerate Diagnostics only had one piece of news last month, despite its rocketing share price: The firm reported a 9 percent year-over-year decrease in fourth quarter revenues as a result of the timing of capital equipment sales. Q4 recurring revenues, however, rose 8 percent compared to 2021, and the firm added three contracted instruments and brought five instruments live in the US. Accelerate's low starting share price makes it particularly susceptible to market fluctuations.

Opko Health announced last month that its subsidiary ModeX Therapeutics will work with Merck to continue developing ModeX's vaccine MDX-2201 for Epstein-Barr infections. Opko will receive an upfront payment of $50 million and Merck will have exclusive licensing rights to the drug if it's approved.

Myriad Genetics, meantime, announced early in the month that it has expanded a strategic partnership with Illumina. Illumina will offer distributable kits of its TruSight Oncology 500 HRD research-use-only test in the US, and Myriad will provide a centralized laboratory service. The companies also created a companion diagnostic alliance to pursue regulatory approvals for Myriad's MyChoice HRD assay and a future clinical in vitro diagnostic test based on the TSO 500 test. They said they will seek joint HRD companion diagnostic partnerships with pharmaceutical companies worldwide, excluding Japan.

Among the decliners, LumiraDx was likely impacted last month by the reporting of its Q4 and full-year 2022 financial results. The point-of-care diagnostic firm announced that its Q4 revenues declined 65 percent compared to Q4 2021 and missed analysts' average estimate. Its full-year 2022 revenues fell 40 percent and missed average estimates.

CareDx had a turbulent March, with its share price falling sharply early in the month after Medicare Administrative Contractor Palmetto GBA updated reimbursement guidance for molecular tests assessing rejection risk in solid organs. The new billing article, effective March 31, limits reimbursement to one test per patient encounter and redefines acceptable surveillance testing. The contractor said it will also no longer reimburse for-cause tests unless they are used in place of a biopsy or to confirm biopsy results.

Craig-Hallum analyst Alexander Nowak wrote in a note to investors that the change could wipe out $15 million of revenue from CareDx's HeartCare and approximately $50 million of the company's $191 million kidney testing business.

However, CareDx's stock rebounded later in the month after the American Society of Transplant Surgeons endorsed the use of donor-derived, cell-free DNA, along with peripheral blood gene expression profiling, in organ transplant care. CareDx's AlloSure Kidney and AlloSure Heart tests measure levels of dd-cfDNA to predict the rejection of kidney and heart transplants.

Fellow decliner Invitae also had a bumpy month, starting with the announcement early in March that its Q4 revenues fell about 3 percent year over year, in line with its earlier estimates. The company also announced debt refinancing measures, including a convertible notes transaction, and said it will sell $30 million of new notes to investors for cash.

Andrew Brackmann, an analyst with William Blair, wrote in a note to investors that the financing updates give Invitae "some breathing room and should allow the near-term focus to be on core execution," although there are still "lingering questions around ultimate growth profile, still-heightened cash burn, and longer-term balance sheet considerations."

Later in the month, Invitae announced that its Personalized Cancer Monitoring assay to detect minimal residual disease in cancer patients would be covered by Blue Shield of California. Also in March, Invitae inked a deal with Epic to provide access to its genetic test results directly through Epic's Aura specialty diagnostics suite.

*Becton Dickinson paid a dividend of $.91 per share on March 9.

**Danaher paid a dividend of $.27 per share on March 30. 

***Thermo Fisher Scientific paid a dividend of $.35 per share on March 14.