NEW YORK – After two months of decline, including a 6 percent drop in May, diagnostics companies have seen an upswing in their share prices as the 360Dx Top 30 rose 4 percent in June.
The Top 30 aligned with the broader market as the Dow Jones Industrial Average rose nearly 5 percent month over month and the Nasdaq rose nearly 7 percent. The Nasdaq Biotech Index was essentially flat.
The Top 30's highest gainers were Opko Health (+56 percent), Guardant Health (+22 percent), and LumiraDx (+17 percent). The decliners were led by Cue Health (-51 percent), Castle Biosciences (-44 percent), and Burning Rock Biotech (-18 percent).
Opko Health's stock price benefited from the announcement last month that its treatment for pediatric growth hormone deficiency, developed in partnership with Pfizer, was approved by the US Food and Drug Administration.
Guardant Health did not have significant news in June to explain its stock price increase, although the firm did announce that it is partnering with the European Confederation of Pharmaceutical Entrepreneurs to form the European Coalition for Access to Comprehensive Genomic Profiling, along with Exact Sciences, Illumina, Merck Sharp & Dohme, and Novartis.
LumiraDx's key news last month was the announcement that its LumiraDx SARS-CoV-2 Ag Ultra and LumiraDx SARS-CoV2 Ag & RSV tests received validation for use by the UK's Medicines and Healthcare products Regulatory Agency under the Coronavirus Test Device Approvals process.
Among the decliners, Cue Health also had only one key piece of news in June. The firm announced that its at-home molecular test for COVID-19, the Cue COVID-19 Molecular Test, received de novo marketing authorization from the FDA. It is the first at-home, over-the-counter test for COVID-19 to be granted marketing authorization via a traditional premarket review pathway, as well as the first at-home test authorized using that pathway for any respiratory illness, according to the FDA.
Both Cue Health and LumiraDx have low starting share prices that make them particularly susceptible to small fluctuations in the market.
Castle Biosciences was affected in June by a slew of non-coverage decisions from multiple Medicare Administrative Contractors. Early in the month, Wisconsin Physicians Service Insurance Corporation released a proposed local coverage determination that would not cover the firm's DecisionDx-SCC test for risk stratification of patients with cutaneous squamous cell carcinoma.
In a note to investors, BTIG analyst Mark Massaro wrote that weakness in the share price after the WPS decision was overdone because Castle Bio doesn't operate a laboratory in its jurisdiction, the draft policy could be amended or reversed, and the firm had existing coverage for the DecisionDx-SCC test through Medicare contractor Novitas Solutions.
But less than a week later, Novitas released an LCD that rescinded coverage for multiple cancer genetic tests, including Castle Bio's DecisionDx-Melanoma and DecisionDx-SCC tests. Novitas found that the body of peer-reviewed literature for the tests was insufficient to establish the analytic validity, clinical validity, and clinical utility of the assays in the Medicare population.
In another note, Massaro wrote that the decision caught both him and Castle Bio's management team by surprise and said that management was "pursuing all avenues to reverse this decision." Massaro noted that DecisionDx-Melanoma is covered and reimbursed by another contractor.
At the end of June, three other Medicare contractors — Palmetto GBA, Noridian Healthcare Solutions, and CGS Administrators — also released draft decisions denying coverage for DecisionDx-SCC.
Meantime, Burning Rock Biotech's only news in June was the announcement that Shaokun Chuai resigned from the board of directors and as CSO. Chuai will continue to serve as a senior adviser to the company.
|360Dx Top 30|
|Burning Rock Biotech||BNR||2.15||2.61||-17.62|
|Thermo Fisher Scientific***||TMO||521.75||508.46||2.61|
|360Dx Top 30 Average||86.36||82.97||4.08|
*Becton Dickinson paid a dividend of $.91 per share on June 8.
**Danaher paid a dividend of $.27 per share on June 29.
***Thermo Fisher Scientific paid a dividend of $.35 per share on June 14.