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Accelerate, Invitae Lead Gainers as 360Dx Index Ticks Up in June

NEW YORK – After two months of significant increases for many diagnostic firms, growth was more modest in June to conclude the first half of the year.

The 2 percent month-over-month increase for the 360Dx Index comes after an 8 percent jump in May and a 22 percent leap in April. A couple of significant deals, as well as continued lift from coronavirus diagnostic tests, likely led to the increases.

The broader market has also continued to improve as the Dow Jones Industrial Average rose 2 percent compared to May and the Nasdaq increased 6 percent in June. The Nasdaq Biotech Index also ticked up 2 percent month over month.

The 360Dx Index's largest gainers in June were Accelerate Diagnostics (+82 percent), Invitae (+80 percent), and GenMark Diagnostics (+55 percent). The three biggest decliners were Myriad Genetics (-22 percent), Guardant Health (-10 percent), and Bio-Rad Laboratories (-8 percent).

Accelerate's share price ticked up sharply at the end of June despite little news from the company last month. However, the firm entered a collaboration agreement in May with BioCheck and its affiliate Sophonix to distribute SARS-CoV-2 IgG and IgM antibody tests, as well as the BioCheck MS-FAST chemiluminescence immunoassay analyzer. In an analyst note, William Blair analyst Brian Weinstein said that Accelerate reported "selling everything they can make" and ramping up production to meet additional demand for COVID-19 tests.

Invitae's sharp share price increase is due to its $1.4 billion merger with ArcherDx announced at the end of June. Invitae acquired ArcherDx to expand its footprint in the cancer genetics and precision oncology space, it said, and purchased the firm with 30 million shares of common stock and $325 million in cash. With the acquisition, Invitae will be able to add tumor profiling and liquid biopsy technologies for predicting and monitoring therapeutic response, the firm said. After meeting with Invitae's management team, SVB Leerink analyst Puneet Souda said that the company's germline testing business is on the rebound after it took a serious hit during the early days of the COVID-19 pandemic.

GenMark's jump comes after a decline in May, and the major news from the company this month is North Carolina-based health system Vidant Health's announcement that GenMark will be its primary provider of rapid testing for SARS-CoV-2 and other infections. The health system is deploying GenMark's ePlex system to test for SARS-CoV-2, respiratory pathogens, and bloodstream infections. GenMark also this month applied for Emergency Use Authorization from the US Food and Drug Administration for its ePlex Respiratory Pathogen 2 Panel and launched the panel for commercial distribution and clinical use in the US.

Myriad Genetics' share price decline is the result of a string of disappointing news for the company in June, namely the draft local coverage determination from two Medicare Administrative Contractors that declined to expand coverage of the firm's EndoPredict breast cancer gene expression test, and the continuation of a whistleblower lawsuit against the firm.

CGS Administrators and Wisconsin Physicians Service Insurance Corporation denied Myriad's request for coverage of the EndoPredict test to assess the benefit of extended endocrine therapy for women with breast cancer, despite Myriad's submission of additional data. The MACs said it's unclear if the test is useful for identifying patients who should receive extended endocrine therapy, although the determinations are still open for comments. 

The firm also, however, was positively impacted by Palmetto GBA's limited coverage decision pharmacogenetics tests, which has implications for the firm's GeneSight Psychotropic test, and positive coverage decisions from three commercial insurers for its Prolaris prostate cancer aggressiveness test.  

In addition, a US federal court in California denied Myriad's request to dismiss a whistleblower lawsuit alleging the company engaged in misconduct and fraud. The lawsuit alleges Myriad and its subsidiary Crescendo Bioscience attempted to improperly induce the ordering of the Vectra test for rheumatoid arthritis. 

The reason for Guardant's decline is unclear, as at the beginning of June the firm closed an underwritten public offering of 13,225,000 shares of its common stock at a price of $84 per share, making approximately $362.3 million. CGS Administrators also released a limited coverage policy for the Guardant360 liquid biopsy test, covering the test for patients with recurrent, relapsed, refractory, metastatic, or advanced solid tumors that didn't originate from the central nervous system. The CGS decision aligns coverage with Palmetto's final coverage determination from last year.

The only news from Bio-Rad in June was the announcements that multiple SARS-CoV-2 tests running on Bio-Rad instruments received EUA from the FDA, including Phosphorus Diagnostics' RT-qPCR test, RTA Laboratories' Diagnovital SARS-CoV-2 PCR kit, and Gencurix's GenePro SARS-COV-2 test.