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Broader Markets Lift 360Dx Index 3 Percent in October

NEW YORK – Following a downward turn in September, the 360Dx Index saw a rebound in October as it rose 3 percent month over month.

The ascent reflected growth in the broader economic markets. The Dow Jones Industrial Average rose nearly 6 percent month over month from September, while the Nasdaq was up 7 percent. The Nasdaq Biotech Index fell 2 percent.

The 360Dx Index's largest gainers last month were Thermo Fisher Scientific (+11 percent), Abbott (+9 percent), Quotient (+8 percent), and Bio-Techne (+8 percent). The decliners were led by Burning Rock Biotech (-21 percent) and CareDx (-20 percent).

Thermo Fisher Scientific's most significant news last month was the announcement that its third quarter revenues rose 9 percent year over year, due to increases in its life sciences solutions, analytical instruments, and laboratory products and services segments. Total revenues for the quarter were $9.33 billion, beating the average Wall Street estimate of $8.39 billion.

In an analyst note, SVB Leerink's Puneet Souda wrote that the firm is "leveraging unmatched scale and reach into the labs, combined with a number of growth products serving key end markets and a growing consolidator position."

In a separate note, Souda wrote that Thermo Fisher "continues to emerge stronger from the pandemic."

The company also priced two significant notes offerings, one for €5.25 billion ($6.06 billion) and one for $5.85 billion, the proceeds from which will be used for its pending $17.4 billion acquisition of PPD, which was first announced in April.

Earlier in the month, Thermo Fisher announced an exclusive distribution agreement with microbiology laboratory automation firm Clever Culture Systems to distribute its APAS Independence automated culture screening and interpretation system in the US.

In October, the US Food and Drug Administration also revoked Thermo Fisher's Emergency Use Authorization for its TaqPath COVID-19 MS2 Combo Kit 2.0 upon the company's request. The firm said it has decided not to commercially support the test.

Abbott, meantime, also saw a share price boost from its Q3 revenue announcement — its diagnostic business revenues rose 48 percent year over year, largely due to sales in its core laboratory and rapid diagnostics segments. Overall revenues were $10.93 billion, up 24 percent compared to Q3 2020, with diagnostics revenues of $3.91 billion.

However, the firm also received less positive news from the FDA earlier in the month when the agency classified its recall of Abbott's Alinity M SARS-CoV-2 AMP Kits and Alinity M Resp-4-Plex AMP Kits as a Class I recall. The kits had the potential for false positives due to a software issue, the FDA said.

Neither Quotient nor Bio-Techne had significant news during October that would explain their stock price increases, although Quotient appointed a new chief scientific and medical officer and a new chief commercial officer early in the month.

Bio-Techne subsidiary Exosome Diagnostics published data about its ExoDx Prostate test in the journal Prostate Cancer and Prostatic Diseases finding the test can discriminate between high-grade and low-grade cancer.

Burning Rock Biotech led the decliners, although there were no clear reasons for the downturn, as the company had no news of note in October.

CareDx's decline comes after the release of its third quarter earnings results, during which it saw revenues rise 42 percent. However, in a filing with the US Securities and Exchange Commission, the company disclosed that it is under investigation about its business practices by the US Department of Justice and the US Securities and Exchange Commission.

The DOJ is conducting a False Claims Act investigation into the company's kidney testing and phlebotomy services, it said in the filing. The firm also received a subpoena from the SEC for a related investigation and a request for information from a state regulatory agency.

In an analyst note, BTIG's Mark Massaro wrote that the disclosures "typically bear some degree of merit," but said "it's too early to form any opinions on these matters." He added that he thinks "these investigations can potentially weigh on the stock, and they certainly bear watching."

Massaro also noted that shifts in payor mix are impacting CareDx's top-line growth, as a higher percentage of test volumes are coming from commercial payors, where "reimbursement is not as established."

Regarding the company's Q4 2021 guidance, which many analysts and investors found lower than expected, Massaro said management attributed it to fewer working days in the quarter due to the holidays, as well as "likely ongoing mix shift impacts" in payor reimbursement.

CareDx also filed a notice of its intent to appeal a recent decision by the United States District Court for the District of Delaware to invalidate three patents held by Stanford University and licensed exclusively to the company. The patents have been at the center of an infringement lawsuit Stanford and CareDx filed against Natera and Eurofins Viracor in 2019.

360Dx Index        
Company Ticker 29-Oct-21 30-Sep-21 Percent Change
Abbott* ABT 128.89 118.13 9.11
Accelerate Diagnostics AXDX 5.90 5.83 1.20
Adaptive Biotechnologies ADPT 33.41 33.99 -1.71
Becton Dickinson BDX 239.59 245.82 -2.53
Bio-Rad BIO 794.68 745.95 6.53
Bio-Techne TECH 523.65 484.57 8.06
Burning Rock Biotech BNR 14.09 17.88 -21.20
CareDx CDNA 51.00 63.37 -19.52
Castle Biosciences CSTL 62.35 66.50 -6.24
Danaher DHR 311.77 304.44 2.41
Exact Sciences EXAS 95.22 95.45 -0.24
Fulgent Genetics FLGT 82.92 89.95 -7.82
Genetron Holdings GTH 13.77 13.85 -0.58
Guardant Health GH 116.79 125.01 -6.58
Hologic HOLX 73.31 73.81 -0.68
Invitae NVTA 26.50 28.43 -6.79
Labcorp LH 287.02 281.44 1.98
Meridian Bioscience VIVO 18.81 19.24 -2.23
Myriad Genetics MYGN 30.77 32.29 -4.71
Natera NTRA 114.57 111.44 2.81
NeoGenomics NEO 46.00 48.24 -4.64
Opko Health OPK 3.79 3.65 3.84
PerkinElmer** PKI 176.89 173.29 2.08
Qiagen QGEN 55.76 51.68 7.89
Quest Diagnostics*** DGX 146.78 145.31 1.01
Quidel QDEL 132.77 141.15 -5.94
Quotient QTNT 2.53 2.34 8.12
Thermo Fisher Scientific TMO 633.07 571.33 10.81
Veracyte VCYT 47.88 46.45 3.08
360Dx Index Average   147.26 142.79 3.13
*Abbott paid a dividend of $.45 per share on Oct. 14.
**PerkinElmer paid a dividend of $.07 per share on Oct. 21.
***Quest Diagnostics paid a dividend of $.62 per share on Oct. 4.