NEW YORK – After three months of steady growth, the 360Dx Index saw a reversal of fortunes in September as it fell 4 percent month over month.
The descent reflected a downturn in broader economic markets. The Dow Jones Industrial Average declined 4 percent month over month from August, while the Nasdaq was down 5 percent and the Nasdaq Biotech Index fell 5 percent.
The 360Dx Index's largest, and only, gainers last month were Quidel (+9 percent), Genetron Holdings (+4 percent), and Thermo Fisher Scientific (+3 percent). The decliners were led by Quotient (-24 percent), CareDx (-14 percent), and Castle Biosciences (-13 percent).
The main news from Quidel last month was an announcement from the US Department of Defense that it awarded $647 million to four companies, including Quidel, to purchase over-the-counter SARS-CoV-2 test kits. Quidel's contract was valued at $284.2 million to cover the delivery of 25.6 million tests.
Alex Nowak, an analyst with investment bank Craig-Hallum, wrote that the US government's plan to increase point-of-care COVID-19 testing, announced last month, "feeds directly into [Quidel's] strengths." He added that the company "should be in a good position" to match the demand from the federal government with supply.
Meantime, Genetron's only key announcement in September was its partnership with Impact Therapeutics to discover new targets and develop companion diagnostics for synthetic lethal inhibitors, a class of drugs including PARP inhibitors.
Thermo Fisher, however, had a busy September, led by multiple regulatory approvals and preliminary earnings guidance for next year. At the beginning of the month, Thermo Fisher and AstraZeneca announced a multiyear agreement to codevelop next-generation sequencing-based companion diagnostics for AstraZeneca's targeted therapy portfolio.
That same week, the firm received a $192.5 million contract from the US DoD to ensure reliable domestic production of pipette tips for use within research and diagnostic labs. It said it would use the funding to co-invest with the US government in building a new manufacturing facility in North Carolina.
Later in September, Thermo Fisher said the Japan Ministry of Health, Labour, and Welfare granted approval for the company's Oncomine Dx Target Test for use as a companion diagnostic with Eli Lilly's selpercatinib (Retevmo) to identify patients with RET-fusion positive non-small cell lung cancer who may be candidates for treatment.
The US Food and Drug Administration also granted accelerated approval to Oncomine Dx to identify patients with tumors with EGFR exon20 insertion mutations who could be eligible for treatment with Takeda Pharmaceutical's mobocertinib (Exkivity).
In COVID-19 news, Thermo Fisher received CE marking for its TaqPath COVID-19 RNase P 2.0 kit, a test designed to detect active SARS-CoV-2 infections by identifying any one of eight gene targets from the virus. The test was designed to compensate for current and future COVID-19 viral mutations.
Finally, Thermo provided initial revenue and earnings guidance for 2022, saying it anticipates total revenues of $40.3 billion for next year — which would be a 12 percent increase over its $35.9 billion in anticipated revenues for 2021. Adjusted earnings per share are expected to be $21.16, the company added. The firm also reiterated its 2021 guidance of $35.9 billion of total revenue and adjusted EPS of $22.07.
Multiple analysts said the preliminary guidance was better than expected
Among the decliners, Quotient had no significant news during the month to explain its decline.
The only news for CareDx in September came at the very end of the month. A court ruling filed on Tuesday declared three patents held by Stanford University, and licensed exclusively by CareDx, invalid. The patents are the subject of an infringement lawsuit Stanford and CareDx originally filed against Natera and Eurofins Viracor in March 2019.
In a note from BTIG analyst Mark Massaro, he wrote that "rising investor concerns, and weakness in the stock, revolving around the threat of competition in the transplant diagnostics market … are overblown and more of an investor overreaction to rising competitive noise than what is actually taking place in transplant centers."
Massaro added that the firm appears well positioned in the back half of 2021 "from a numbers perspective."
Castle Biosciences also had only one piece of news in September, leaving its stock price decrease unexplained. It received approval from the New York State Department of Health for its DecisionDx DiffDx-Melanoma gene expression profile test.
|Burning Rock Biotech||BNR||17.88||18.63||-4.03|
|Thermo Fisher Scientific***||TMO||571.33||554.95||2.95|
|360Dx Index Average||142.79||149.01||-4.17|
*Becton Dickinson paid a dividend of $.83 per share on September 8.
**Danaher paid a dividend of $.21 per share on September 29.
***Thermo Fisher Scientific paid a dividend of $.26 on September 14.