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Coronavirus Fears Depress Most Diagnostics Firms' Shares as 360Dx Index Drops 6 Percent in February

NEW YORK – Coronavirus fears affecting the overall stock market in February led to declines in most companies' share prices and a resulting 6 percent drop in the 360Dx Index month over month.

The drop follows a relatively flat month for the index in January. Of the 28 companies in the index, 9 companies' stocks were up month over month in February, while 19 companies' share prices declined.

The index had a better month than the Dow Jones Industrial Average, which fell 11 percent compared to January, and the Nasdaq, which declined 8 percent in February. The Nasdaq Biotech Index had a slightly better month, falling 2 percent month over month.

The index's largest gainer was NantHealth (+32 percent) for the second month in a row, followed by Guardant Health (+14 percent), Invitae (+9 percent), and Luminex (+9 percent). The gains were largely based on positive fourth quarter earnings reports. Myriad Genetics (-36 percent), GenMark Diagnostics (-35 percent), and Accelerate Diagnostics (-24 percent) led the decliners.

NantHealth's share price rose toward the end of the month on the back of a positive fourth quarter earnings report, with the company's revenues increasing 6 percent year over year to $24.2 million. Full year revenues increased 7 percent to $96 million. The company also closed on its $47.3 million sale of its connected care division to Masimo in February.

Guardant Health's share-price increase was also accompanied by positive Q4 earnings. The company's revenues rose 91 percent year over year to $62.9 million, due to growth in the precision oncology business. At the end of January, the company also received a final local coverage determination from Medicare for its pan-cancer liquid biopsy test.

Positive earnings also resulted in Invitae's stock price rising after it reported a 47 percent increase in Q4 revenues, although the company's revenues did fall short of the Wall Street consensus estimate.

Luminex reported a 12 percent increase in Q4 revenues, up to $90.5 million from $81.1 million the previous year, but missed the Wall Street consensus estimate. The company said on its earnings call that it applied to China's National Medical Products Administration for approval and emergency authorization of its NxTag Respiratory Pathogen Panel, which can be used as a rule-out test for COVID-19. In addition, Luminex announced last month it submitted its Verigene II Respiratory Assay for 510(k) clearance from the US Food and Drug Administration.

Among the decliners, Myriad Genetics' significant drop-off can be attributed to its disappointing fiscal second quarter revenues, which fell 10 percent to $195.1 million, due to billing issues in its prenatal business. Q2 revenues were significantly short of the Wall Street consensus estimate of $209.8 million and missed the company's previously stated guidance. Concurrent with the release of the results, Mark Capone stepped down as CEO of Myriad.

Later in the month, the company filed a supplementary premarket approval application with the FDA for its myChoice CDx as a companion diagnostic for olaparib (AstraZeneca/Merck's Lynparza) in combination with bevacizumab (Genentech's Avastin).

GenMark Diagnostics' share price decline, meanwhile, followed the departure of Hany Massarany as the firm's CEO early in the month. Also, like many companies, its stock price retreated on Feb. 24 and afterwards, on fears around an approaching global SARS-CoV-2 pandemic.

Accelerate Diagnostics' share prices steadily declined throughout the month, despite last week's announcement that its Q4 revenues increased 94 percent year over year. Despite, the revenue spike, the company's $3.5 million in revenues fell short of the consensus Wall Street estimate of $4.7 million. On its earnings call, Accelerate said it is also rolling out new sales and marketing approaches for its Pheno bacterial identification and antimicrobial susceptibility testing instrument.