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Dx Firms' Stocks Trend Upward in November

NEW YORK (360Dx) – Share prices of diagnostics firms awoke from a months-long slumber as the 360Dx Index grew 7 percent month over month in November.

The increase follows an almost 2 percent increase in October and a flattish summer.

Accelerate Diagnostics (+49 percent), Bio-Rad Laboratories (+23 percent), and Foundation Medicine (+18 percent) led the gainers, while GenMark Diagnostics (-40 percent) and Opko Health (-22 percent) were the biggest decliners. Overall, 16 companies saw their stocks increase in value last month, and nine firms saw their share prices retreat.

 The Index also outpaced the broader markets, beating the Dow Jones Industrial Average, which was up almost 4 percent month over month, the Nasdaq, which rose 2 percent, and the Nasdaq Biotech, which expanded less than 1 percent.

 Accelerate started November by reporting a sharp spike in its third quarter revenues that, nevertheless, fell short of analysts' consensus estimate. As the month progressed, the firm's stock price continued gaining momentum, though there were no obvious drivers. The increase also represented a rebound from a sluggish October for Accelerate's stock, which dropped nearly 12 percent month over month.

Bio-Rad's share-price jump last month was fueled by its third quarter results. After reporting a 5 percent rise in its year-over-year revenues, the firm's shares rose 21 percent in one day. At the end of the month, the company also announced a new $250 million share repurchase program.

Foundation Medicine, meanwhile, said early last month that its third quarter revenues shot up 45 percent year over year, resulting in a one-day 20 percent spike in its stock value. On the last day of November, the firm received positive news from the US Food and Drug Administration and the Centers for Medicare & Medicaid Services, when they said that the company's FoundationOne CDx (F1CDx) test had been approved by the FDA, while CMS issued a preliminary national coverage determination for the next-generation sequencing-based cancer profiling test and other similar tests. 

That prompted an 18 percent increase in Foundation's share price to start December last Friday.

Other firms that saw their stocks improve in the double digits in November were Oxford Immunotec (+13 percent) and Hologic (+10 percent).

Among the decliners in November, GenMark saw a continued erosion in its stock price, and last month's 40 percent fall followed a 1 percent month-over-month dip in September, and a 17 percent contraction in August.

Early in November, GenMark said its third quarter revenues were up 7 percent year over year, but short of the consensus Wall Street estimate. Afterward, Raymond James analyst Nicholas Jansen downgraded GenMark's shares to Market Perform, citing issues including slower European traction of the company's products, a shift to more rentals, versus purchases, of the firm's instruments, and a delay in US menu expansion by one to two quarters.

"We still remain firm believers in the technology and believe the ePlex system will be a share gainer over time, but realization of this now appears to be more of a 2019 event, which pushes us to the sidelines for now even amidst low sentiment," Jansen wrote in a research note.

 Disappointing earnings results also fueled Opko's share-price decline. After reporting its third quarter revenues fell almost 12 percent year over year, the firm's stock took a one-day 16 percent hit.

Later in the month, Opko subsidiary Bio-Reference Laboratories also confirmed that it was shutting down medical genetics information resource GeneTests.org, effective Dec. 1.

Other significant decliners last month include NantHealth (-12 percent) and Natera (-11 percent).