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Dx Stocks Rise in July Led by Natera, Invitae

NEW YORK (360Dx) – The stocks of most diagnostics firms entered the second half of 2018 on a roll as their share prices continued ticking up in July.

For the month, the 360Dx Index grew 5 percent month over month on the heels of a similar rise in June. The number of gainers during July (19) outpaced the number of decliners (eight), and several firms' stocks improved sharply. Natera (+22 percent), Invitae (+20 percent), and Opko Health (+20 percent)  led the gainers, while Enzo Biochem (-15 percent) was the sole double-digit decliner for the month.

The index benefitted from a bullish broader market. The Dow Jones Industrial Average and the Nasdaq Biotech Index each rose 5 percent month over month, while the Nasdaq Composite was up 2 percent.

Natera's fruitful July followed an even more optimistic June when its share price was up 61 percent on news that it would enter the transplant rejection testing space. Last month, the company said that it planned to offer 4.5 million shares of its stock at $20 per share. The offering was expected to close mid-July. Natera has not announced whether that has yet happened.

Also in July, the American College of Obstetricians and Gynecologists took what Cowen analyst Doug Schenkel called "a step that may lead to clearer, more positive guidelines for average-risk NIPT" when the organization withdrew a Committee Opionion that offered only limited support for average-risk NIPT, relative to other screening methods.

He added that an updated ACOG Committee Opinion on average-risk NIPT could come in a few months, and if ACOG were to issue more positive guidelines for NIPT for this group of pregnancies, it could materially benefit Natera.

"Considering [Natera] currently has [approximately 55 percent] share of the average-risk market, an updated ACOG decision should disproportionately benefit the company. NTRA has indicated that $12 [million] of incremental revenue each quarter ... would flow straight to bottom line if average-risk NIPT was universally reimbursed, as [the company] runs [approximately] 30K average risk NIPTs a quarter that it does not receive reimbursement for," Schenkel wrote in a note issued in mid-July.

Invitae, meanwhile, had no obvious drivers for its stock price increase, which represented a rebound from a flat June.

Similarly, Opko's July share-price jump occurred in the absence of any announcements.

Other double-digit gainers in the index included Myriad Genetics (+17 percent), which announced it had completed its acquisition of Counsyl this week; Luminex (+15 percent); and Thermo Fisher Scientific (+13 percent).

Enzo's July drop-off followed a similar decline the previous month when its stock price shrank 20 percent on the announcement that its fiscal third quarter revenues were down 5 percent year over year.

Two additional firms were added to the index this month — CareDx, whose share value grew 10 percent month over month, and Bio-Techne, whose stock price rose 9 percent.