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Exact Sciences Leads Gainers, Invitae Paces Decliners as 360Dx Index Rises 2 Percent in May

NEW YORK (360Dx) – After a bountiful April, the 360Dx Index recorded a more modest May, as it rose a little more than 2 percent month over month.

The increase compares to a nearly 5 percent gain by the index month over month in April.

Exact Sciences led the gainers, followed by Natera and Qiagen, while Invitae and Opko Health paced the decliners. Overall, 17 companies in the index saw their stock prices go up last month, while nine companies' share prices took a tumble.

The index was about even with the Nasdaq Composite, which ticked up 2 percent month over month, and it beat the Dow Jones Industrial Average, which was up a fraction of 1 percent, as well as the Nasdaq Biotechnology index, which was down 4 percent.

May was volatile for Exact Sciences (+22 percent), which saw its stock drop by as much as 7 percent on the day that short seller Citron Research issued a negative report on the company, calling its Cologuard colorectal cancer test "inferior" and characterizing Exact's business model as "disastrous." It further noted insurer United Healthcare's decision not to cover the test due to a lack of data showing fecal DNA tests can accurately screen for colorectal cancer in asymptomatic, average-risk patients.

But by month's end, United Healthcare reversed course and included the test in its Coverage Determination Guideline, making it the last major insurer to provide coverage for Cologuard. Investors rewarded Exact by driving up the firm's shares by almost 12 percent on Wednesday in heavy trading.

Natera, meanwhile, saw a 13 percent jump in its share price in May, despite reporting a 24 percent drop year over year in its first quarter revenues. However, the firm also launched a new noninvasive prenatal test to screen for de novo single-gene disorders. During the company's conference call to discuss its financial results, CEO Matt Rabinowitz said that the test, called Vistara, would add to Natera's suite of women's health products.

Qiagen (+12 percent) also saw a double-digit increase, as it started the month by announcing a joint venture with Chinese IVD shop Maccura Biotechnology to commercialize Qiagen's GeneReader next-generation sequencing system in China and to develop gene panels for that market. It also reported a 3 percent increase in its first quarter revenues.

Invitae began May by announcing a sharp increase in its first quarter revenues that, nonetheless, fell short of analysts' average estimate, but beat expectations on the bottom line. That could not prevent the firm's shares dropping 22 percent month over month, however.

In a research note, Leerink's Puneet Souda said that during the quarter, two payers shifted to an in-network payment system, which created a disruption in payment collections. He added that the disruption "should only last" until the second quarter "with revenue ramp expected" in the second half of the year.

Toward the end of May, NorthShore University HealthSystem said it is working with Invitae to develop a next-generation sequencing test for cancer risk that will combine analysis of about 100 inherited high-risk genes with several hundred SNPs.

Opko also saw a big drop (-21 percent) in its share price last month. It reported early in May that its revenues grew 2 percent year over year in the first quarter, but it missed the consensus Wall Street estimates on the top and bottom lines, prompting a one-day 7 percent drop in its share price. Since then, its stock has been on a steady decline.