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Fulgent Genetics, Genetron Pace Stock Price Increases as 360Dx Index Rises 10 Percent to Start 2021

NEW YORK – Diagnostics companies got off to a strong start in 2021 as the stock prices of many firms rose during January and the 360Dx Index rose 10 percent month over month, continuing December's growth.

Of the 32 companies in the Index, 27 firms saw their share prices increase last month led by Fulgent Genetics (+112 percent), Genetron Health (+65 percent), Quidel (+40 percent), and Myriad Genetics (+39 percent). Meanwhile, five companies' stock prices fell slightly, led by Adaptive Biotechnologies (-6 percent) and GenMark Diagnostics (-5 percent).

The Index increase outpaced the broader markets as the Dow Jones Industrial Average was down 2 percent. The Nasdaq was up 1 percent month over month, and the Nasdaq Biotechnology Index improved 6 percent.

Although Fulgent Genetics had little in the way of news during January, the Biden Administration's unveiling of its plan to tackle the COVID-19 pandemic and expand testing across the US likely drove some of the increase, as Fulgent has been a major provider of SARS-CoV-2 testing. Part of the plan involves increasing testing in schools, and Fulgent has provided testing for New York City public schools since September. Piper Sandler analyst Steven Mah said in a research note said that Fulgent is "well-positioned as we shift to large-scale surveillance testing."

The only significant news from Genetron Health was its announcement early in the month that it had entered an exclusive strategic partnership with Chia Tai Tianqing Pharmaceutical Group to comarket and copromote Genetron's HCCscreen early screening test for liver cancer in hospitals across designated territories in China. The firm also announced research findings at the World Conference on Lung Cancer from an analysis of a lung cancer cohort that used the firm's One-Step Seq Method and other products to explore mutation patterns and gene fusions.

In contrast, Quidel had a busy January, announcing that preliminary Q4 revenues increased more than fivefold from the same period a year ago, although the revenues came in below analysts' expectations. The firm's stock price has consistently risen throughout the COVID-19 pandemic as it has developed and launched a variety of SARS-CoV-2 tests, such as the Sofia antigen and Solana SARS-CoV-2 tests. William Blair analyst Brian Weinstein said in a note that "demand for the company's products remains at extraordinary levels, and based on some catalysts we expect in the not too distant future, we believe demand will again take a step higher."

At the JP Morgan Healthcare Conference last month, Quidel also announced that it anticipated $1.66 billion in FY2020 revenue, up more than threefold from the previous year, with the Sofia SARS-CoV-2 antigen test contributing $1 billion in sales. During the conference, CEO Doug Bryant said the firm also expected regulatory clearance for an at-home, non-prescription, over-the-counter version of its QuickVue COVID-19 test.

Early in the month, Myriad Genetics announced it would sell its autoimmune business, including the rheumatoid arthritis test Vectra DA, and reorganize internal operations. The sale is part of Myriad's plan to recover its footing after multiple quarters of declining revenues. Myriad also shared last month that its Myriad myChoice Diagnostic System and BRACAnalysis Diagnostics System would be reimbursed by the Japanese government after receiving regulatory approval there as companion diagnostics.

Myriad Genetics was also in the news at the JP Morgan Healthcare Conference, where Illumina unveiled a collaboration with the company based on the use of comprehensive genomic profiling to analyze homologous recombination repair deficiency. Under the agreement, the companies will create a kit-based version of Myriad's myChoice CDx for international markets, using Illumina's customer base for its TruSight Oncology 500 next-generation sequencing test.

Among the decliners, Adaptive Biotechnologies' major news in January was the announcement at the JP Morgan Healthcare Conference of its partnership with AstraZeneca to apply Adaptive's ImmunoSeq T-Map product across AstraZeneca's oncology portfolio. During the firm's presentation, Adaptive CEO Chad Robins also said it was expanding the number of indications for its ClonoSeq assay, while President Julie Rubinstein said the company was seeing interest in its T-Detect COVID test.

Despite its decrease in share price, GenMark Diagnostics' news last month was largely positive, with the company saying its preliminary Q4 revenues rose 84 percent year over year driven by its ePlex molecular sales, largely due to demand for its respiratory pathogen and blood culture identification panels. The company said at the JP Morgan Healthcare Conference that it had invested $20 million in a facility that could hold six test manufacturing lines, ramping up its capacity to 200,000 tests per month by the end of the second quarter of 2021. Doug Schenkel, an analyst at Cowen, said near-term COVID-19-related tailwinds, like the new manufacturing lines, "should result in longer-term revenue growth."