NEW YORK – Rebounds from March's lows and the positive impacts of SARS-CoV-2 tests being launched by many diagnostics firms led to increases in share price for every company 360Dx Index but one in April.
The 22 percent month-over-month increase for the Index comes after two straight months of significant decline due to decreases in traditional testing and diagnostic usage as a result of the coronavirus pandemic. Significant negative impacts were being felt by many firms at the tail end of March due to the pandemic, but increases in SARS-CoV-2 test orders and positive financial results helped most companies recover.
The general stock market has also recovered slightly, as the Dow Jones Industrial Average rose 11 percent compared to March and the Nasdaq increased 15 percent in April. The Nasdaq Biotech Index also rose 15 percent month over month.
The 360Dx Index's largest gainers during an overall positive month were GenMark Diagnostics (+204 percent) and NantHealth (+86 percent), followed by Opko Health (+66 percent), Meridian Bioscience (+43 percent), and Hologic (+43 percent). The only company whose share price declined was NeoGenomics (-1 percent).
GenMark's skyrocketing share price can be attributed to its preliminary first quarter revenues, which increased 80 percent due to its offering of a SARS-CoV-2 test. The company said in the preliminary report that approximately 80 percent of gross placements were associated with interest in the company's COVID-19 testing, and SARS-CoV-2 consumable revenues were approximately 5 percent of total revenues for the firm's ePlex molecular diagnostic test. GenMark's ePlex SARS-CoV-2 Test received Emergency Use Authorization from the US Food and Drug Administration in March.
NantHealth's steady share price increase during April wasn't accompanied by significant news from the firm this month and was likely the result of improving trends in the general stock market. NantHealth's low share price makes it particularly susceptible to changes in the general market and other factors not tied to news from the firm.
Opko Health's BioReference Laboratories is one of the major reference labs in the US, and it has been providing SARS-CoV-2 testing since March 13. It has also partnered with multiple states, including New York, to provide drive-through testing for COVID-19. Earlier in April, Rite Aid announced BioReference would offer self-swab COVID-19 testing at some of its locations, and this week, BioReference announced it would partner with New York to provide antibody testing for SARS-CoV-2.
Meridian Bioscience also announced positive preliminary financial results, likely contributing to their share price increase. The company said its fiscal second quarter revenues are expected to grow 14 percent, largely driven by high demand for Meridian's molecular products, particularly its SARS-CoV-2 detection reagents. William Blair analyst Brian Weinstein said in a note after Meridian's preliminary earnings that the upside from SARS-CoV-2 products was likely a one-time increase, but that offering its reagents to customers around the world "should open more doors for the company and the Life Science segment down the road."
Last month, the firm launched its Inhibitor Tolerant 1-step RT-qPCR enzyme master mix, which eliminates the need for RNA extraction kits. The company also this week completed its $49 million acquisition of Exalenz Bioscience.
In contrast to the positive financial results for most companies, Hologic reported an 8 percent decrease in fiscal second quarter revenues due to negative impacts from the coronavirus pandemic. However, the company also announced plans to launch its second SARS-CoV-2 test, a molecular assay that will run on the firm's Panther system. In a research note to investors, JP Morgan analyst Tycho Peterson said the company is well positioned to capture revenue from its SARS-CoV-2 tests, due to the large installed base of the Panther instrument. Peterson added that he expects the tests to "pave the way for sustained growth" in molecular diagnostics.
In addition, Hologic's SARS-CoV-2 assay last month received approval from Health Canada, allowing it to be used and marketed in that country.
The one decliner in April was NeoGenomics, which last month announced that its first quarter revenues increased 11 percent year over year. Despite the increase, the company said the COVID-19 pandemic had disrupted test volumes and reduced growth in both its clinical service and pharma service divisions, leading to $4 million in reduced revenue. The company is offering PCR-based testing using Thermo Fisher Scientific's TaqPath COVID-19 Combo test and will soon offer serology testing with Abbott's SARS-CoV-2 IgG antibody test. SVB Leerink analyst Puneet Souda said in a note that the COVID-19 testing could provide downside protection for the company in the near term.
