NEW YORK (360Dx) – April may not have been the cruelest month, but it wasn't benevolent either for the stocks of diagnostics firms.
A positive start to 2019 turned sour last month as most diagnostics firms' stock values declined last month compared to March, and the 360Dx Index slid slightly in April. It marked the first time this year that the index retreated month-over-month.
The index's drop was not as steep as the decline in the Nasdaq Biotechnology Index, which was down nearly 5 percent month over month, but it lagged the Dow Jones Industrial Average, which rose almost 3 percent, and the broader Nasdaq, which was up 5 percent.
The number of decliners in the index outpaced the number of gainers 18 to nine, and only one firm, Exact Sciences (+14 percent), saw its stock value improve in the double digits in April. The decliners were led by Meridian Bioscience (-35 percent), NantHealth (-25 percent), Guardant Health (-15 percent), and CareDx (-14 percent).
Exact Sciences reported a 79 percent year-over-year spike in Q1 revenues on the last day of the month. In a research note earlier in April, though, SVB Leerink analyst Puneet Souda wrote that he saw strong reorder growth for Exact's Cologuard colon cancer screening test during the first two months of 2019, and reiterated an Outperform rating on the firm's stock saying he believes Cologuard is "highly underpenetrated in a $104 million patient-strong population."
Exact, he added, could eventually reach a greater-than-40-percent penetration rate in the market, generating $6 billion in revenue longer term.
Meridian Bio, meanwhile, saw its share price steadily decline throughout April. On Tuesday, its stock dropped 14 percent after the company announced its fiscal Q2 revenues were down 11 percent year over year. The firm also announced a planned acquisition of GenePOC for up to $120 million.
NantHealth, meanwhile, was the index's biggest gainer in March, when its stock rose above the $1 mark for a period. A month later, though, its share price slipped back firmly under that threshold. Toward the end of March, the company said that its Q4 revenues inched up 3 percent year over, but its CEO lamented the lack of payor reimbursement for its tests.
In April Guardant Health returned almost all the gains it saw in March, when its stock price was up 15 percent. The month started with a study that found Resolution Bioscience's ctDx-Lung liquid biopsy test performed better than Guardant's Guardant360 assay. There was positive news, however, as health plans associated with technology assessment firm EviCore said they would begin covering Guardant360 starting in the summer, and investment bank Canaccord Genuity initiated coverage of the company with a Buy rating on its stock.
Also, Medicare administrative contractor Wisconsin Physicians Service Insurance Corporation issued a draft local coverage determination for Guardant360.
Finally, CareDx sued Natera a second time, accusing its competitor of misleading patient and clinicians into thinking Natera's Prospera kidney transplant test was better than CareDx's Allosure organ transplant technology.
CareDx ended April by announcing a deal to buy OTTR Complete Transplant Management for $16 million.