Mixed Month for Diagnostics Stocks as 360Dx Top 30 Ticks up 1 Percent in November

NEW YORK – After a 3 percent decline in October, the 360Dx Top 30 has reversed course, rising 1 percent in November.

The Top 30 trailed the performance of the Dow Jones Industrial Average, which rose nearly 8 percent, and the Nasdaq, which was up 6 percent. The Nasdaq Biotech Index, meanwhile, was essentially flat month over month.

The Top 30's largest gainers were Guardant Health (+63 percent), Natera (+39 percent), and NeoGenomics (+30 percent). The main decliners were Myriad Genetics (-26 percent), Biodesix (-15 percent), and Fulgent Genetics (-15 percent).

Guardant's stock price was buoyed last month by its Q3 financial results and guidance, as well as a favorable court decision. The firm reported that its revenues for the quarter jumped 34 percent year over year to $191.5 million. As a result, the Palo Alto, California-based cancer diagnostics firm raised its full-year revenue guidance for the third consecutive quarter and now expects revenues between $720 million and $725 million compared to the previous range of $690 million to $700 million.

Toward the end of the month, Guardant's stock was boosted even further after a jury awarded it $292.5 million in damages related to a false advertising lawsuit the company brought against Natera in 2021. The suit alleged that Natera engaged in false advertising, unfair competition, and unlawful trade practices related to misleading statements about a study on the performance of Guardant's Reveal minimal residual disease assay.

Guardant's competitor Natera also saw its share price grow in November despite the outcome of that case, largely due to the announcement that its Q3 2024 revenues rose 64 percent compared to Q3 2023. The Austin, Texas-based company ended the quarter with $439.8 million in total revenues, up from $268.3 million in the prior-year quarter. Natera also raised its full-year revenue guidance to between $1.61 billion and $1.64 billion from the previous range of $1.49 billion to $1.52 billion.

At the end of November, Natera also announced that its Prospera Lung test received coverage from the US Centers for Medicare and Medicaid Services for single lung transplant patients in the surveillance setting. The test previously received CMS coverage for double-lung transplant patients in 2023.

Like the other two highest gainers, NeoGenomics saw its share price rise after the announcement of its Q3 2024 financial results. The firm reported revenues of $167.8 million in the quarter, up 10 percent from $152.0 million in Q3 2023 and beating Wall Street's average estimate of $167.0 million.

The company also last month launched a new next-generation sequencing-based panel called AML Express, covering gene alterations with prognostic and predictive value for patients with acute myeloid leukemia.

In contrast, Myriad Genetics saw its stock price tumble after UnitedHealthcare announced it will no longer pay for pharmacogenetic multigene panel tests in 2025. UHC was the largest payor to reimburse for Myriad's GeneSight test, which JP Morgan analyst Rachel Vatnsdal wrote in a note to investors made up approximately 18 percent of the firm's total revenues in 2023.

However, Myriad also saw its Q3 2024 revenues grow 11 percent year over year to $213.3 million, driven by a 34 percent increase in pharmacogenomics testing revenues. Myriad CEO Paul Diaz said on a conference call to discuss the financial results that the company is engaging with UHC to resolve the coverage issue before the policy goes into effect.

Biodesix's share price dropped nearly 18 percent on Nov. 1 when it released its Q3 financial results, despite reporting that its third quarter 2024 revenues rose 35 percent to $18.2 million from $13.5 million in Q3 2023.

Fulgent Genetics also reported its Q3 2024 financial results last month, announcing that its core quarterly revenues, which excludes COVID-19-related testing and sequencing, grew 9 percent to $71.7 million, in line with analysts' average estimate. 

*Bio-Techne paid a dividend of $.08 per share on Nov. 8.

**Labcorp paid a dividend of $.72 per share on Nov. 26.