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Mixed Performance for Dx Firms' Stocks in November as 360Dx Index Rises 2 Percent

NEW YORK (360Dx)– Stocks of many diagnostics firms rebounded in November from a difficult prior month as the 360Dx Index rose almost 2 percent month over month.

The index's improvement followed a decline of nearly 9 percent in October, driven by weakness in the broader markets. In November, the index matched the Dow Jones Industrial Average, which also was up almost 2 percent month over month, and beat the Nasdaq Composite, which grew a fraction of 1 percent. However, it lagged behind the Nasdaq Biotech, which was up almost 5 percent.

But, overall, performance in the sector was mixed with Meridian Bioscience (+17 percent), Hologic (+14 percent), and CareDx (+12 percent) pacing gainers in the index while NantHealth (-43 percent), Myriad Genetics (-28 percent), and Natera (-21 percent) were the sharpest decliners.  

Meridian Bio started the month by reporting fiscal 2018 fourth quarter and full year financial results that beat the consensus Wall Street estimates on the top and bottom lines, leading to a one-day increase of 16 percent in the company's share price.

It marked the first time that Meridian Bio held a conference call with analysts to discuss its financial results as the company vowed to be more transparent about its business. In an interview, CEO Jack Kenny also outlined the firm's plans for its molecular as well as immunoassay platforms and strategy to drive R&D.

The firm ended November by announcing it had received clearance from the US Food and Drug Administration for a cytomegalovirus assay for newborns.

Hologic, meantime, reported Q4 financial results last month that beat analysts' average estimate on the top line but missed the consensus estimate on the bottom line.

CareDx's month-over-month share-price improvement was driven by the public offering of 2 million shares of its common stock, which raised $52.8 million in net proceeds. Despite the impending dilution to shareholders, in the two days between the announcement of the offering and its closing, CareDx's share price climbed 13 percent.

The company also announced at the start of November that its Q3 revenues grew 74 percent year over year, and it raised its full-year 2018 revenue guidance to a new range of $74 million to $75 million from an earlier range of $68 million to $70 million.

Among the decliners, NantHealth's only announcement last month was that its Q3 revenues grew 3 percent year over year but missed the consensus Wall Street estimate.

On a conference call to discuss the results, NantHealth Chairman and CEO Patrick Soon-Shiong voiced frustration with the company's inability to get reimbursement from payors for its tests and said that the firm would stop offering for free its GPS Cancer and Liquid GPS testing in some cases.

Myriad Genetics, meanwhile, said at the start of November that its fiscal Q1 2019 revenues grew 13 percent year over year but fell short of the consensus Wall Street expectation.

Doug Schenkel of Cowen noted in an investor note that Myriad lowered its fiscal 2019 revenue guidance and cited near-term uncertainties in the firm's clinical business.

"While the company was able to hit its revenue and EPS targets for the quarter, we believe it was at best a mixed update overall," he wrote. The long-term picture for Myriad's business remains unchanged following its Q1 results, but nearer-term revenue growth could be limited, "which tempers our enthusiasm for the clinical business in [fiscal 2019]," he added as he maintained a Market Perform rating on the company's stock.

In the middle of the month, Myriad said it had reached a deal with Bank of America to buy back $50 million of its common stock.

Natera announced last month a 17 percent year-over-year increase in its Q3 revenues, but it also missed analysts' average estimates on the top and bottom lines.