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Mixed September for Dx Stocks With Opko Down, CareDx Up

NEW YORK (360Dx) – After several months of healthy growth, shares of many diagnostic firms contracted in September as the 360 Index was relatively flat month over month.

Overall, the stock prices for 14 companies in the index were down during the month while 13 firms' share prices fell. The index lagged the Dow Jones Industrial Average, which grew 2 percent month over month, but was slightly ahead of the Nasdaq Composite and the Nasdaq Biotech Index, each of which were down a fraction of 1 percent.

The decliners were paced by Opko Health (-42 percent), Veracyte (-24 percent) and Quidel (-15 percent.) Meanwhile, CareDx (+19 percent) paced the gainers, followed by Genomic Health (+15 percent) and Invitae (+13 percent).

Opko's stock was pummeled following a lawsuit filed by the US Securities and Exchange Commission alleging it, its CEO Philip Frost, and others engaged in a stock pump-and-dump scheme in which the defendants inflated stock prices through false or misleading information, then sold them for a profit. Opko responding by saying the SEC lawsuit contained inaccuracies that could have been corrected if the company had been notified of the commission's concerns prior to the filing of the lawsuit.

Trading of Opko's shares were halted between Sept. 10 and Sept. 13, and as the month came to a close, several shareholder lawsuits were filed against the company.

Veracyte, which was added to the index this month, had no obvious drivers for its share decline. It ended August by announcing it received a draft Medicare local coverage determination for its Envisia Genomic Classifier test.

Quidel's share-price decrease also came in spite of some positive news. The company ended August by announcing its Sofia 2 Lyme FIA test received FDA clearance and CLIA waiver. At the end of the month, Medicare administrative contractor Palmetto GBA issued an LCD to cover small multiplex viral panels but not larger panels, a development that was seen by some as a positive for Quidel.

In a research note, William Blair analyst Brian Weinstein wrote that the LCD could be a potential upside to Quidel, and other developers of smaller panels, as they "could incrementally gain market share following this decision, which could rise if private payors follow Medicare's lead and change their medical policy."

Meantime, the only news from CareDx in September came mid-month when it said that it launched its Surveillance HeartCare Outcomes Registry, a prospective, multicenter, observational registry of patients who received HeartCare, CareDx's tool which provides information about heart transplant recipient immune activity and donor graft injury.

Its share-price performance in September followed an 81 percent spike in August.

There were no obvious drivers to the increases in the share prices of Genomic Health and Invitae, though the upticks also continued a positive growth trend from the prior month. In August Genomic Health's stock price was up 14 percent month over month, while Invitae's share price ballooned more than 67 percent.