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NantHealth Shares Tick up Sharply While Castle Bio Declines in January; 360Dx Index Relatively Flat

NEW YORK – Though some firms' share prices rose following positive preliminary earnings reports in January, overall, the 360Dx Index was relatively flat month over month, as it rose a fraction of 1 percent to begin 2020.

The stagnation follows a slight increase to the index in December. Of the 28 companies in the index, 16 companies' stocks were up month over month in January, while 12 companies' share prices declined.

The index was slightly better than the Dow Jones Industrial Average, which dropped a percentage point and beat the Nasdaq Biotech Index, which fell almost 6 percent compared to December. It trailed the Nasdaq, which rose almost 2 percent month over month.

The index's largest gainer was NantHealth (+67 percent), with Invitae (+16 percent), GenMark Diagnostics (+12 percent), and CareDx (+12 percent) coming in next. Castle Biosciences (-10 percent), Oxford Immunotec (-7 percent), and Veracyte (-6 percent) were the biggest decliners during January.

NantHealth's share price rose late in the month after the company announced it had developed artificial intelligence software to improve lung cancer diagnoses. Shares for the company jumped 56 percent after the announcement. In other news, the firm also announced it had agreed to sell its connected care assets to Masimo for $47.3 million in cash. The assets include the DCX device connectivity system, the VCX patient vitals software, the HBox connectivity hub, and the Shuttle interoperability cable. The deal is expected to close by the end of Q1.

Invitae's share price increase is likely due to its preliminary revenue report at the JP Morgan Healthcare Conference, where the company said that its 2019 revenues are expected to rise 45 percent year over year. However, the firm's $216 million in revenues fell short of the consensus Wall Street estimate of $219.9 million and Invitae's own revenue projections of $220 million. The company's testing volume is anticipated to be up 60 percent, but volumes in the fourth quarter of 2019 are expected to be slightly softer than had been projected, CEO Sean George said at the conference.

GenMark Diagnostics also provided positive preliminary earnings results at the JP Morgan conference, where it reported a 40 percent increase in its fourth quarter revenues. GenMark's $27 million in revenues would also fall short of the average Wall Street projection of $27.6 million. The company said it expects to report total revenue of around $88 million, which would be slightly less than the Wall Street estimate of $88.3 million. Estimated revenues for the company's ePlex molecular diagnostics platform were around $19 million in the fourth quarter of 2019, a 58 percent increase over the same quarter in 2018.

CareDx had a busy January, as a judge sided with the company against Natera in a false advertising suit CareDx filed in April 2019. The judge largely ruled against Natera's motion to dismiss CareDx's false advertising and unfair competition claims. Continuing the legal saga, earlier this month Natera sued CareDx over its patent covering cell-free DNA-based diagnostic methods.

CareDx also received the CE mark for its AlloSeq cfDNA kit, which is used to quantify the level of donor-derived cell-free DNA in transplant recipients to measure graft health.

CareDx also announced preliminary fourth quarter revenues increased 52 to 53 percent to between $35.7 million and $36 million, which would beat analyst expectations of $34.2 million. The company said it's expecting to report full-year revenues of $127 million to $127.3 million, which would represent a 66 percent increase from 2018.

Castle Biosciences led the decliners, although it's unclear why, since the company's main news this month was preliminary performance results showing a 37 percent increase in its DecisionDx-Melanoma test results in the fourth quarter of 2019.

Oxford Immunotec, another decliner, presented at the JP Morgan Healthcare Conference earlier this month and said its partnership with Quest Diagnostics to sell its T-spot.TB test kits is proceeding according to plan. The company also said it has started to develop a test to measure the immune response against infections in patients who have received transplants.

Lastly, Veracyte's only news this month was an announced collaboration with Acerta Pharma to provide genomic information to support the development of oncology therapeutics.