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New Year Brings Sharp Rebound in Many Diagnostics Firms' Stock Prices in January

NEW YORK (360Dx) – After a rough ending to 2018, shares of many diagnostics firms rebounded in January as the 360Dx Index ticked up 12 percent month over month.

The index's rebound reversed a soft December when it was down 12 percent from the prior month. Of the 27 companies in the index, just four saw their stock prices decline last month. The index beat the Dow Jones Industrial Average, which was up 7 percent month over month and the Nasdaq Biotech Index, which improved 10 percent. It lagged the Nasdaq Composite, which grew 13 percent.

Five companies in the index saw their share value improve by more than 30 percent last month, paced by Accelerate Diagnostics (+58 percent), followed by Veracyte (+45 percent), Exact Sciences (+43 percent), GenMark Diagnostics (+37 percent), and NeoGenomics (+32 percent).

Meridian Bioscience, whose shares were down about 6 percent, was the biggest decliner.

Accelerate Diagnostics started January by preannouncing that its fourth quarter revenues would be down 14 percent year over year and miss the consensus Wall Street estimate. In spite of a difficult 2018, at the 37th annual JP Morgan Healthcare Conference early in the month, CEO Laurence Mehren sought to reassure investors by laying out the company's growth strategy and emphasizing a revitalized sales force and a change in its selling strategy.

Veracyte, meanwhile, was the lone company in the index in December that saw a bump-up in its share price, and investors remained bullish on its stock last month. Right after the start of the year, it and Johnson & Johnson announced a collaboration aimed at lung cancer diagnostics.

Meanwhile, at the JP Morgan conference, the company said it recognized an estimated $90.5 million in 2018 revenues and anticipates it would be cash-flow break even before 2019 ended.

Exact Sciences gave investors something to relish to start the year by announcing it expects a 64 percent year-over-year increase in preliminary Q4 revenues and to beat the analysts' average estimate. At the JP Morgan conference, CEO Kevin Conroy also said that the firm completed around 934,000 Cologuard tests for colorectal cancer, also a 64 percent year-over-year jump. Further he outlined plans by Exact Sciences to develop tests beyond colorectal cancer and/or use blood samples, rather than stool samples.

GenMark's stock price rise appeared to be precipitated by its announcement early in the month that its fourth quarter revenues were expected to increase 21 percent year over year. A few days later, company executives told investors at the JP Morgan conference that it expects to receive US Food and Drug Administration clearance for its gram-negative blood culture identification panel running on the ePlex molecular diagnostics system. In December, GenMark received 510(k) clearance for its for its fungal pathogen and gram-positive panels.

Despite NeoGenomics' large share-price increase, there were no obvious drivers behind it.

Meantime, among the decliners, Meridian Bio is in the midst of operational changes, which include more investments in research and development, and planning for its next-generation molecular diagnostic platform. While those plans continue to play out, the firm reported that its fiscal Q1 revenues were down 2 percent year over year.

Due to its market cap falling below the index's minimum threshold of $250 million for several months, Enzo Biochem has been removed from the index.