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Opko Declines Sharply, Castle Bio, NeoGenomics Jump as 360Dx Index Stays Flat in October

NEW YORK – October, historically often a turbulent month for the stock market, was choppy for some diagnostics companies, even as the 360Dx Index remained relatively unchanged month over month.  

The index increased a fraction of 1 percent month over month in October, after sliding nearly 4 percent in September. Of the 29 companies in the index, 18 firms' stocks were down, while 11 companies' share prices increased.

The increase accompanies an uptick in the broader market, with the Dow Jones Industrial Average rising almost 2 percent and the Nasdaq rising almost 5 percent. The Nasdaq Biotech Index also rose nearly 10 percent month over month.

The company with the biggest drop last month was Opko Health (-32 percent), with Accelerate Diagnostics (-17 percent), Invitae (-16 percent) and Adaptive Biotechnologies (-16 percent) behind it.

In contrast, Castle Biosciences was the biggest gainer (+30 percent), accompanied by NeoGenomics (+20 percent), Myriad Genetics (+18 percent), and Natera (+17 percent).

Miami-based Opko Health had a relatively quiet month, announcing a $75 million common stock offering last week, with proceeds to go toward R&D and commercialization of its portfolio. The company also announced positive results in a late-stage trial of human growth hormone treatment. It is scheduled to release its third quarter earnings on Nov. 5.

Accelerate also had minimal news last month, although it did present a clinical trial poster for its Pheno antimicrobial resistance system. The company's stock prices declined steadily over the month without a clear reason why. Accelerate's earnings for this quarter are scheduled for release on Nov. 7.

Invitae received good news with the Centers for Medicare and Medicaid Services' recent proposed national coverage policy which would cover patients regardless of the stage of their cancer. Medicare reimbursement counts for 23 percent of Invitae's test sales, but the company doesn't have an NGS breast and ovarian cancer risk test cleared by the US Food and Drug Administration, which could hinder its reimbursement prospects.

There was no obvious reason for Adaptive Bio's month-over-month decline, though it continued the firm's stock price slide. In September, its shares were down more than 39 percent month over month.

Among the gainers, at the beginning of October, Medicare administrative contractor Noridian aligned its coverage decision with Palmetto GBA's proposal to cover Castle Bioscience's melanoma test. At the end of the month, the company announced results from a study presented at the American Society for Dermatologic Surgery's annual meeting that found Castle's DecisionDx melanoma test improves prediction of patients' risk of melanoma recurrence. That led to a one-day 8 percent uptick in the company's stock price.

NeoGenomics was another big gainer last month on the back of a 51 percent revenue increase during Q3 2019. The firm's share price leaped 12 percent the day of the announcement.

Myriad's stock price increased on the recent FDA approval of the company's mcChoice CDx as a companion diagnostic for determining patients' homologous recombination deficiency, used with niraparib (GlaxoSmithKline's Zejula). Along with Castle Biosciences, Myriad also received good news from Noridian, which issued a draft local coverage determination for its GeneSight test, aligning with Palmetto's previous LCD.

Earlier last month, Natera priced its $200 million common stock offering, which it said it will use for working capital and R&D investment. The company also said it expects its third quarter earnings to top Wall Street estimates, predicting revenues in the range of $74 million to $76 million, above the consensus $73.5 million estimate. The firm has scheduled its earnings for release on Nov. 6.