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Robust Overall Stock Market Drives 360Dx Index’s 33 Percent Jump in 2019, Led by Natera, NeoGenomics

NEW YORK – 2019 was a good year for the broader markets, and an even better year for many diagnostics companies. 

The 360Dx Index grew by more than 33 percent in 2019 compared to the previous year, outpacing the Dow Jones Industrial Average, which grew by 22 percent in 2019, and the Nasdaq Biotech Index, which increased by 24 percent. The Nasdaq Composite was up 35 percent in 2019.

The index rebounded from modest gains in 2018, when it only increased by 4 percent year over year.

Of the 28 companies in the index, 20 saw their stock prices improve year over year, while six saw their share values retreat. Two firms went public this year, Adaptive Biotechnologies in June and Castle Biosciences in July.

Major gainers included Natera (+141 percent), NeoGenomics (+132 percent), Veracyte (+122 percent), and Guardant Health (+119 percent), accompanied by a few decliners – namely Opko Health (-51 percent) and Meridian Bioscience (-44 percent).

Highlights for Natera during 2019 include signing a $50 million deal with BGI Genomics to commercialize its circulating tumor DNA Signatera minimal residual disease test in China, as well as obtaining a final local coverage determination from Medicare contractor Palmetto for its Prospera organ transplant rejection test for kidney transplant patients, which goes into effect Feb. 3, 2020. The company’s quarterly revenues also increased in the double digits throughout the year, driven largely by sales of its Panorama noninvasive prenatal and Horizon carrier screening tests.

NeoGenomics also saw impressive quarterly increases throughout the year, including 51 percent jumps in both the first quarter and third quarter. The revenue increases were partially the result of the company’s acquisition of Genoptix at the end of 2018, especially in the area of clinical services revenues. NeoGenomics has also touted upcoming developments in both companion diagnostics and next-generation sequencing. 

Veracyte saw its fortunes continue to improve with a final local coverage determination from Palmetto for the company’s Envisia Genomic Classifier assay to clarify the diagnosis of patients with interstitial lung disease who may have idiopathic pulmonary fibrosis. The test was also validated in a clinical study in Lancet Respiratory Medicine

Guardant Health saw substantial quarterly revenue increases throughout the year driven partially by its successful initial public offering at the end of 2018. In the first quarter of 2019, the company’s revenues increased 120 percent, and in Q3 they swelled 181 percent. Guardant also announced in March it would acquire Bellwether Bio, a firm focused on early blood-based cancer detection that relies on detecting epigenetic signals in circulating cell free DNA.

At the end of the year, Palmetto announced the Guardant360 liquid biopsy test has received expanded coverage across a dozen solid tumor types, effective Feb. 3, 2020.  

Among the decliners, Opko Health saw year-over-year revenue contraction in each quarter this year, although it received a recent positive local coverage determination from Medicare contractor Novitas for its 4Kscore prostate cancer test. In its Q3 earnings call, Adam Logal, the company’s CFO, blamed challenges in the payor environment for decreasing revenue from services. Some of those challenges include rate decreases due to the Protecting Access to Medicare Act, prior authorization requirements, and increased denial rates for clinical and genomic testing.

Meridian Biosciences has also seen revenue declines, with an 11 percent decrease in second quarter revenues that fell short of expectations. However, in June the company also acquired GenePOC, the developer of molecular diagnostics platform Revogene. In spite of that, company CEO Jack Kenny said in July that it could be a year before its diagnostics business, whose revenues had been eroding, could be turned around.