NEW YORK (360Dx) – A massive beat of analyst expectations by Exact Sciences and a reworked agreement that signaled Abbott's intention to complete its acquisition of Alere catapulted Exact and Alere to the top of the gainers list month over month in the 360Dx Index.
Meanwhile, NantHealth's shares continued to feel the fallout from a story published nearly two months ago, alleging a questionable donation by the company's founder, and it repeated as the index's steepest decliner.
Overall, the index was up nearly 5 percent from March's lumpy results, when it was up less than 2 percent over February. April's results also easily surpassed the broader markets. The Dow Jones Industrial Average grew 1 percent month over month, while the Nasdaq Composite and the Nasdaq Biotechnology indices were up about 2 percent each.
Sixteen companies in the index saw their share prices go up in April, while nine saw their prices drop. One firm, GenMark Diagnostics, saw no change in its stock price.
Exact Sciences was the big gainer (+27 percent) in the index for April, spurred on by its announcement last week that its first quarter revenues more than tripled year over year, driven by a 150 percent increase in the number of Cologuard colon cancer tests that were completed in the quarter.
The firm also easily beat the Wall Street consensus estimates on both the top and bottom lines.
"We believe the momentum will continue with expectations that [the company] will meet and likely exceed the upper end of" Exact's revenue and completed test guidances for 2017, Leerink analyst Puneet Souda said in a research note. "With 100,000 tests performed in 1Q17, Exact Sciences is now guiding for 115,000 in 2Q17, but we would not be surprised to see better-than-expected results again for tests performed as market share penetration is still only at 2 percent."
Meanwhile, Abbott reached a new deal in in mid-April to buy Alere, pushing up that firm's stock price 24 percent month over month. While the new agreement called for a lower price than had been originally negotiated when the two companies first announced their acquisition, it put an end — for now — to questions of whether the transaction would ever be completed.
After reaching a tentative deal in February 2016, Abbott had a change of heart and sought to back out of it following a series of problems encountered by Alere, including the elimination of billing privileges from the Centers for Medicare & Medicaid Services for its Arriva division.
That dispute is ongoing and last week an administrative law judge upheld CMS's decision.
During the month Alere also settled a lawsuit alleging it misled consumers by selling them inaccurate blood test monitoring systems used in the home, and the US Food and Drug Administration cleared the firm's Reader analyzer that reads and interprets lateral flow tests.
NantHealth paced the decliners in the index as investors continued to weigh the effects of a news report in March saying a contract associated with a $12 million donation by the company's founder to the University of Utah forced the school to purchase $10 million in services from NantHealth in return.
The deal provided the company with valuable data that was used to build a product for evaluating a patient's risk for rare and inherited disease, and made it possible for NantHealth to inflate the number of test orders for its flagship product, the GPS Cancer test, that were reported to investors in late 2016.
Following the report, a number of lawsuits were filed against NantHealth.