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Stocks of Diagnostics Firms End Summer With Sluggish September

Due to technical issues, incorrect figures were used to calculate the index in the original version of the story. It has since been corrected. 360Dx regrets the error and apologizes. 

NEW YORK (360Dx) – The 360Dx Index finished the summer with another sluggish month as it recorded a flat September, the third consecutive month that the index barely moved month over month.

Overall, the share prices of 16 firms in the index ticked up, while 10 firms' stock prices ticked down.

In comparison, the Dow Jones Industrial Average was up 2 percent month over month, while the Nasdaq inched up 1 percent. The Nasdaq Biotech increased a fraction of 1 percent.

Pacing the gainers was NantHealth, which had been August's biggest decliner. At the end of August, it announced a distribution deal covering its cancer molecular profiling service GPS Cancer with Asia Genomics. The firm remained silent in September, which was enough to increase investor confidence in NantHealth — its share price rose nearly 49 percent, compared to August.

Quidel (+26 percent) also saw a leap in its share price last month, as it benefitted from Abbott's impending $5.3 billion acquisition of Alere. As part of the deal, Alere had to divest certain businesses, including its BNP assay and MeterPro cardiovascular and toxicology assets, to meet the demands of regulators.

Quidel announced its intention to buy the BNP and MeterPro businesses in July. But last month, the firm said that it amended its acquisition of the BNP assay operations to include Quidel's direct commercial responsibility for the assays run on Beckman Coulter analyzers, giving Quidel control over the whole BNP business.

Investors greeted the news by boosting Quidel's stock price 14 percent on the day the amendment was announced. Investment bank Piper Jaffray also upgraded Quidel's shares to an Overweight rating on the amended deal.

Meanwhile, Myriad Genetics' share price grew almost 19 percent last month. Its stock rose steadily in value throughout September, and later in the month the firm received positive news from the Centers for Medicare & Medicaid Services when it released its preliminary rates under the Protecting Access to Medicare Act. Reimbursements for several molecular diagnostic tests, including Myriad's myRisk Hereditary Cancer test and its Vectra DA rheumatoid arthritis test, increased under the PAMA rates.

Today, Leerink initiated coverage of the company with a Market Perform rating.

Among the decliners for the month, none in the index experienced greater stock-price erosion than Quest Diagnostics (-14 percent). While its share price saw softness throughout September, the stock lost 9 percent of its value from the time the preliminary PAMA rates were released to the end of the month.

Concerns about PAMA continued to reverberate throughout the lab industry as it wrestled with the implications of the new reimbursements and the trickle-down effect, though some predict larger labs like Quest and Laboratory Corporation of America (-4 percent) could benefit through acquisitions.