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Adaptive Bio, Exact Sciences Among Sharp Decliners as 360Dx Index Slides 4 Percent in September

NEW YORK – Stock prices for many diagnostics companies took a downturn after two months of minimal change for the 360Dx Index.

The index dropped nearly 4 percent month over month in September, after declining a fraction of 1 percent in August. Of the 29 companies in the index, 16 firms' stocks were down and 13 companies' share prices increased.

The downturn comes in contrast to the broader market, with the Dow Jones Industrial Average rising 2 percent and the Nasdaq increasing a half percent in September. However, the Nasdaq Biotech Index fell 3 percent.

Several diagnostics firms saw a greater than 20 percent drop in their stock prices for the month, including Adaptive Biotechnologies (-39 percent), Castle Biosciences (-35 percent), Guardant Health (-27 percent), Exact Sciences (-24 percent), NeoGenomics Laboratories (-23 percent), and Invitae (-21 percent).

On the other end of the spectrum, NantHealth was the biggest gainer (+45 percent), though its share price still trades below $1. Its shares haven't traded above a dollar since March, and early in the year the firm received a delisting warning from Nasdaq because its stock hadn't traded above $1 for 30 consecutive business days. It received a similar warning in May and has until Nov. 4 to regain compliance.

The next highest gains for the month were for Oxford Immunotec (+24 percent) and Myriad Genetics (+22 percent). Oxford Immunotec's share price has fluctuated despite minimal news.

Myriad's stock rise comes after a recent announcement that the company will collaborate with the University of Leeds on the clinical utility of the firm's Prolaris prostate cancer test.

Adaptive had a relatively quiet month, announcing one new partnership with Illumina to develop in vitro diagnostic test kits for its ClonoSeq and ImmunoSeq Dx assays to run on Illumina's NextSeq 550Dx system, and one expanded partnership with Amgen to provide its ClonoSeq assay for use in developing blood cancer therapies.

Despite the partnership announcements, Adaptive's stock decreased steadily throughout the month after sharp gains in August. The firm just went public at the end of June and saw its share price rise from $20 at that time up to $53.51 in early September trading before pulling back to close the month at $30.90.

Castle Biosciences had positive news as well, announcing the company's Q2 revenues were up 168 percent, partially as a result of a draft Medicare local coverage determination announced at the end of August that would expand coverage for its DecisionDx-Melanoma test. Castle's share prices fell after the Q2 revenue announcement and continued to fall throughout the month for no discernable reason. Similar to Adaptive, Castle Biosciences went public in late June at $16 per share and has seen its stock price reach a high of $28.50 in early September before pulling back to close the month at $18.09.

Guardant Health also had few announcements this month and no obvious reason for its stock decline. SVB Leerink analyst Puneet Souda wrote in a note to investors on Sept. 12, "Shares of Guardant have sold off more than 25 percent over the past month despite no change in fundamentals for the trajectory ahead. We view this recent pullback as a buying opportunity into an expanding liquid biopsy" target addressable market of around $50 billion, according to Guardant's estimates.

In contrast, Exact Sciences' decrease comes on the heels of a recent study that called its colorectal screening test Cologuard inefficient. However, the US Food and Drug Administration also recently expanded approval of the Cologuard test to younger people, which raised its shares directly after but didn't significantly impact its monthly slide.