Why Sequenom Shares Popped

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of life sciences company Sequenom (Nasdaq: SQNM  ) surged 11% on Thursday after the company announced an agreement with health-care cost-management specialist MultiPlan.

So what: MultiPlan's clients will now have access to Sequenom's MaterniT21 PLUS test, used for pregnant women at increased risk for fetal aneuploidy, which should give Sequenom sales a much-needed boost. The shares have been beaten down over the past year on concerns over compromised data, but today's big endorsement could serve as a turning point in sentiment.

Now what: Don't let this pop keep you from looking into the stock. Even with the rally, Sequenom shares are still down about 45% from their June highs. When you couple that battered stock price with the company's cash-rich balance sheet and still-attractive growth prospects, Sequenom seems to have plenty of upside left.

Interested in more info on Sequenom? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

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Read/Post Comments (2) | Recommend This Article (9)

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  • Report this Comment On April 19, 2012, at 3:38 PM, unkownuser wrote:

    Your comments show that you don't even have the remotest clue about this company.

    Shares have been beaten down over the past year due to compromised data? Dude, that story is ancient history from 2008. Not even worth educating you about current events since you didn't have the common sense to look before you write.

  • Report this Comment On April 20, 2012, at 4:19 AM, PeterVerbeke wrote:

    I have to agree with the previous poster, your DD is below par. How can you state that this is a much needed sales boost for Sequenem? They launched their flagship product the Maternit21 test mid October. Monthly sales have been (roughly):

    Oct: 100

    Nov: 300

    Dec: 600

    Jan 1000

    Feb: 1500

    Mar: 2400

    So SQNM Maternit21 sales are growing by over 50% per month. Of course that growth rate will decline, but even though their official target is 40k tests sold in 2012, I am confident that they will hit twice that and by the end of the year the will be at a yearly run rate of 200k.

    Here are my estimates:

    Apr: 3500

    May: 4700

    June: 6000

    July: 7400

    Aug: 9000

    Sept: 10800

    Oct: 12800

    Nov: 15000

    Dec: 17500

    I won't bother commenting about the compromised data jab. Such a statement alone should disqualify you from writing for MF.

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SQNM $0.00 Down +0.00 +0.00%
Sequenom CAPS Rating: **