Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Sequenom Inc. Shares Plunged

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

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 Sequenom (NASDAQ: SQNM  ) , a global life sciences company focused on developing genetic analysis devices, tumbled as much as 31% after disclosing in an SEC filing after the bell yesterday that it had received an unfavorable ruling in its ongoing patent litigation case with privately held Ariosa Diagnostics.

So what: According to the filing, the company received an order and opinion from the U.S. District Court for the Northern District of California yesterday regarding U.S. patent 6,258,540, a key patent used in prenatal genetic testing, which Sequenom's release refers to as "540." The court ruled that 540 is ineligible for patenting under the current patent code since it's based on a "natural phenomenon." As such, the court denied a summary judgment against Ariosa because of what it considers to be an invalid patent. Sequenom plans to appeal the decision to the Federal Circuit Court of Appeals.

Now what: Clearly having a key patent invalidated by a U.S. District court is never a good thing as it could expose the company to competition down the road by removing exclusivity. We saw a similar situation earlier this year when Myriad Genetics (NASDAQ: MYGN  ) saw some of its patents on naturally occurring genomes in the body get thrown out as invalid which opened its BRACAnalysis BRCA 1 & 2 gene test to almost instant competition. In the case of Sequenom, I feel we're looking at a bit of an overreaction. There are already a number of prenatal genetic tests on the market, so this ruling isn't too big of a concern. I believe investors are just more disappointed in the outcome because they were looking for the expected cash judgment from Ariosa to bolster its cash on hand. I would certainly encourage more risk-willing investors to give Sequenom a look at these levels as I do consider its technology to be attractive enough to lure in a potential buyer.

If you want big potential, check out this company!
Although Sequenom's proprietary genetic platform could offer investors big rewards, this incredible tech stock is growing twice as fast as Google and Facebook, and more than three times as fast as and Apple. Watch our jaw-dropping investor alert video today to find out why The Motley Fool's chief technology officer is putting $117,238 of his own money on the table, and why he's so confident this will be a huge winner in 2013 and beyond. Just click here to watch!

Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 31, 2013, at 6:01 PM, russkr wrote:

    To be precise, the Court's order not only denied Sequenom's Motion for Summary Judgment but also granted Ariosa's Motion for Summary Judgment. The former would have been a minor setback, but the latter ends the case in Ariosa's favor (subject to appeal, though).

    I have been long SQNM for a long time but the company has not caught any breaks. This appeal will eat up significantly more amounts of cash. With their cash burn over the last 4-6 quarters and no trustworthy signs that profitability is near, it's hard to be optimistic about the stock.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2708166, ~/Articles/ArticleHandler.aspx, 9/27/2016 10:09:52 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,125.37 30.54 0.17%
S&P 500 2,150.66 4.56 0.21%
NASD 5,274.90 17.41 0.33%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
SQNM $0.00 Down +0.00 +0.00%
Sequenom CAPS Rating: **
MYGN $21.99 Up +0.42 +1.95%
Myriad Genetics CAPS Rating: ****