3 Reasons to Buy Sequenom Today

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Historically, tumultuous times offer some of the best opportunities to buy stocks, and the market's recent mess surely qualifies. Investors are rightfully weary of the prospects of many companies today, but many believe genetic analysis firm Sequenom (Nasdaq: SQNM  ) is an exception.

In our Motley Fool CAPS community, 91% of the 662 investors rating the company are bullish, so there's no shortage of reasons why Sequenom will thrive. I've highlighted three below.

Here at the Fool, we're all for looking at both the good and the bad sides of an investment. Once you're done with this article, you can read the case against the stock, weigh in with your own comments below, or rate Sequenom yourself in CAPS.

1. Significant upside potential
CAPS members believe that if Sequenom is able to successfully commercialize its Down syndrome test, it'll have big potential for growth, like Intuitive Surgical (Nasdaq: ISRG  ) and other game-changers. While larger medical-related companies such as Gilead Sciences (Nasdaq: GILD  ) , Amgen (Nasdaq: AMGN  ) , and Bristol-Myers Squibb (NYSE: BMY  ) are more stable, predictable investments, many investors are willing to shoulder the risk associated with small-cap Sequenom to take part in the big potential payback later.

2. More than a one-trick pony
Although Sequenom has a lot riding on its Down syndrome test -- the results of which pretty much drive the stock -- the company does have more to offer. It expects continued growth from its proprietary MassARRAY systems, and it recently launched its test for cystic fibrosis. With two more tests expected to launch early this year, some investors like Sequenom's potential to utilize its underlying science and strong intellectual property to expand beyond its current diagnostic tests.

3. Ducks in a row
Sequenom has made some sequential revenue progress in recent quarters, put a new management team in place, and is working to get through the setbacks to its Down syndrome test. While it has a ways to go to reach the size of biotech highfliers such as Illumina (Nasdaq: ILMN  ) or Myriad Genetics (Nasdaq: MYGN  ) , some CAPS members believe that if it continues to show progress, it could join this elite crowd

To see details of what CAPS members are saying now about Sequenom, just click on over to Motley Fool CAPS and have a look -- or add your own thoughts directly to this story in the comments box below.

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Fool contributor Dave Mock now has more than three reasons why feeding wild animals is not a good idea. He owns no shares of companies mentioned here. Intuitive Surgical is a Rule Breakers pick. Illumina is a Stock Advisor selection. The Fool's disclosure policy has never faked a fever to miss school.

Read/Post Comments (3) | Recommend This Article (15)

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 January 15, 2010, at 6:38 PM, madmilker wrote:

    one reason not....I bought BMY.

  • Report this Comment On January 17, 2010, at 10:10 AM, mgw6 wrote:

    Diagnostic technologies such as those being worked on at Sequenom should not be assessed merely in the context of patient identification. These tools and yet to be discovered diagnostics, may become essential compliments to drug treatment. Developing these diagnostics in fact, could become a significant competitive advantage, marketing tool, and may eventually be a necessity for commercial success of some pharmaceuticals in the not too distant future.

    Here are some of the reasons why and how a biotech or pharmaceutical company might consider developing diagnostics to go along with their new treatments?

    The healthcare provider needs for better diagnostics:

    1. To more definitively identify diseases and their underlying cause

    2. Disease identification rather than lab data interpretation

    3. Rapid, easy, “bedside” or office practice testing rather than time consuming laboratory testing

    4. Identify high risk patients who should be considered for preventive treatment

    The market needs for better diagnostics

    1. Desire to know which patients are more likely to respond to which treatments.

    2. Desire to know which patients are more likely to experience side effects or adverse reactions

    3. Tests to determine whether or not a treatment is actually working (having the desired affect)

    4. Better treatment specific diagnostics could lead to less wasteful prescribing and avoid costly hospitalizations related to adverse effects

    Regulatory considerations

    1. Treatment specific diagnostics may provide a quicker path to proof of concept

    2. Treatment specific diagnostic may be able to better establish drug superiority to alternative therapeutic options

    3. May provide a stronger regulatory support for efficacy and safety

    Mike Wokasch

  • Report this Comment On January 27, 2010, at 1:02 PM, drzapp wrote:

    May want to rethink that recommendation...

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