Last Call: Sequenom shares decline

Shares of genetic test maker Sequenom Inc. fell Tuesday, a day after the company was served with a patent infringement lawsuit, though analysts and the company's chief financial officer said the decline could be profit taking.

In afternoon trading, shares were down 69 cents, or more than 5 percent, to $12.15 on volume more than five times average.

On Monday, Beckman Coulter Inc. and its partner, Orchid Cellmark Inc., sued Sequenom over the sale of its iPLEX DNA analysis system. The companies are seeking to block sales of iPLEX, along with unspecified money damages.

Kevin DeGeeter, an analyst with Oppenheimer and Co., said Sequenom shares have surged over the last week resulting from the June 4 release of data from a prenatal test that screens maternal blood for Down Syndrome, and some investors were likely taking advantage of the run-up by selling shares.

Shares had been trading in the $7 range for about a month before the data release.

DeGeeter told The Associated Press the lawsuit is "background noise" unrelated to the share decline, and said the outcome of the suit would likely not be material to any of the companies involved. He said that if Sequenom were to lose the suit, which could take years to resolve, it would probably have to pay nominal royalty fees as a result.

DeGeeter has an "Outperform" rating on shares and a $17.50 price target.

Rodman & Renshaw analyst Elemer Piros said he does not believe the suit has merit as litigation of the type has been common in the sector as a way to secure intellectual property rights.

Piros, who has a "Market Outperform" rating and $13.50 price target, said Sequenom will likely file a motion for summary judgment, though he also doubted a quick resolution.

Sequenom CFO Paul Hawran told the AP the company does not believe the suit is credible. He said that while the filing could have contributed to the stock's decline, shares were up more than 50 percent over the four trading days before Tuesday, leading him to believe some investors may have taken profits.