A test that detects genetic abnormalities associated with Down syndrome is just one piece of Sequenom's (NASDAQ:SQNM) focus on increased research and development spending.

Sequenom is expanding its genetic analysis platform into new, high-growth applications as it attempts to gain a competitive advantage against much larger rivals such as Illumina (NASDAQ:ILMN) and Rule Breakers pick Affymetrix (NASDAQ:AFFX).

Near-term growth initiatives involve molecular testing applications for noninvasive prenatal diagnosis, cancer research, and animal genetics. The company is on target to launch next month a prenatal test for RhD incompatibility -- a condition in which a pregnant woman's immune system may attack the red blood cells of her fetus. In development is the test that screens placental fluid to detect genetic abnormalities related to Down Syndrome.

The company's oncology research is focused on detecting circulating genetic material from tumors. Finally, the company is looking for continued growth in its contract research service revenues from UK-based Genus for its application of genetic selection techniques to breed animals for healthier, higher-quality food products.

Earlier this month, the company reported a healthy 43% boost in first-quarter revenues compared to the same period last year. Revenues came in at $9.9 million with a net loss of $3.7 million. Increased revenues were driven by an increased number of placements of the company's genetic analysis platform called MassARRAY and growth in demand for contract research services. The company's net loss was about the same as last year, as increased costs for research and development initiatives along with higher marketing expenses offset the higher sales figures.

Sequenom ended the quarter with $20.3 million cash and subsequently closed a direct common stock offering in April for net proceeds of about $18.4 million. The company provided 2007 financial guidance for revenues of $37 million to $39 million, a net loss of $23 million to $25 million, and cash burn of $16 million to $18 million -- which equates to a 37% increase in revenues over 2006 if the company reaches the high end of guidance, but also increases cash burn from $12.2 million in 2006 as part of new growth initiatives. With just under $40 million in cash and no debt, Sequenom is worth watching to see if current research and development initiatives will lead to increased revenues and eventually profitability.

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Fool contributor Mike Havrilla, R.Ph., B.S., Pharm.D., is a Rite Aid pharmacist who lives, writes, works, and enjoys running on the streets and trails in the small Pennsylvania town of Portage. He invites your comments and feedback. Mike does not have a position in any company mentioned in this article. The Fool has a disclosure policy.