Sequenom Drops 4% on Larger-Than-Expected Q4 Loss

[Stocks-to-Watch]

Shares of genetic analysis technology firm Sequenom (SQNM) are off 28 cents, or 4%, at $7.45, after the company beat Q4 revenue estimates, reporting $10.8 million versus $9 million expected, but turned in a larger-than-expected 30 cent-per-share loss, compared to estimates of 25 cents.

Q4 revenue declined 11%, year over year, while gross profit fell to 50.5% of sales from 59.5% as the company got lower prices for its genetic analysis equipment and spent an increasing amount of money on ramping up its diagnostic test business.

R&D and general expenses both rose on a dollar basis from year-earlier levels. The company “made significant steps” in settling class action lawsuits in the quarter, said Harry Hixson, chairman and CEO. Those suits came about after the implosion of the company’s diagnostics business late last year, after improper handling of test data called into question the company’s development of a prenatal test for Down Syndrome.

The company also obtained an extension on its license to use a key patent underlying its prenatal tests, Hixson said.

Two prenatal tests recently introduced commercially, one for detecting blood incompatibilities between mother and child, and one for detecting the sex of the fetus, were proof, Hixson said, that “the science of detecting circulating cell free fetal nucleic acids can be developed into commercially viable tests.”

The company ended the quarter with $42.7 million in cash and equivalents.

Management is holding a conference call with analysts that you can listen to starting at 4:30 pm, Eastern, here.



Original Article Source by Barrons.com