Can Sequenom (SQNM) Make It Back Into Investors's Good Graces?
Still keeping my eye on the Sequenom (SQNM) - but the whole idea with this name was to avoid the small cap "biotech" bipolar experience (either a huge win or a huge loss). Unfortunately, this is what this has now turned to, a coin flip. Probably the most bizarre disclosure I've ever been associated with, and I've seen many off the wall things in my years in the market.
Per
CBSMarketwatch
- Shares of beleaguered biotech Sequenom Inc. got a much-needed boost last week in the form of a somewhat favorable report issued by Lazard Capital Markets, but is the stock really that seaworthy?
- Sequenom jumped nearly 15% on May 27, after Lazard analyst Sean Lavin upgraded the stock, now trading in the $3 range, to hold from sell, saying he believes it had more potential upside than downside.
- While cautioning that the shares remain a highly risky play, Lavin asserted that if the company actually produced data to support the accuracy of its new Down syndrome screening test, Sequenom could soar past the $20 mark. (well yes of course! that's the whole premise of the stock; tell us something we don't know) If the test ended up being a flop, the shares could crumble to around $1. (and that's known as a lottery ticket, not an 'investment')
- "The problem with the stock is you don't know if there's life there. It's just a huge black hole right now," said Leerink Swann analyst Bruce Cranna, who also tracks Sequenom, in a recent interview.
If you are not familiar with the saga, here are the Cliff Notes
- Sequenom shares have soared -- and plunged -- over the past year on the market prospects of SEQureDX, its prenatal blood-screening test for Down syndrome that is not only less invasive that those out on the market but possibly more accurate. The rollercoaster ride began a year ago, when Sequenom announced that studies had shown the SEQureDx test was extremely effective in detecting the syndrome. The company added that it expected to be able to launch the test in the U.S. during the first half of 2009. Sequenom shares swiftly gained momentum after that announcement, reaching a peak at around $29 late last September. But then in late April, Sequenom dropped a bomb: Certain unnamed employees had apparently "mishandled" data used to support the test's accuracy, calling into question whether the test was valid at all.
- Even in the long-shot game of biotech, the development bordered on bizarre. Sequenom management has since said it's been re diligently reexamining the data and moving ahead with additional planned studies.
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