Sequenom slumps as Illumina buys competitor
NEW YORK (AP) — Down syndrome test maker Sequenom Inc. said Sunday that its sales climbed in the fourth quarter, but its shares fell on the threat of increasing competition.
The San Diego company's revenue for 2012 rose 59 percent to $89 million, which implies about $33 million in revenue in the fourth quarter. That's more than analysts expected, as Sequenom said it ran about 60,000 MaterniT21 Plus tests in 2012, or more than 24,000 in the latest quarter.
According to FactSet, analysts on average expected $29.8 million in revenue in the fourth quarter and $85.3 million for the year.
On Monday genetic analysis company Illumina Inc. said it would buy privately held Verinata Health, a company that makes prenatal tests for Down syndrome and other conditions that involve missing or extra copies of chromosomes. The deal is worth up to $450 million.
Shares of Sequenom fell 15 cents, 2.9 percent, to $5.08 in morning trading. Illumina shares fell $3.86, or 7.1 percent, to $50.90.
Sequenom launched MaterniT21 plus in the fall of 2011. It is a blood test intended for women who are at high risk for a Down syndrome pregnancy. Sequenom says the test can detect the chromosomal anomaly that causes Down syndrome as early as 10 weeks into a pregnancy. The test also looks for two other chromosomal disorders.
The company said it ran a total of 92,000 prenatal and retinal diagnostic tests in 2012 and is now on pace to run 120,000 MaterniT21 tests per year.
Oppenheimer & Co. analyst David Ferriero said Sequenom reported "strong performance" in the fourth quarter and said the company controls about 90 percent of the market for noninvasive Down syndrome blood tests. Ferreiro said he thinks Illumina will have to invest a significant amount of money in Verinata in order to compete with Sequenom.