Sequenom, Inc. (NASDAQ:SQNM)

zzlangerhans (99.78) Submitted: 7/2/2012 2:26:27 AM : Start Price: $3.90 SQNM Score: -22.75

Any guidance provided by Sequenom management has to be taken with about a bucket of salt, after one of the most egregious data falsification scandals of the last ten years crushed the share price in 2009. Management states that they now have a proven test for Trisomy 21, but they've chosen the less rigorous, non-FDA regulated homebrew pathway to market the assay. This requires Sequenom to perform each test themselves in their own facility, which seems like a weaker approach than actually farming the test out to individual laboratories. Towards that end, Sequenom has initiated new trials aimed to achieve FDA device approval of the MaterniT test, but they can certainly expect to encounter a skeptical mindset at that agency given their prior shenanigans.

Sequenom wasn't very interesting to me as a green thumb when the stock crested over 5 ahead of the last quarterly earnings PR. But after the company was vague once again about MaterniT revenues and a reimbursement agreement with Coventry Healthcare was abruptly canceled, the stock got interesting. The share price dropped as low as 3.5 despite the fact that Sequenom has another reimbursement agreement with Multiplan Incorporated, a much larger provider than Coventry. More agreements with large providers may be announced in the near future.

You can't blame Sequenom investors from getting spooked easily. But if this company really does have the asset they claim to have, they will ultimately get sales and reimbursements that will drive the share price back into the teens.