Sequenom, Inc. (SQNM) Earnings: An Early Look

Contrary to that assessment, Sequenom actually had a lot of promising news early in the quarter. In November, the company said that its RentaGene AMD test was successful in predicting the progress of macular degeneration, and added that volume of its MaterniT21 test for Down syndrome had increased substantially. When the American College of Obstetricians and Gynecologists recommended a test for another condition that the MaterniT21 test can detect — and which the company said in February it would now screen for — the road looked clear for Sequenom to grow astronomically.

Sequenom’s preliminary full-year results support that generally positive assessment, with a call for 59% revenue growth on a huge gain in diagnostic services. But even with these favorable trends, Sequenom has had difficulty making money, spending down much of its cash on hand yet suffering from negative operating cash flow. Moreover, news in January that rival Illumina, Inc. (NASDAQ:ILMN) would buy Sequenom rival Verinata Health pushed Sequenom’s stock downward.

In Sequenom’s quarterly report, the key will be to decide whether the company will be able to cash in on the profit opportunity from its genetic tests before it runs out of cash and needs to do what could be a highly dilutive offering to raise capital. Sequenom is speculative, but it has a lot of potential if it can improve its operational efficiency.

The article Sequenom Earnings: An Early Look originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Illumina.

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