SQNM ($5.47) - Financing removes uncertainty.
Below I review the financing and summarize some of the key points from the recent earnings conference call in which they highlight key milestones for their T21 test (non-invasive fetal down syndrome test). Basically the T21 test is a potentially, "game changing" technology in which the presence of fetal down syndrome can be determined by extracting fetal DNA from the mother's blood. Clearly a MUCH better alternative to Amniocentesis.
Financing:
After reviewing the financing, this is a positive for SQNM:
*The financing has been looming for months. Now that it is complete, investors can feel confident SQNM has the capital to continue with their T21 program.
*Done as a private placement with accredited investors.
*Although I am not familiar with the terms, private placements are generally restricted for a period of time so there should be no immediate concern of dilution.
Conference Call Summary:
*Final approval of settlement in class action securities lawsuit. Issued shares as part of settlement - a good sign IMHO.
*Lawsuit with Xenomics dismissed.
*T21 test will be a purely DNA based approach.
*T21 will be the single largest investment made in 2010.
*Optimization of DNA sequencing-based test to be completed by Q32010
*Expected to collect a sufficient number of samples from high risk pregnancies to enable blinded pivotal studies by the end of 2010.
*Begin testing of T21 validation samples by Q42010
*Expect to complete the testing of the T21 validation samples by Q22011.
*Data analysis, journal submission and peer review completed by the end of 2011.
*Expect to launch T21 test as a LDT (laboratory developed test) by the end of 2011.
*File a PMA (premarket approval) by the end of 2012
*Opening a second lab by Q42010. Will use the lab to validate and launch the T21 LDT.
Summary:
While there are no immediate term catalysts for SQNM, the worst seems to be behind them with the financing in place and they now have clear direction with the T21 test. Sequenom's CEO, Harry Hixon, served as president and chief operating officer of Amgen Inc., and as a member of its board of directors from 1988 to 1991. This was a significant growth phase for Amgen. He has a proven track record. Let's see if he can do it again with Sequenom.
Definitely one to watch.
