Well, we will see what happens tomorrow after management talks with analysts and some clarification - we had a similar drop once in Thoratec (THOR) after hours on a product recall but by the next morning it was down 10% instead of 50%. Since the whole concept of Sequenom is based on the veracity of the test results; this throws a lot of issues on the table. Sequenom reported earnings as well tonight but it's a non issue for this type of company.
Here is the news and YET again, "the stock" (via chart) seems to know before the rest of us... I wonder how that always seems to be the case. Rhetorical comment. I think other than Morgan Stanley (MS) this was the only other long position we held with such a bad condition... I was thinking we finally formed a nice double bottom with early April lows - thankfully I did not pile in. Still going to sting - market gods not kind of late.
Per Sequenom
- ....the expected launch of its SEQureDx™ Down syndrome test is delayed, due to the discovery by company officials of employee mishandling of R&D test data and results. Accordingly the company is no longer relying on the previously announced R&D test data and results.
- SEQUENOM has not changed its plans to develop in parallel its RNA- and DNA-based methods for the Down syndrome test and will endeavor to have a validated test in the fourth quarter of 2009.
- Under the circumstances, and as supported by key clinical opinion leaders, the company now intends to launch the Down syndrome test upon publication in a peer-reviewed journal of the results from the on-going large, independent clinical studies, which are designed to be practice-changing for Down syndrome testing.
- The company’s board of directors has formed a special committee of independent directors to oversee an independent investigation of the employees’ activity related to the test data and results. The committee has engaged independent counsel to assist the committee in the conduct of the investigation.
- Although the company is not aware of any potentially inappropriate activity related to the reported results of its other tests under development, the company is currently reviewing the data for all tests. As a result of this ongoing review the Rhesus D, Cystic Fibrosis and Fetalxy tests are now anticipated to begin launching in the third quarter of this year.
- The company believes that its Down syndrome program has suffered a temporary setback but that the SEQureDx technology is scientifically and technically sound. The company intends to take every possible action to make up lost ground.
- Today’s announcement regarding the company’s SEQureDx Down syndrome R&D test data and results supersedes all previous announcements about such data and test, including its press releases dated June 4, 2008, September 23, 2008, December 1, 2008, January 28, 2009 and February 3, 2009.
- SEQUENOM has scheduled a conference call for 2:00 p.m. Pacific time today at which Harry Stylli, PhD, SEQUENOM President and Chief Executive Officer, will discuss this announcement and along with other company officials will present information on the company’s operating results for the first quarter of fiscal 2009.
EDIT 5:10 PM: There appears to be an analyst who initiated the stock with a buy this morning. Ouch.
Long/Short Sequenom in fund - long Thoratec in fund; no personal position
7 comments:
I was long this, had averaged down to the point where I actually was profitable as of yesterday, and then this crap hits the fan. The trader in me wants to scoop up cheap shares, but the investor in me wants to bumrush management with a 2x4.
A bombshell indeed.
So, if you don't own this right now, what do you think about buying with it around $5? It would seem that putting in a limit order for tomorrow AM might be a good prospect. Who knows, it might even get down to $4.
I couldnt help dipping my toe in at $5. Getting burned already, but until they fail a trial, this seems like a massive overreaction (assuming this was an isolated incident).
Meh, we'll see tomorrow morning, I am targeting $7-9ish, based on the risk premium. Product seems intact as far as I can see.
I just bought a first batch. May be a long-term investment. But then I once literally watched it take off and did not have the courage to buy.
Sort of a casino chip right now (well what isn't nowadays) - it's either the buy of the year or some sort of massive scam. They have multiple tests out there, not just Downs and a portfolio of patents. So its not really about are these tests there; its about how effective they are.
I will listen to the conference call tonight but judging from after hours people were not pleased.
I cannot imagine 1 employee in isolation could "fix" the returns - it seems impossible. And why would that one employee do it other than some stock options he wanted to cash out on etc. You'd think there would be checking and double checking and it would take multiple people to actually pull something off if indeed it was a scam of some sort. But without further detail it is speculation.
i know this is one of your faves, yikes man... seems like a typical live-hand-grenade-biotech reaction.
but if you believe in this, its a great opportunity
i havent done my DD, but there is that unfilled gap down near $8......
if there is a positive to this story, its that they were upfront and copped to the "issue"...prob could have covered it up just as easy.....
was my second largest position; am major bummed. shares bought between $14 and $15. didn't get out today as it swerved downward--
fyi, re: the cc, the ceo couldn't (wouldn't) reveal any details as they are subject to an independent investigation board/confidentiality. Mark: apparently it wasn't ONE individual ... there were FOUR "offenders" ... all previous test data has been invalidated... don't know who was more frustrated--me or the analysts on the call.
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