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UBS Upgrades Helicos' Stock, Lowers Revenue Forecast

This article has been updated to include additional information from the UBS research note.
NEW YORK (GenomeWeb News) – Investment bank UBS today upgraded its rating on Helicos BioSciences’ stock from “sell” to “neutral" and lowered its revenue forecast for the firm.
Following the firm’s 2007 third-quarter results in November, UBS had downgraded the stock to “sell.” Despite that downgrade, Helicos’ shares had hit a high of $18.60 on Jan. 16. Since then, the stock has fallen sharply, closing at $5.91 in Tuesday trade on the Nasdaq.
“Although we still have lingering concerns regarding [Helicos’] ability to execute and have lowered our sales forecasts, we upgrade to Neutral from Sell chiefly on valuation following the recent pull back” of the stock price, UBS analyst Derik De Bruin wrote in a research note.

UBS lowered its price target on Helicos’ stock to $6.50 per share from $10. It also lowered its 2008 revenue forecast for Helicos down to $8.4 million from an earlier estimate of $21.7 million and its 2009 revenue forecast to $35.4 million from $80.2 million. Helicos did not provide revenue guidance during its recent fiscal-year 2007 and fourth-quarter conference call.

The firm recently announced that Expression Analysis is the first customer for its Helicos Genetic Analysis System.
De Bruin said that he expects Helicos to ship 11 of the next-generation sequencing systems in 2008 versus his prior expectation of 20 systems.

“While we expect the company to ship more units to early access customers during 2008, we also believe that, given the HeliScope’s $1.35M price tag, significant customer validation will be needed to spur broad uptake, and these third-party data may not be available until late ’08 or early ’09.”

In late Wednesday afternoon trade, Helicos’ stock was up 1.4 percent at $5.99.