NEW YORK (GenomeWeb) – Sequenom said today that its second-half 2015 revenues will be lower than previously anticipated and has accordingly dropped its full-year revenue guidance to a range of 15 percent to 23 percent lower than its previous estimate of $150 million to $170 million.
The firm expects second-half 2015 revenues to be in the range of $57 million to $61 million and full-year revenues to be between $127 million and $131 million.
The firm said in a statement that increased competition as well as price compression in the noninvasive prenatal testing market affected its forecasted revenues.
Interim President and CEO Dirk van den Boom called 2015 a "pivotal year," but also a "year of transition," for Sequenom.
In a research note following the announcement, William Quirk, a senior analyst with Piper Jaffray, wrote that while Sequenom's lower guidance was not a huge surprise — given that the Street's revenue estimate was already below the firm's previous forecast and that new CEOs frequently lower forecasts — the magnitude of the cut was unexpected.
As a result, the investment bank updated its second-half revenue forecast to $60.4 million, down from $69.5 million, but near the upper end of Sequenom's range.
Analysts’ average full-year revenue estimate is $141.1 million.
"Clearly the guidance update is disappointing, although we have frequently seen new CEOs lower numbers early in their tenure," Quirk wrote. "We continue to remain cautious on Sequenom with the patent pool transition impacting the top-line," he added.
He estimated that the patent pool alliance Sequenom entered into with Illumina has caused a 14 percent revenue decline year-over-year, since it enables test developers to run their own NIPTs by licensing the technology.
In a statement, van den Boom said that Sequenom would provide additional details on its reproductive health business and progress in the oncology space at its analyst day on Sept. 28. "In parallel, we are focused on increasing our organizational effectiveness and operational efficiency," he said.
Sequenom plans to report its third quarter financial results on Nov 4.