NEW YORK (GenomeWeb News) – Sequenom said after the close of the market on Monday that its board has authorized a "review of potential strategic alternatives" for its Genetic Analysis segment.
The San Diego-based firm has hired Jefferies as a financial advisor and will evaluate "a full range of potential strategic alternatives" for the Genetic Analysis business. It has not decided to enter into any transaction at this point, and "there can be no assurance that Sequenom will enter into such a transaction in the future," it said in a statement.
The company provided no further details.
Sequenom's Genetic Analysis business offers its MassArray System for measuring genetic target material and variations, as well as its iPlex assay for analyzing multiplex SNPs and somatic mutations.
It excludes its MaterniT21 Plus non-invasive prenatal diagnostic testing business, however.
Less than a week ago, Sequenom announced the launch of its certified service program for the MassArray System.
In July, the company said that genetic analysis product sales and services inched up 2 percent year over year to $10.3 million in the second quarter, while diagnostic service revenues rose dramatically to $24.5 million from $8.1 million.
Since announcing its second quarter earnings results, which fell short of analyst expectations, Sequenom's stock has been hammered. The company blamed the softer-than-expected results on a change in molecular diagnostic billing and payment codes that delayed receipt of payments on testing services that had been provided, and on a conference call following the release of the results Sequenom Chairman and CEO Harry Hixson said that the firm would take actions to reduce costs "and improve our overall financial performance."
In August, it said it would lay off 75 employees as part of a reorganization.
In a research note published today, Piper Jaffray analyst William Quirk called the strategic review a "solid move."
"We suspect a sale of its Genetic Analysis business would allow Sequenom to further rationalize its operational footprint and provide additional cash to fund its ongoing push into the NIPT market," he said.
He added that he believes the Genetic Analysis business would fit with Becton Dickinson's Biosciences portfolio or "could serve as an entry for PerkinElmer into the clinical mass spectrometry market, although it is unclear what the outcome of this process will ultimately be."
He maintained an Overweight rating on the company with a $6.50 price target.
In Tuesday morning trading on the Nasdaq, shares of Sequenom were down 5 percent at $2.62.