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Helicos Downgraded by Leerink Swann

NEW YORK (GenomeWeb News) – Shares of Helicos BioSciences were downgraded today to "market perform" from "outperform" by Leerink Swann analyst Isaac Ro.

The analyst said that the stock was lowered in consideration of Helicos' "near-term funding challenges."

Helicos recently reported first-quarter revenues of $1.2 million and recorded product sales for the first time, which came from the sale of one instrument that was shipped in 2008 and the sale of reagents to customers. The firm finished the quarter with $13.9 million in cash.

Ro noted that Helicos is burning around $2 million in cash per month, and he expects the firm will need to raise additional funds by the end of the year. "Given the uncertainty in broader capital markets, we see little upside for [Helicos] shares at this time," he wrote.

However, Ro also said that Helicos has been making improvements to its next-generation sequencing technology, and it could benefit later this year and next year from the National Institutes of Health's stimulus funding.

"With DNA copy number variation, chromatin immunoprecipitation-sequencing, and small RNA applications all now feasible, we think [Helicos'] appeal is expanding to a wider audience of potential users," Ro said in the note.

In early Tuesday trade on the Nasdaq, Helicos' shares were up 1 percent at $.52 per share.

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