NEW YORK (GenomeWeb News) – Investment bank Leerink Swann has dropped coverage of Helicos BioSciences, citing both long-term and short-term challenges the firm faces in gaining market share.
Analyst Isaac Ro said in a research note published Friday that although the firm's flagship HeliScope single-molecule sequencer has shown improvement, "time is running out." He estimated that Helicos has placed around 14 of its instruments since its launch a little over two years ago.
He said that although Helicos deserves credit for being the only commercial provider of single-molecule sequencing technology on the market today, future competitors are also "struggling with their own SMS-based platforms, which we think underscores the high cost and long development times required to achieve such a feat."
"We think HeliScope is ultimately limited to a very small target audience at a price point of $800k that remains prohibitive to most customers," Ro wrote.
He also cited an increasingly competitive market, with new products recently launched by Illumina and Life Technologies, as well as impending competition from startups including Pacific Biosciences and Ion Torrent.
"We think [Helicos]' technology faces long-term competitive challenges," said Ro. "We also believe an acquisition of the company, while possible, is unlikely."
Prior to dropping coverage, Leerink Swann had a "market perform" rating on Helicos' stock, with a valuation of $1. It said that this rating "should not be relied upon" now.
Helicos has yet to report its fourth-quarter and fiscal-year 2009 financial results. Following the release of its Q3 2009 results, the firm said that as of Nov. 9, 2009, it held cash and cash equivalents of $8.4 million. It also said that it had ruled out a potential sale of the company for the time being.