WEDBUSH Checks suggest SQNM was very aggressive in New York in September, possibly taking some share. Reimbursement appears $800/test
No impact to near term fundamentals as a result of the summary judgment.
As a reminder, the ongoing IP disputes have not changed physician behavior or
impacted commercial operations for any of the four players and the latest summary
judgment only allows Ariosa easier freedom to operate.
• Summary judgment will be appealed to Federal Circuit court where we have
seen reversals. We expect SQNM to the appeal ruling and we believe final
resolution versus Ariosa won’t be for another 12 months.
• SQNM maintains the upper hand with “massively parallel” sequencing
patents where the key hearing with USPTO is taking place in February.
• Checks suggest SQNM was very aggressive in New York in September,
possibly taking some share. Reimbursement appears $800/test bearish view.
• CA prenatal screening inclusion of NIPT supports 2014 growth and may help
with reimbursement. CA announced today that tests (from all players) will be
offered as part of the state’s screening program. This represents an incremental
25k tests in 2014 which would represent a 6% tailwind for the market in our view.
This may help to drive wider spread use and improve reimbursement.