NEW YORK (AP) -- In a story May 13 about Sequenom Inc., The Associated Press erroneously reported that Sequenom's MaterniT21 test was cleared by the Food and Drug Administration before its launch in 2011. Diagnostic tests that are made and sold by a single lab, as MaterniT21 is, aren't required to be approved by the FDA.
A corrected version of the story is below:
Sequenom shares advance as analyst lifts rating
Sequenom keeps rising as analyst upgrades stock on expanded coverage for Down syndrome test
NEW YORK (AP) -- Shares of Sequenom Inc. extended their recent gains Monday after a Credit Suisse analyst upgraded the stock, citing expanded insurance coverage for its MaterniT21 Plus Down syndrome test.
THE SPARK: Analyst Vamil Divan upgraded the shares to "Neutral" from "Underperform" and raised his price target to $4.50 per share from $4. He said testing volumes for MaterniT21 are strong and improving, and the company's new agreement with insurer Blue Cross and Blue Shield expands access to the test and reduces the risks to Sequenom's stock.
Divan said Sequenom will face more competition and will lose market share as newer tests are approved, but the market for Down syndrome testing is large enough to accommodate several major players.
THE BIG PICTURE: MaterniT21 Plus is a blood test intended for women who are at high risk for a Down syndrome pregnancy. Sequenom says the test can detect the chromosomal anomaly that causes Down syndrome as early as 10 weeks into a pregnancy. The test also looks for two other chromosomal disorders.
The company launched the test in 2011, and Sequenom expects to run more than 150,000 tests in 2013.
The company reported its first-quarter results Thursday and announced a five-year agreement that allows Blue Cross Blue Shield companies to offer the test. Sequenom said the Blue Cross and Blue Shield plans insure more than 100 million people. As of Thursday it had reached agreements with Blue Cross and Blue Shield plans covering about 24 million people.
The San Diego company said more than 70 million people have insurance coverage for MaterniT21. It wants to expand that coverage to 120 million people by the end of 2013.
Competitor Ariosa Diagnostics sells a Down syndrome blood test called Harmony, and early this year genetic analysis company Illumina Inc. bought privately held Verinata Health, a company that makes prenatal tests for Down syndrome and other conditions that involve missing or extra copies of chromosomes.
SHARE ACTION: Shares of Sequenom gained 23 cents, or 5.7 percent, to $4.27 in afternoon trading. The stock jumped 13.2 percent on Friday.