Sequenom Inc Could Have Standard Test For Down Syndrome

Sequenom Inc (NasdaqGM: SQNM) shares gained $1.67 or 21.8% Wednesday on news that the genetic analysis product manufacturer's prenatal test used to detect Down syndrome in a mother's blood was successful in 200 out of 200 samples with zero false positives in a recent study.

According to the company, "current testing options have a detection rate of between 70 percent and 90 percent, with false-positive rates as high as 5 percent." The company now plans to expand the sample size of the study by a few thousand participants and push for the process becoming the industry standard in detection.

Currently trading at $9.33, analysts agree that successful wider-scale testing should translate into a much higher share price going forward. Here's a sampling of recent analyst sentiment:

Oppenheimer and Co. - Kevin DeGeeter - Bullish - Outperform - 17.50 price target - Sentiment: if the results are repeated in the larger study, the SEQureDX test could become the front-line test in a market he values at between $1 billion and $1.5 billion.

Rodman & Renshaw - Elemer Piros - Bullish - Market Outperform - $13.50 price target - Sentiment: the Sequenom test could replace current methods that use several markers to obtain results.

Lehman Brothers - Charles Butler -Bulish - increased price target $1 to $12 - Sentiment: Test is a significant improvement over current testing procedures.

Although $9 per share is a far cry from many of the small cap ideas typically discussed on this site, the potential payoff here certainly warrants a closer look. In future editions we'll look deeper into Sequenom Inc and its future potential. We suggest that you do the same.