Piper Jaffray Reiterates Overweight Rating on Sequenom (SQNM)

Piper Jaffray is out with a research report this morning, where it reiterates its Overweight rating on Sequenom ILMN; it has an $8.50 price target on the stock, up from $8.00. The Piper Jaffray analysts cited a recent publication of Dr. Dennis Lo's study of 753 pregnant women at high risk for trisomy 21 (i.e. Down Syndrome). Encouragingly, Dr. Lo's study showed strong performance of the multiplexed massively parallel sequencing assay, with the 2-plex version of the assay delivering 100% sensitivity and 97.9% specificity, in line with expectations as well as previously released internally generated data. Importantly, the analysts noted that the results as supportive of using the assay as a screening test in the high-risk pregnancy population. As for valuation, the analysts remarked, “We are maintaining our 8.2x multiple FY13 EV/Rev, but lowering our discount rate from 25% to 15% reflecting the lowered clinical risk, in our opinion.”