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Marty Chilberg
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Marty Chilberg is a seasoned financial professional with over 30 years of executive leadership, board, consulting and advisory experience.  He began his career as a certified public accountant (CPA). He moved to Silicon Valley in 1981 to begin his career in the software industry, working for... More
  • Sequenom: Q4-13 Supplemental Info 4 comments
    Mar 6, 2014 11:42 AM | about stocks: SQNM
    • MaterniT21 average reimbursement level was $1,200 in 2013. This was down 12% from 2012. This drop was caused by mix of payers, new contracts and competition. Management expects that pricing will continue to decline based upon the same factors as the market gets further penetrated.
    • Since the launch of MaterniT21, invasive procedures have declined by 50%.
    • January MaterniT21 test levels were a record high. The 3rd week in February was a new record for accessions. Note that with the shut down of most "free tests" for nonpayers and improved in-quarter reimbursement levels, this should bode well for Q1-14 diagnostic revenues.
    • HerediT CF continues to contribute nicely to revenues. New carrier screens were launched recently for Ashkenazi Jewish Panel, SMA and Fragile X. Also the company partnered with CombiMatrix to provide NextView as an invasive test for NIPT positive test patients.
    • Management expressed heightened confidence for partial conversion to accrual basis revenue recognition this year.
    • License fees represented 14% of diagnostic COGS in CY-13 versus 15% in the prior year.
    • Medicaid represented 5% of diagnostic revenues in CY-13 versus 14% in the prior year. This trend is expected to reverse going forward now that 12 states have established codes, pricing and are reimbursing under contracts. Note that none of these 12 states reimbursed for old tests in Q4-13. The company cannot predict whether or when these older tests will be reimbursed.
    • Sequenom reported 570 employees per the 10k. They currently have 16 open jobs per their website.
    • Analyst revenue forecast for C14 is $215m (33% growth). The current enterprise value (NYSE:EV) is 1.66x this forward revenue estimate.

    Disclosure: I am long SQNM.

    Stocks: SQNM
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Comments (4)
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  • Jroms
    , contributor
    Comments (43) | Send Message
     
    Thank you for the breakdown. Well done.
    6 Mar 2014, 01:02 PM Reply Like
  • rthies99
    , contributor
    Comments (4) | Send Message
     
    Nice work Marty. Any comments on the new management team?
    7 Mar 2014, 09:58 AM Reply Like
  • Marty Chilberg
    , contributor
    Comments (577) | Send Message
     
    Author’s reply » Thanks rthies99. I wasn't surprised by the lack of any market reaction to the news. Harry Hixon is 75 and Paul Maier is 66. Both execs were brought in following the test handling debacle several years ago and with those credibility issues long-removed, their retirement isn't particularly surprising.

     

    William Welch was promoted a little over a year ago to President and COO. He was viewed as the heir apparent to Mr Hixon

     

    Carolyn Beaver was hired as Chief Accounting Officer in 2012. Having 2 experienced senior executives in financial roles is somewhat unusual for such a small company. In retrospect, it seems reasonable to assume she was hired with a short term goal of firming up the accounting function with an eye toward replacing Paul.

     

    Combined with the promotion of Dirk to Chief Scientist, these moves will largely mean continuity. Getting younger is a positive. Whether this will enable any change in strategy is yet to be seen.
    7 Mar 2014, 10:27 AM Reply Like
  • Insiderz
    , contributor
    Comments (100) | Send Message
     
    http://bit.ly/1dzcFl7
    7 Mar 2014, 10:43 AM Reply Like
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