A month after axing 12% of its workforce, diagnostics outfit Sequenom ($SQNM) said it's exploring options for its genetic analysis arm, a once-growing business on a protracted decline.
Sequenom said it is considering selling off what was once its banner segment, retaining Jefferies for financial advice along the way. The company now derives roughly three-quarters of its revenue from molecular diagnostics, but until 2012, genetic analysis services kept the doors open.
It's been a slow trip down since then, though, as genetic analysis has posted flat to declining revenue each quarter, and the division that grossed $43.2 million last year is on pace to come in about 9% lower in 2013.
Unfortunately for Sequenom, its fast-growing noninvasive prenatal test business offers only marginal comfort. While the company has had little trouble convincing customers to use its MaterniT21 test, it has struggled to collect revenue. Last quarter, Sequenom more than doubled its number of tests accessioned, but changes to billing codes from Centers for Medicare and Medicaid Services put the squeeze on its ability to actually get paid, CFO Paul Maier said.
Those same concerns led the company to cut 75 jobs in August, an effort to save $10 million this year.
Monday night's announcement that Sequenom would take a hard look at its analysis business sent the company's shares up about 12% to $2.81, but its price is still down more than 50% from its start-of-the-year peak of $5.23.
- read Sequenom's announcement