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SAN DIEGO, Calif. (

TheStreet

) --Some thoughts on

TST Recommends

Sequenom

(SQNM)

after last night's

sacking of top management

and the closing of its investigation into the data fabrication scandal of its prenatal genetic test for Down syndrome.

Sequenom shares tanked Monday night to around $3, so in the topsy-turvy logic of Wall Street, does this make the stock a buy now? It's not a preposterous idea if you believe that someone, somehow, will one day figure out how to make a prenatal genetic Down's syndrome test work right.

The company does have a solid portfolio of intellectual property and patents around prenatal genetic testing which is probably equal in value to the company's share price today. As long as Sequenom doesn't lose access to this intellectual property (not necessarily a guarantee), the company should be able to turn itself around, even if it takes a lot longer than expected.

At this point, the best hope for Sequenom may be a sale of the entire company. Diagnostic powerhouses like

Roche

,

Abbott Labs

(ABT) - Get Report

, or

Johnson & Johnson

(JNJ) - Get Report

could easily afford to gobble up Sequenom and then take their time to develop prenatal genetic tests correctly:

I don't see an easy road for Sequenom if the company decided to go it alone. Cash is not an immediate concern but it will be in about a year, and I have a hard time envisioning a scenario by which investors willingly finance this company without a clear understanding of what happened last April and more visibility into what lies ahead.

The firings of CEO Harry Stylli and research and development chief Elizabeth Dragon, among others, was a much-needed move by Sequenom's board of directors in order to begin cleaning up this mess.

Sequenom reiterated in strong, simple terms Monday night that the old data that the company once claimed validated its Down syndrome test cannot be relied upon any longer.

Harry Hixson, Sequenom's chairman and now interim CEO, acknowledged Monday night that the internal investigation uncovered "inadequately substantiated claims" and "inconsistencies in errors" in the Down syndrome test data.

"As a result of deficiencies in our disclosure controls and procedures in a number of instances flawed test data and results were reported to the public. I must emphasize that none of the company's previously announced test results and data for our T21

Down syndrome tests should be relied upon for any purpose," he said.

Sequenom still will not tell investors or the public what happened. That's frustrating. How can investors regain any confidence in Sequenom without knowing what happened?

The most worrisome comment from last night's conference call, for me, came in response to a question about whether or not Sequenom was confident in its ability to turn its technology into a commercialized test.

"I think in terms of the T21

Down syndrome test it -- the challenge is whether there is sufficient RNA or DNA on a broad basis to commercialize this test, and we have been working very actively since our announcement in April to continue to validate and improve the technology. I think as yet we are not certain as to when we will be able to declare victory in that area," said Hixson.

Wow! The entire basis of Sequenom's business hinged on the ability to collect snippets of a fetus' genetic information -- whether that be RNA or DNA -- floating in the mother's blood, and then separate out and analyze that genetic material to determine whether the fetus had Down syndrome, or later, any other of a number of genetic disorders.

This technology has been proven to work in theory and in any number of scientific publications. And up until April, we all thought Sequenom had figured out a way to turn this science into an actual genetic test ready for commercialization.

Monday, however, the company admitted that it may never be successful.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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