Sequenom Discloses Test Data Mishandled; Shares Plunge

4/29/09Follow @bvbigelow

Sequenom’s shares plunged nearly 70 percent in after-hours trading today after the San Diego biotech said it was postponing its launch of a Down syndrome test due to “mishandling” of R&D test data. The price of Sequenom (NASDAQ: SQNM) shares fell from $14.91 at the close to $4.69 at 7:36 p.m. ET.

Sequenom had planned to launch its genetic test, called SEQureDx, in June. In a statement released after the market closed, Sequenom described the delayed launch as a “temporary setback” and said the SEQureDx technology “is scientifically and technically sound.” SEQureDx is intended to test a pregnant mother’s blood sample.

But the company did not explain how research and development data for SEQureDx was mishandled. “All I can really say is that during a management review of the data we discovered inconsistencies, which led to the discovery of mishandling of data,” Sequenom spokesman Ian Clements said late today.

The disclosure prompted the board to form a special committee of independent directors to oversee an investigation “of the employees’ activity related to the test data and results.” Sequenom said the incident also has prompted a review of data supporting its Cystic Fibrosis, Fetalxy, and Rhesus D tests, which Clements said also is expected to push back the release of those tests. “We don’t currently believe that data is affected, but we don’t want to take any risks,” Clements said. As a result, those tests are now anticipated to begin launching in the third quarter of this year.

Sequenom said the questioned data has not changed its plans for using parallel RNA- and DNA-based methods to test for Down syndrome, and the company will endeavor to have a validated test completed by the end of this year.

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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