Sequenom Meets With FBI, U.S. Attorney’s Office Investigators
Sequenom (NASDAQ: SQNM), the San Diego medical diagnostics company that disclosed earlier this year it had “mishandled data” from a clinical trial, has met with investigators from the FBI and U.S. Attorney’s office looking into the matter, according to a regulatory filing today.
The company previously acknowledged the Securities and Exchange Commission was investigating, so it was not immediately clear if the Justice Department’s involvement reflects a more serious turn in the case. San Diego FBI spokesman Darrell Foxworth and Deb Hartman, a spokeswoman for the U.S. Attorney in San Diego, had no immediate comment on the company’s disclosure.
San Diego-based Sequenom said it was contacted by the U.S. Attorney’s office and NASDAQ officials after it announced on Sept. 28 that it ousted five employees, including CEO Harry Stylli and R&D chief Elizabeth Dragon, and two others resigned, following an internal investigation into mishandling of data to support the company’s non-invasive prenatal test for Down Syndrome. Company officials have met with representatives from the FBI and U.S. Attorney’s office, and added “we intend to cooperate fully” with their investigations, according to the regulatory filing.
Each of the officers who were dismissed has denied wrongdoing. A special committee of the board that investigated the matter since April said in a statement last week their work “has raised serious concerns, resulting in a loss of confidence by the independent members of the company’s board of directors in the personnel involved.”
The company’s new leader Harry Hixson, told investors last week that he will cooperate with an investigation by the Securities and Exchange Commission. Members of the Sequenom special committee and independent counsel have met with staff from the SEC’s Enforcement unit, the company said today in a regulatory filing.
Shares of Sequenom have plummeted 46 percent to $3.08 a share since the company announced the results of its internal investigation, and the dismissal of executives.
The company hasn’t said in detail what really happened, but it has repeated that the public and investors should no longer rely on the company’s previous claims to have developed a noninvasive prenatal blood test that was 100 percent accurate at detecting Down Syndrome when compared with the standard, more invasive tests known as CVS and amniocentesis. The company essentially said that its data handling protocols weren’t good enough, and that certain employees failed to provide adequate supervision of the process, leading to errors and inconsistencies in the data released to the public.