Sequenom Discloses Test Data Mishandled; Shares Plunge

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: [[ticker: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.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.