By Kirell Lakhman
Ever since Sequenom commenced its Great Cleansing in late September, company officials have been trying to assure the market that there’s still hope for its Downs syndrome prenatal-screening play.
Sequenom spokesman Ian Clements told me last month that the company’s plans to launch its trisomy 21 test, SEQureDx, ”have been set back,“ though he was generally upbeat about it.
A couple of weeks later, during Sequenom’s third-quarter conference call, interim-CEO Harry Hixson said “we believe that a non-invasive T21 test based on our technology will become commercially viable in the future.” Did you notice how Hixson did not to say whether such a test would be sold by Sequenom?
As one knowledgeable source told me recently, “The previously announced trial data [for the T21 assay] is toast” — referring to the “mishandled” data that caused the firm to fire its CEO and triggered a shareholder revolt and an investigation by the US Attorney’s office — “but enough people have used the technology that it’s hard to believe there’s nothing there.”
Considering the company’s horrendous missteps and the resulting plunge in share price (gaze at the center of this graph), one could be faulted for being bullish on SEQureDx.
Last week another industry observer has taken aim at the company. In an analyst note, Robert Boorstein, associate professor in the Department of Pathology at New York University School of Medicine, called the “enthusiasm” surrounding SEQureDx “historic but minimally supported,” and said “[e]ven in the absence of data retractions … problems in the rollout of the product should have been anticipated.” (He didn’t say why.)
Boorstein, who directs clinical pathology training at NYU, stressed that “[f]rom the historical perspective of claims for, and valuation of, a laboratory test, the Sequenom story is quite unique. A publicly traded company reached valuations of nearly $1 billion, in the absence of any peer reviewed clinical data.”
But he went on to say that “[t]he only reported data [supporting the test] was done by press release. … Details of what actually happened, if in fact there is any reasonable basis for a product, and where the process went awry, have not been made public.”
Boorstein added: “From my perspective as an outsider, whatever issues existed prior to April 30, 2009” — the date that Sequenom first publicly acknowledged that SEQureDx data had been “mishandled” — “have only been exacerbated. Presumably an institutional review board (IRB) overseeing a properly run clinical trial would want to see high quality peer reviewed data prior to permitting a trial to begin. Furthermore, in the absence of any data, there is no reason for anyone to assume a trial will show good results.”
Three trials are currently in the bullpen. During the earnings call, Hixson said Sequenom is sponsoring three “ongoing T21 studies,” and the “sample collections for R&D purposes in both the verification and validation studies are proceeding well. For these verification and validation studies, we are currently collecting samples, which will only be ultimately used when we have an assay that is ready for such studies.”
Shares in Sequenom this morning are trading down at $5.69, 42 percent below where they were the day before the Great Cleansing was announced. However, the stock has been able to claw back 18 percent of its value since reaching its intra-saga nadir of $2.76 on Oct. 30.
