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Sequenom Eyes Low-Risk NIPT Market; Inks Contract with Aetna

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Sequenom said this week that it is making progress in obtaining reimbursement for its noninvasive prenatal fetal aneuploidy test, MaterniT21 Plus. It recently signed a contract with Aetna and is also making progress obtaining reimbursement from Medicaid.

Additionally, as the company previously said, it is developing a lower cost test on an alternative platform in order to target low-risk pregnancies and the international market. The company is aiming to finish development of that test by the end of the year.

During a conference call discussing its 2013 fourth quarter and full-year results, President and CEO Harry Hixson said that the company's fourth quarter revenues were $45.1 million, driven by sales of its MaterniT21 Plus test. Diagnostics services revenue, which includes MaterniT21 Plus, grew to $32.7 million in Q4 2013, from $21.1 million in Q4 2012.

Sequenom Biosciences, the other portion of the company's business, brought in $12.4 million, on par with the year-ago fourth quarter. The firm is continuing to explore "strategic alternatives" for that business segment, and Hixson said he would provide an update on the process next quarter.

For additional details on Sequenom's financials, see GenomeWeb Daily News' coverage.

Reimbursement

Hixson said that Sequenom now has 113 million lives under contract, which includes lives covered by Blue Cross Blue Shield affiliates under a general agreement it struck with the BCBS Association last year, a recent agreement with Aetna, and 21 million lives being covered by 12 state Medicaid programs.

Additionally, he said the firm expects to "execute multiple additional agreements in the coming months."

Sequenom entered into a five-year agreement with the Blue Cross Blue Shield Association last year to offer its testing services to the independent BCBS companies, which includes 38 affiliates covering around 100 million lives.

During this week's call, Hixson said that the firm has now established contracts with about half of those affiliates.

Last year, the Centers for Medicaid and Medicare Services implemented changes to the CPT codes, which resulted in difficulties obtaining reimbursement, especially from Medicaid. As such, in Q2 2013, the company implemented a program to reduce the volume of uncompensated Medicaid tests, while working with the states to obtain reimbursement. During Q4 2013, the percentage of Medicaid tests dropped to 14 percent from 21 percent in Q3 and 26 percent in Q2.

Now, however, there are 12 state Medicaid programs reimbursing for MaterniT21 Plus, representing 21 million lives, and the company expects Medicaid volumes to begin to pick back up, Hixson said.

Overall, the "success rate for appeals has improved," said CFO Paul Maier, and the firm has begun receiving "catch up payments," including $3.8 million from one payor for tests performed in prior quarters.

On average, Maier said, commercial and governmental payors are reimbursing $1,200 per test, a decline of about 12 percent during the year due to "competitive pricing pressures, additional contracting, and the effect of the coding change."

Expanding to low-risk, international markets

Moving forward, Sequenom plans to expand its reach by developing an alternative test to MaterniT21 Plus that will be lower-cost and will run on an alternative platform. Currently, it uses whole-genome shotgun sequencing on Illumina's HiSeq 2000.

According to Hixson, the whole-genome shotgun strategy has enabled the firm to broaden its testing capabilities from trisomies 21, 18, and 13, to sex chromosome aneuploidies as well as sub-chromosomal deletions and duplications. However, a lower-cost test may include "potentially less content."

"This new test will be useful for select cost-sensitive international and domestic markets where broader access to an NIPT is of paramount importance," Hixson said. He did not specify which technology platform such a test would be launched on or whether the firm would switch from a whole-genome shotgun sequencing approach to a targeted sequencing strategy.

Hixson added that he does not believe third-party payors will reimburse for testing in low- or average-risk pregnancies until professional organizations established guidelines for such testing. Additionally, screening for fetal aneuploidies in lower risk pregnancies will have to be cost competitive with serum screening, which can cost between $100 and $200. In the high-risk market, by contrast, NIPT is primarily replacing more expensive invasive procedures like amniocentesis or chorionic villus sampling, which can cost upwards of $1,500 and have risks associated with them.

"I’m sure there is a huge demand [in the low-risk market], but the question is who is going to pay for it, if and when will they start paying for it, and what price will they pay for it?" Hixson said.

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