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Sequenom Performs More than 1,000 T21 Tests, Reports 23 Percent Revenue Increase for 2011


By Julia Karow

This story was originally published Jan 13.

Sequenom has reported results for more than 1,000 MaterniT21 prenatal Down syndrome tests since it launched it last fall, a company official said last week.

The company also reported a 23 percent increase in preliminary revenue for 2011, and expects to raise additional capital, probably in the first half of this year.

Sequenom released its noninvasive prenatal MaterniT21 test, which runs on an Illumina HiSeq sequencer, in October as a laboratory-developed test after publishing a clinical validation study in a scientific journal (CSN 10/19/2011).

Its target market is pregnant women over the age of 35 as well as other high-risk pregnancies for trisomy 21, an estimated 750,000 annually in the US. The goal is to bill for at least 25,000 T21 tests this year, said Harry Hixson, Sequenom's chairman and CEO. He spoke at the JP Morgan Healthcare Conference in San Francisco last week, which was webcast.

So far, the company has reported results for more than 1,000 T21 tests, which would add up to 9,000 on an annualized basis, "but it's too early to tell what our adoption curve is," he said.

To increase adoption of this and another test for age-related macular degeneration, the company plans to more than double its sales force from a current 20 to more than 50. After recently gaining approval to market the test in New York State, it plans to add three sales reps in that state alone, Hixson said. Its focus so far has been on about 20 metropolitan areas, and about 7,500 maternal fetal medicine specialists and OB/GYNs.

At the moment, Sequenom offers the test as an out-of-network-provider, but its goal is to contract with at least two national payors for reimbursement of the test this year, Hixson said. About 70 percent of women in its target market are currently covered by private payors, he said, about a quarter by Medicaid, and about 8 percent are self-paying.

He said the company expects insurers to pay "some range from list price down to some significant discount," and plans to appeal any discounts. "This is exactly what we expected when the test entered the market, and the same sort of experience that other companies have had dealing with private payors," he said.

The company said previously that it will bill insurance companies $2,700, and uninsured patients $1,900.

Hixson cautioned that it will be difficult for Sequenom to track revenues and costs of the test, as insurers usually only pay several months after a test has been done and its costs have been booked. The company plans to report the number of tests it performs on a quarterly basis.

Regarding the cost of goods for the test — at launch, about $500 to $600 — he said that the sequencing component "is only a small part of the overall cost, and any competitor will have to deal with these other items, which are quite expensive as well." Other costs include, for example, logistics and shipping.

As previously stated, Sequenom plans to reduce the cost of the test by 30 percent to 40 percent over the next year to 18 months, through increased multiplexing; improvements to the Illumina HiSeq instrument, reagents, and flow cells; automation of the sample preparation; and increased testing volume, which will decrease the depreciation and overhead costs per test.

The test currently has a turnaround time of less than eight days and reports not only trisomy 21, but also positive results for trisomies 13 and 18. Last month, Sequenom had a study describing the use of the test for T13 and T18 accepted by a scientific journal (CSN 12/21/2011), and Hixson said that paper will be available online within four to six weeks.

Among the test results reported in 2011, there have been 24 trisomies 21, two trisomies 18, and no trisomy 13, Hixson said. While negative results are reported by fax or e-mail, Sequenom's chief medical officer conveys all positive results by phone, he added.

Sequenom also plans to obtain pre-market approval for an IVD version of the T21 test from the US Food and Drug Administration. In December, it submitted a plan for a clinical study of the IVD test to the agency, he said, and expects to have further discussions with the FDA this quarter.

By the end of this year, the company plans to have a third CLIA laboratory in North Carolina in place that it may use to run the T21 test, which is currently performed at its CLIA lab in San Diego.

Sequenom is currently embroiled in a number of patent lawsuits in the US: two competitors, Aria Diagnostics and Natera, are seeking judicial declarations that their prenatal noninvasive tests don't infringe Sequenom's US Patent No. 6,258,540, "Non-invasive prenatal diagnosis," which covers circulating cell free fetal nucleic acid as an analyte (CSN 12/21/2011 and 1/11/2012).

While Hixson did not comment on these suits in his presentation, he reiterated that the '540 patent, assigned to collaborator Dennis Lo, is the company's "most critical" IP.

In Europe, the patent faced several objections from competitors, he said, but "all of those objections have been rejected and this patent now stands issued free and clear in Europe."

Last summer, Sequenom licensed this and another patent to LifeCodexx in Germany (CSN 8/17/2011), and Hixson said the company expects to establish additional licenses in Europe this year.

It also expects the US patent office to issue another patent from Dennis Lo, on shotgun or random sequencing, sometime this year. Overall, Sequenom's patent portfolio comprises 500 issued and allowed patents, and more than 330 pending patent applications, he said.

Have topics you'd like to see covered in Clinical Sequencing News? Contact the editor at jkarow [at] genomeweb [.] com.

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