By Monica Heger
This story was originally published Nov. 3.
Just weeks after the October launch of its noninvasive sequencing-based trisomy 21 test, Sequenom has already received its first samples for the test and has also been reimbursed from some payors, officials said this week.
"We're in the process right now with our first round of payors," said Bill Welch, Sequenom's senior vice president of diagnostics, during a conference call to discuss the company's third-quarter earnings. While it is still early to say what portion of the test will be reimbursed, so far "it's what we expected," he said.
Sequenom did not disclose the amount that it has been reimbursed for the test. Previously, the company said that it expected insured patients to pay no more than $235, while uninsured patients would pay $1,900 (CSN 10/19/2011).
Additionally, the company said it plans to introduce improvements to the test in terms of sample collection, sample prep, and automation by the second half of 2012. It also plans to expand its sales and marketing activities beyond the 20 metropolitan areas it identified when it launched the test in mid-October.
Company researchers have also submitted a paper to an undisclosed peer-reviewed journal validating the test for trisomy 13 and 18, but officials declined to comment on the results or an expected publication date.
Upon validation, the company plans to incorporate T13 and T18 diagnosis into its MaterniT21 test. Currently, the company reports those aneuplodies to the physician with the caveat that the results are not validated.
Additionally, the company is in the process of finalizing a lease for a facility in North Carolina that will provide additional capacity, but, the "earliest we expect it to be operational is the end of 2012," CEO Harry Hixson said.
As it has said before, the company is in discussions with the US Food and Drug Administration about protocols necessary to file a pre-market application to gain in vitro diagnostics certification, and Hixson added that the North Carolina facility may be used to launch an IVD version of MaterniT21.
The company is in the process of automating its sample-prep process, and Ron Lindsay, executive vice president of research and development, said that the company would not submit the pre-market application until it had optimized the sample-prep automation.
Having an alternate laboratory, said Hixson, would be beneficial for this process because "you could have the IVD test in [the North Carolina] lab, and the LDT test in the [CLIA-certified San Diego lab], to cover the conversion," he said.
Hixson said the company is working on a protocol for FDA approval. Its validation study published last month in Genetics of Medicine would not satisfy FDA requirements, he said, because "the FDA likes to approve the protocol before you start testing." In addition, a number of the samples in the T21 validation study came from outside the US.
Hixson said that the company would initially conduct a PMA study in the high-risk population, but said that the company has also been talking to the FDA about doing a smaller study in low-risk pregnancies because the agency has expressed some concern about "leakage" of the test into the low-risk population and "wants to know how it performs."
"We are still in discussions with the FDA about the design and protocols of these studies," he said.
Sequenom reported revenue of $13.6 million in the third quarter, up 16 percent from its year-ago revenues of $11.7 million. The company narrowed its net loss to $18.4 million, or $.19 per share, from $22.7 million, or $0.30 per share, for the same period in 2010.
Research and development expenses ballooned to $12.6 million from $1.3 million, primarily due to the expansion of its Center for Molecular Medicine laboratory and pre-launch development activities for its MaterniT21 test.
Third-quarter sales and marketing expenses also increased — to $8.3 million from $1.4 million in the prior-year period — due to the expansion of its sales force.
As of Sept. 30, the company's total cash, cash equivalents and investment securities were $101.2 million.
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