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Sequenom Says Competitors Will Have to License IP for Noninvasive T21 Detection Tests

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By Monica Heger

As Sequenom gears up for the launch of its sequencing-based trisomy 21 diagnostic by early next year, it remains confident in its intellectual property and its likelihood of gaining reimbursement for the test.

Sequenom officials said that a patent the company holds for prenatal diagnosis via maternal blood will prevent competitors from launching similar tests unless they license the technology or come to some other agreement with the company.

The patent in question, US Patent No. 6,258,540 titled "Non-invasive prenatal diagnosis," is held by Dennis Lo of the Chinese University of Hong Kong and has been licensed to Sequenom. The patent describes a method for noninvasively detecting fetal DNA from maternal plasma and is valid through 2018.

Other companies, such as Verinata Health and Life Codexx, are also developing tests to diagnose trisomy 21 by detecting fetal DNA from maternal plasma (CSN 5/4/2011 and 4/19/2011). These companies are also targeting a fourth-quarter 2011 or first-quarter 2012 launch for their tests, all of which will run on the Illumina HiSeq 2000.

However, Marcy Graham, Sequenom's senior director of investor relations, told Clinical Sequencing News that if another company "wanted to offer a trisomy 21 [laboratory-developed test], they would need to come through us" to license the technology.

In May, Sequenom CEO Harry Hixson said during the company's first-quarter earnings call that Verinata's test infringes the '540 patent, though he did not comment on the LifeCodexx test. "We feel very confident about the strength of that patent. It's an issued patent in the US and in Europe, and we think it's very solid IP," he said at the time (CSN 5/10/2011).

Furthermore, Oppenheimer analyst David Ferreiro wrote in a recent research note based on a visit with the company that "management believes the in-licensed '540 patent, which extends into 2018, will block all non-invasive cell-free DNA-based approaches."

Ferreiro also wrote that Sequenom has targeted 28 payors regarding reimbursement of the test, 25 of whom had responded, and that the payors have been receptive to the data.

Graham did not confirm Ferreiro's specific numbers, but said that the company is "feeling positive about the relationships it is building with payors."

She added that the company expects the price of the test to be comparable to amniocentesis, which runs between $1,500 and $3,000 per test.

Aside from a trisomy 21 test, Sequenom has indicated that its technology could have the ability to detect other aneuploidies as well. While it has not said whether it would launch a test for these other disorders, the company's longtime collaborator Dennis Lo recently published the results of a study for diagnosing trisomy 13 and 18 (CSN 7/6/2011).

Graham said that the company has not yet discussed the possibility of licensing this technology from Lo.

Sequenom is also in discussions with the US Food and Drug Administration about filing for premarket approval of the T21 test. Graham said that those discussions are ongoing, but parameters for a clinical trial design have not yet been defined.

"We don't know what the expectations will be," she said.

In his report, Ferreiro noted that the company plans to have 20 sales representatives for the T21 test on staff by the end of August, which suggests the company is preparing for a launch at the "early end" of its fourth-quarter 2011/first-quarter 2012 guidance for the lab-developed version of the test.

In addition, he estimated the initial market for trisomy 21 diagnosis to be around $1 billion per year, based on an estimate of around 600,000 high-risk births per year. That number, he added, could increase substantially in the long term if the test is performed for low-risk births, which number upwards of 3.5 million per year.

Ferreiro estimated Sequenom's second-quarter revenue at $14.36 million, which would be a nearly 26 percent increase over $11.41 million in the second quarter of 2010.

The company plans to report its second-quarter earnings Aug. 4.


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

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