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Sequenom Sees Steady Growth of MaterniT21 Test Despite Competition

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Sequenom said this week that sales of its MaterniT21 test are continuing to grow despite the recent entry of two competitive tests on the market.

Speaking this week at the Jefferies Global Healthcare Conference in New York, CEO Harry Hixson said that as of the end of May, the accession rate for MaterniT21 was 60,000 tests per year.

Adoption is "increasing week by week," Hixson said, and "we are pleased with the uptake of the test." Additionally, the turnaround time is now one week, down from 10 days.

Recently, competitors Verinata Health and Ariosa Diagnostics launched their respective sequencing-based trisomy tests. Verinata's test, Verifi, is similar to MaterniT21 and screens for trisomy 21, 18, and 13, while Ariosa's Harmony Prenatal test is based on targeted sequencing and currently screens only for trisomy 21.

Ariosa's test has a list price of $795, dramatically lower than the $2,700 Sequenom bills insurance companies and the $1,900 it charges uninsured patients. Insured patients pay $235 out of pocket for MaterniT21.

Hixson said that Ariosa's price does not make sense. "The only cost reduction is in the sequencing," he said, but sample processing, library preparation, and data analysis should not be dramatically different between the two tests.

"We'll continue to compete on turnaround time, quality of results, and a fair and attractive price," he said.

In a research memo, William Blair analyst Peter Weinstein wrote that he anticipates that Sequenom will capture just over 50 percent of the market next year, which he said is "possibly conservative."

Moving forward, the company plans to increase its multiplexing capability from four samples to 12, which will boost capacity to 200,000 tests per year.

Reimbursement Update

Hixson said that Sequenom continues to pursue reimbursement contracts with national, regional, and local payors.

Recently, Coventry Health Care National Network terminated a coverage agreement with the company only a couple weeks after Sequenom announced the agreement (GWDN 5/18/2012). As a result, Hixson said Sequenom would no longer be announcing individual contracts, only the number of lives covered.

Currently, he said, it has over 20 million lives under contract as an in-network provider and "we're working to increase that on a daily basis."

As an out-of-network provider, the company takes on the burden of obtaining reimbursement, and Hixson said that the rate of reimbursement has ranged dramatically, sometimes receiving the amount expected, but sometimes receiving checks as low as $4.

As a result, Hixson said that the company has a very active appeals process and an initial payment is not the end of the negotiation process.

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