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Sequenom Faces Class Action Lawsuits

NEW YORK (GenomeWeb News) – Sequenom is facing class action lawsuits brought on behalf of shareholders following the firm's announcement Wednesday that it would delay the launch of its SEQureDx Down syndrome test until the third quarter of this year after it discovered that company employees had mishandled R&D test data and results.

At least two law firms have said they have filed class action suits and others have said they have initiated an investigation into the firm for a possible suit on behalf of shareholders that have purchased shares in the company over the past roughly 11 months.

Sequenom had issued press releases four times between June 2008 and February 2009 disclosing positive interim results on the SEQureDx test. But on Wednesday, Sequenom President and CEO Harry Stylli said that the firm could no longer rely on that data for pursuing regulatory approval.

The firm has initiated its own investigation into the employees' activities related to the test data and results. It also has hired independent counsel to assist the committee in conducting the investigation.

"We are confident in the assay performance," Stylli said during a conference call. "It's fair to say that the high-level clinical performance that we've disclosed to you is questionable."

The firm's shares also have been downgraded by several investment banks to either hold or sell ratings.

Sequenom's shares fell 75 percent yesterday in the first full day of trading after the announcement. Its shares are up 16 percent at $4.20 in late morning trade on the Nasdaq today.