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Sequenom to Cut 20 Percent of Workforce, Divest North Carolina Lab

NEW YORK (GenomeWeb) – Sequenom announced today that it will eliminate approximately 20 percent of its workforce as part of an organizational restructuring designed to increase its focus on its core women's health business and reduce operating costs.

As part of the restructuring, Sequenom plans to divest its operations in Research Triangle Park, North Carolina, which consists of a clinical genomic laboratory for processing noninvasive prenatal and other reproductive health tests. The lab's operations will be consolidated into the company's San Diego headquarters throughout the first half of this year.

"In making the difficult decision to sell our North Carolina facility, we are working hard to find a buyer that may be able to employ some or all of our team, thereby minimizing the effect on our employees and their families," Sequenom CEO Dirk van den Boom said in a statement today.

Sequenom opened the RTP site in June 2013 primarily to support processing of its MaterniT21 Plus laboratory-developed test. Last May, the firm consolidated its lab operations in Grand Rapids, Michigan, to the North Carolina site.

Sequenom also said today that it plans to eliminate 110 of approximately 500 positions at the company. As a result, the company has increased its previously announced expected annual cost savings of more than $10 million to an annualized anticipated cost savings of more than $20 million in late 2016.

Sequenom added that it is planning to reduce both the cost of revenue and operating expenses, primarily in R&D and general and administrative functions; and it is seeking strategic partners for the commercialization of its liquid biopsy assay for the oncology market, a move that is expected to reduce the company's R&D spending in that area.

"We have successfully advanced our oncology liquid biopsy assay technology and created the most comprehensive circulating tumor DNA profiling assay, which has multiple applications," van den Boom said. "We believe this valuable asset can most effectively be advanced together with partners that have clinical expertise and a distribution presence in product markets relevant to these oncology assays."

In November, after the firm posted a 21 percent year-over-year decline in third quarter revenues due in part to accessioning fewer prenatal tests, van den Boom noted in a conference call that the company planned to shift its focus toward the average-risk NIPT market, and toward new products in reproductive health and oncology, including an anticipated launch this year of the liquid biopsy assay.

The company also noted at the time that uptake of the company's recently launched MaterniT Genome test — a next-generation sequencing-based noninvasive karyotyping test that screens for chromosomal abnormalities of greater than 7 megabases — had exceeded expectations.

Further commenting today on the planned restructuring, van den Boom said that Sequenom believes the changes will position it "to achieve higher levels of near-term performance while still allowing us to pursue our longer-term potential. We have the most comprehensive portfolio of products for noninvasive prenatal applications, a game-changing new product in our MaterniT Genome laboratory-developed test, an experienced sales force, and an increased focus on serving physicians addressing average-risk pregnancies. Because these advantages are considerable, it is essential for us to concentrate our resources on making the most of our opportunities in women's health."

The GenomeWeb Index showed that Sequenom's stock lost 56 percent of its value in 2015, erasing the gains the company made in 2014.

In late Thursday trading on the Nasdaq, Sequenom's stock was down 2 percent to $1.41 a share.

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