NEW YORK (GenomeWeb) – Sequenom said this week that fees and royalties from the noninvasive prenatal test patent pool it shares with Illumina is expected to make up an increasing share of its revenues in coming quarters.
During a conference call discussing its first quarter results, Sequenom management said that in the short term, the patent pool would result in Sequenom performing fewer MaterniT21 Plus tests, but that its overall test volumes will eventually rise, particularly with the adoption of its VisibiliT average risk pregnancy test.
In addition, it said that it is continuing to make progress with payors, and that in the first quarter, 76 percent of claims for MaterniT21 Plus have used the new molecular code specific for NIPT that went into effect in January, a percentage that increased to 90 percent in March alone.
Last year, Sequenom and Illumina announced that they would settle their patent disputes by pooling their patents and offering laboratories the ability to license the technology to develop their own noninvasive prenatal tests.
During this week's call, Sequenom CEO Bill Welch discussed the near- and short-term impacts of the patent pool, which now has 24 licensees, up from 21 in the fourth quarter 2014. Although the company has already seen some revenue from it — $2.1 million this quarter — in the shorter term it may result in fewer tests run, Welch said. For instance, he noted, Quest launched its own NIPT in April and is now paying a license fee to Sequenom.
"Quest will continue to market MaterniT21 Plus for select customers and in New York State, where Quest does not yet have a permit," Welch said. However, as a result of Quest and other laboratories converting to their own tests, Welch said that Sequenom would run fewer tests in the second quarter, although he still expects total tests for the year to be over 200,000.
Also during the call, Sequenom reiterated its plans to launch a noninvasive karyotyping test and a research-use-only ctDNA test in the second half of the year. The former will provide similar information as invasive procedures like amniocentesis or chorionic villus sampling, while the latter will initially be used for targeted treatment selection, post-treatment monitoring, and surveillance.
In addition, Sequenom launched VisibiliT and HerediT Universal, its universal carrier screening test, in the US during the quarter. Sequenom partnered with clinical genetic testing company Recombine to offer HerediT Universal.
Welch said that although "global momentum is building for NIPT in the average risk market, broader adoption and reimbursement will occur when professional societies formally endorse NIPT in that population." Until that happens, Welch expects that VisibiliT volumes in the US will be "modest."
Finally, Sequenom executives provided an update on ongoing patent litigation. During the call, management noted that it expects a decision soon on the validity of the claims of US Patent No. 6,258,540, the broad patent at the core of its running disputes with NIPT providers like Ariosa and Natera. Last year, a US Patent and Trademark Office board nullified nine claims of the patent.
Sequenom appealed the decision and Welch said this week that a final ruling could come this year, potentially as soon as this quarter.
"If we win, we will look to pursue an award of damages from infringing parties," Welch said. If the company does not win, Welch said that there would be no change to the patent pool.