|Shares of Sequenom rocked by investigation|
|By Staff and Wire Reports|
|Monday, 28 September 2009 15:53|
SEQUENOM, Inc. (Nasdaq: SQNM) today announced the completion an independent investigation by a special committee of independent directors related to the test data and results for the company’s noninvasive prenatal test for Trisomy 21 (Down syndrome).
Based on the special committee’s work and recommendations, the independent members of the company’s board of directors have concluded that the company failed to put in place adequate protocols and controls for the conduct of studies in the Trisomy 21 program at the company. Certain of the company’s employees also failed to provide adequate supervision. In the absence of such protocols, controls and supervision, the test data and results in the company’s Trisomy 21 program included inadequately substantiated claims, inconsistencies and errors. Due to deficiencies in the company’s disclosure controls and procedures, in a number of instances such test data and results were reported to the public in the company’s press releases and other public statements.
The company has terminated the employment of its president and chief executive officer, Harry Stylli, Ph.D., and its senior vice president of research and development, Elizabeth Dragon, Ph.D., effective immediately. In connection with the termination of Dr. Stylli’s employment, the company’s board of directors has requested that he resign as a director, which he is obligated to do under the terms of his employment agreement. The company has obtained the resignation of its chief financial officer, Paul Hawran, and one other officer. The company also terminated the employment of three other employees. While each of these officers and employees has denied wrongdoing, the special committee’s investigation has raised serious concerns, resulting in a loss of confidence by the independent members of the company’s board of directors in the personnel involved.
Members of the special committee and its independent counsel will make a presentation on the investigation to the staff of the Securities and Exchange Commission.
Effective today, the company’s board of directors has appointed chairman of the board Harry F. Hixson, Jr., Ph.D., former president and chief operating officer of Amgen, Inc., and director Ronald M. Lindsay, Ph.D., to serve on an interim basis as chief executive officer and senior vice president of research and development, respectively. The company’s board of directors has also designated controller Justin J. File as principal financial and accounting officer.
The company reiterates that it is no longer relying on, and the public should no longer rely on, any of the previously announced test data and results for the company’s noninvasive prenatal test for Trisomy 21.
At this time the company is unable to provide guidance on the timetable for the completion of research and development or for the potential commercialization of its Trisomy 21 test. However, the company continues to believe in the science underlying the test and is continuing its research and development program for this test. The release of fetal material into maternal circulation has been validated by a number of academic laboratories and potential competitors as well as the company. Sequenom continues to believe that this fetal material, including nucleic acids, will provide important information about the genetic makeup of the fetus and that this information may become the basis for new diagnostic tests. As a pioneer in this area, Sequenom intends to pursue these important developments that may have a major impact on maternal and fetal health.
Conference Call Information
The company has scheduled a conference call for 2:00 p.m. Pacific time today to discuss this announcement.
Domestic callers: 1-800-299-0433
The webcast is also being distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.earnings.com, Thomson’s individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson’s password-protected event management site, StreetEvents (www.streetevents.com).
A webcast replay will be available on the SEQUENOM Web site for 30 days. A telephone replay will be available for 48 hours following the conclusion of the call by dialing 1-888-286-8010 for domestic callers, or +1-617-801-6888 for international callers, and entering reservation code 12857429.