Ebb & Flow

Sequenom (NASDAQ:SQNM) has more than quadrupled its market cap to $1.6 billion from $350 million since early June, when the company released initial data on its Down syndrome test.

The $1.2 billion uptick equates to $436 for each of the 2.8 million U.S. women screened annually by the current method.

Last week, the company released additional data for its Trisomy 21 test. In 219 new prospective samples, the non-invasive fetal nucleic acid test identified Trisomy 21 in 100% of cases without any false positives or negatives.

Sequenom plans to start a 3,000-5,000 sample trial of the test at year end, and hopes to launch in June 2009.

The company also said it would acquire the Center for Molecular Medicine, a CLIA-certified laboratory JV from Spectrum Health and the Van Andel Research Institute, for $4 million, 90% of which will be paid in stock.

The company also plans to complete a CLIA-certified laboratory in San Diego. The labs will support Sequenom's clinical validation of the Trisomy 21 test and enable it to launch via CLIA-certified labs.

The company would receive 100% of the revenue for the unpartnered test.

On Wednesday, when Sequenom held an analyst day, the shares were up $7.20 (35%) to $27.76.

One for all

Since 2007, the American College of Obstetricians and Gynecologists(ACOG) has advised that all pregnant women be offered risk assessment for fetal chromosomal abnormalities, including Down syndrome.

The current screening method combines an ultrasound with a measurement of certain hormones in the mother's blood. About 70% of pregnant women in the U.S., or 2.8 million, undergo Down screening annually, according to Sequenom.

According to theUniversity of California at San FranciscoPrenatal Diagnosis Center, the nuchal translucency ultrasound costs $1,594 and the blood test costs $160.

This combination has a 70-90% detection rate for Down syndrome, with a >5% false positive detection rate. When some of these women are subsequently given a follow-up invasive testing procedure - amniocentesis or chorionic villus sampling (CVS) - the false negative rate is 10-20%, according to Allan Bombard, CMO of Sharp Mary Birch Hospital who participated in Sequenom's analyst day.

By contrast, Sequenom's Trisomy 21 test has shown a >99% detection rate with a <1% false positive rate. Subsequent amniocentesis and CVS follow-up has shown a <1% false negative rate.

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