SEQUENOM Announces Completion of Independent Investigation
SEQUENOM to Hold Conference Call Today at 2:00 p.m. Pacific Time
SAN DIEGO, Sept. 28 /PRNewswire-FirstCall/ -- SEQUENOM, Inc. (Nasdaq: SQNM) today announced the completion of the 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). The independent counsel engaged by the special committee interviewed over 40 witnesses and reviewed over 300,000 documents and emails.
Based on the special committee's work and recommendations, the independent members of the company's board of directors have concluded that as a result of the company's attempted transition from researching potential molecular diagnostic tests to developing and commercializing those tests, 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.
At the recommendation of the special committee, the company's board of directors has begun implementing a number of remedial measures, including:
new disclosure controls and procedures;
changes in the company's organizational and reporting structure;
enhanced training in ethics and scientific processes for the company's employees;
new procedures for the conduct of research and development and clinical studies, including increased roles and responsibilities for independent third parties;
new procedures for the storage and management of samples for testing; and
creation of a science committee of the company's board of directors to oversee its research and development strategy and activities.
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
International callers: +1-617-801-9712
Webcast information: Visit http://ir.sequenom.com.
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.
Sequenom, Inc. (Nasdaq: SQNM) is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. Sequenom maintains a Web site at http://www.sequenom.com to which Sequenom regularly posts copies of its press releases as well as additional information about Sequenom. Interested persons can subscribe on the Sequenom Web site to email alerts or RSS feeds that are sent automatically when Sequenom issues press releases, files its reports with the Securities and Exchange Commission or posts certain other information to the Web site.
SEQUENOM® is a trademark of Sequenom, Inc. All other trademarks and service marks are the property of their respective owners.
Except for the historical information contained herein, the matters set forth in this press release, including statements regarding the implementation of remedial measures, the company's plans to develop a noninvasive prenatal test for Trisomy 21 and the science underlying such a test, are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the risks and uncertainties associated with the company's ability to develop and commercialize new technologies and products, particularly new technologies such as noninvasive prenatal diagnostics and laboratory developed tests, the company's ability to attract and retain personnel, reliance upon the collaborative efforts of other parties, the company's ability to successfully implement the remedial measures recommended by the special committee and the effectiveness of those measures, the company's ability to manage its existing cash resources or raise additional cash resources, competition, intellectual property protection and intellectual property rights of others, government regulation particularly with respect to diagnostic products and laboratory developed tests, obtaining or maintaining regulatory approvals and other risks detailed from time to time in the company's Annual Report on Form 10-K for the year ended December 31, 2008 and other documents subsequently filed with or furnished to the Securities and Exchange Commission. These forward-looking statements are based on current information that may change and you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and the company undertakes no obligation to revise or update any forward-looking statement to reflect events or circumstances after the issuance of this press release.