Sequenom has axed a group of its top executives, including its CEO, after concluding an internal investigation into a scandal revolving around their handling of data on a prenatal test the biotech company was developing. The San Diego-based company (SQNM), a prominent provider of genetic analysis equipment, saw its shares tank 46 percent when the news hit the wire services last night.
CEO Harry Stylli, PhD, (photo) and Senior Vice President of R&D Elizabeth Dragon, PhD, were fired while the company's CFO, Paul Hawran, was pressured to resign along with another officer, who was not identified. The company coup was arranged after a group of independent board members conducted an internal review of the controversy surrounding its Trisomy 21 (Down syndrome) program.
The directors 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."
Various shareholders have alleged in court that the company mishandled R&D data--claims which the SEC is investigating--while preparing the test for a commercial launch. The launch was put on hold last April and this morning Bloomberg is reporting that the delay could stretch on for another year. One analyst for Rodman& Renshaw said that the test may take much longer than that before its ready for the market.