Sequenom's ($SQNM) fall is becoming a season of problems. The diagnostics company recently lost a legal fight against Ariosa Diagnostics in federal court over a key patent involving prenatal genetic testing. Now, a former CEO is seeking more than $1.6 million in damages stemming from his 2009 firing over an R&D scandal.
As GenomeWeb reported, the San Diego company disclosed in a regulatory filing that ex-CEO Harry Stylli "made an arbitration" demand relating to his employment agreement with the company. Stylli alleged that he was fired in Sept. 2009 "without cause" and that Sequenom breached his contract by not paying severance. He's seeking in excess of $1.6 million in damages to cover lost benefits, interest and legal costs.
Sequenom said it will "vigorously" fight Stylli's arbitration demand, according to the regulatory filing.
Stylli's legal action is the fallout from a scandal that led to his axing and that of other executives. At issue is the way Sequenom handled R&D data regarding a Trisomy 21 prenatal test for Down syndrome under development. At the time, Sequenom's board determined that the company lacked adequate protocols and controls and supervision for the studies, leading to errors, inconsistencies and poorly substantiated claims. That, in turn, led to shareholder complaints and a delayed launch of the test.
Last month, the U.S. District Court for the Northern District of California invalidated Sequenom's patent for the detection of fetal cell-free DNA in the bloodstream of pregnant women. Sequenom has said it will appeal the decision with the Federal Circuit Court of Appeals.
Sequenom recently released its latest financials, disclosing that it generated $44 million in revenue through the 2013 third quarter but lost more than $28.1 million. In the 2012 third quarter, Sequenom booked $34.9 million and lost $30.2 million.