Sequenom will rely on independent third-party validation of all future tests after an investigation into SEQureDX Down syndrome test R&D data revealed mishandling by employees.

The firm also has fired CEO Harry Stylli, Senior VP-Research and Development Elizabeth Dragon, and several other employees, and CFO Paul Hawran has resigned, following an independent investigation by a special committee of independent directors, the results of which were announced Sept. 28.

The investigation, which began in April, found that Sequenom "failed to put in place adequate protocols and controls for the conduct of studies" in the Down syndrome (Trisomy 21) test program, and "certain of the company's employees also failed to provide adequate supervision," the company said (¹ Also see "Tainted Data Delays Launch Of Sequenom’s Down Syndrome Test" - Medtech Insight, 4 May, 2009.).

While the departing company execs have denied wrongdoing, the lack of oversight identified in the investigation "resulted in inadequately substantiated claims, inconsistencies, and errors in the test data and results for our T21 program," reported Chairman Harry Hixson.

"As a result ... flawed test data and results were reported to the public," Hixson said. The exec will now also serve as interim CEO.

The firm maintains that the oversight issues with the T21 test do not extend to other products, such as a recently launched cystic fibrosis test, which underwent third-party validation.

Nevertheless, remedial measures now being taken by the firm include new disclosure controls and procedures, changes in the company organization and reporting structure, and enhanced employee training in ethics and scientific processes.

A science committee of the board of directors also will be created to oversee R&D activity and strategy, and the firm will establish new procedures for conducting R&D and clinical studies, "including increased roles and responsibilities for independent third parties," according to the company. "We believe that the external independent third-party validation of all of our tests is going to be required in the future," Hixson said.

SEQureDX would be the first noninvasive prenatal assay to directly measure fetal chromosomal abnormalities in a mother's blood - a potential alternative to more invasive tests like amniocentesis or chorionic villus sampling.

Among the suspect data were results showing the firm's RNA-based technology achieved a better than 99% detection rate and less than 1% false positive rate in an 858-sample prospective trial.

The company said it would delay the test's launch as it revalidated its DNA- and RNA-based test methods for Down syndrome. However, Sequenom noted that it cannot provide guidance on the timeframe to complete clinical studies or commercialization.

The firm continues to believe the base technology - which uses a mass spectrometry approach to nucleic acid detection - will be commercially viable. "I don't think we see any change in the core technology," said Ronald Lindsay, a Sequenom director who will serve as interim senior VP-R&D.

"I think some of the challenges are in the appropriate collection of blood samples, accruing the right validation technologies," the exec said.

In the meantime, "I think you can safely say that we are going forward with the preexisting business strategy, both in the diagnostics area and in the genetics analysis business," Hixson said.

Firm Still Faces SEC Investigation, Shareholder Suit

During its Sept. 28 conference call with investors, Sequenom did not provide details on how exactly the T21 data were compromised, noting that the firm is still embroiled in a related Securities and Exchange Commission investigation and shareholder class action lawsuit. Sequenom's stock dropped 39% on Sept. 29, closing at $3.46.

The company says it will continue to develop other prenatal assays, including tests for rhesus D and fetal sex determination, although it is unclear when those products will launch. The firm's genetic analysis business includes DNA methylation analysis and rare mutation profiling.

- Brooke McManus ( ² b.mcmanus@elsevier.com )

Sequenom Addresses Problems With Tainted Data; CEO Fired

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