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Sequenom sacks top management after data debacle

Sequenom’s much publicized prenatal test to detect the Down syndrome in fetuses scheduled to launch soon will be delayed as the company has detected various inconsistencies with the handling of clinical data pertaining to the test

Los Angeles, CA, September 29 -- Sequenom Inc (NASDAQ: SQNM) has shown the door to almost its entire top management team after finding out that confidential research data pertaining to its prenatal Down syndrome test had not been properly handled.

Those who were asked to leave the company include president and CEO Harry Stylli, and the senior vice president of research and development, Elizabeth Dragon.

Meanwhile, Chief Financial Officer Paul Hawran and vice president for commercial development of prenatal diagnostic tests, Steven Owings, put in their papers.

Three other employees were also reportedly sacked due to their involvement in the debacle. None of the officials who resigned or were fired admitted to any wrongdoings.

Corrective action
Confirming the firings, the company stated that the “committee’s investigation has raised serious concerns, resulting in a loss of confidence by the independent members of our board of directors in the personnel involved.”

Mr. Hixson, a former chief operating officer at the biotechnology giant Amgen, was meanwhile named as the interim chief executive of Sequenom.

The company also announced that it had put sufficient checks and balances in place to ensure that such goof-ups do not recur.

The biotech company intends to put a new organizational structure in place, impart training to its employees and adapt new procedures for storing samples.

Setback in Down syndrome test just a temporary one
San Diego based Sequenom had been working on the development of a test to identify the chromosomal abnormality, Down syndrome, in fetuses.

The test was meant to be noninvasive in nature and would have used a sample of the pregnant mother’s blood.

The company’s work was immensely acclaimed by medical community and the news media alike. The planned launch of the prenatal test may, however, be delayed now due to the data fiasco.

Mr. Hixson said, “We continue to believe that Sequenom has the potential to develop important noninvasive prenatal diagnostic tests.”

The data problems were “more a setback in time than anything else,” he added.

Negligence or fraud
"The company failed to put in place adequate protocols and controls for the conduct of studies in the Trisomy 21 (Down syndrome) program. This is a significant setback and the company will face challenges," stated the company in a regulatory filing Monday.

"Certain of the company's employees also failed to provide adequate supervision," added the company. The consequence of this inadequate regulation led the test data and clinical results to include "inadequately substantiated claims, inconsistencies and errors".

No light was however thrown on what ‘mishandling’ of data meant. Experts and investors alike could only make guesses as to weather it meant mere carelessness or outright misrepresentation and fraud.

The company, however, claimed that it would present the findings of the inquiry to the staff of the Securities and Exchange Commission (SEC).