Cystic fibrosis test will be first for GR lab
Elizabeth Slowik

Sequenom Inc. plans to launch a new prenatal test for cystic fibrosis within the next few months, and the results will be processed by the company’s Center for Molecular Medicine in Grand Rapids, the CEO said Thursday.

The cystic fibrosis test is the first of the California company’s three prenatal molecular diagnostic tests slated for launch following an April announcement that its widely anticipated Down syndrome test would be delayed by mishandling of test data.

“Our sales force plans to introduce this product in 18 metropolitan markets in the U.S. and it will be our first product launched by our CLIA laboratory, SCMM, into the clinical testing market,” CEO Harry Stylli told analysts in a quarterly earnings conference call.

Stylli said the cystic fibrosis screening test, entering a $300 million market, is expected to be joined by a Rhesus D test and a gender test by the first quarter of 2010.

All three tests would be processed at the Sequenom CMM, which the public company purchased last year from the Van Andel Institute and Spectrum Health for $4 million and stock. Ninety percent of the deal was in stock, the company said in a press release. It is Sequenom’s only laboratory that holds the proper certification to process tests on humans for the commercial market.

Originally located in Grand Valley State University’s Cook-DeVos Center for Health Sciences, the lab build-out is expected to occur at space leased by Sequenom earlier this year in the Arena Station building. Both buildings are in downtown Grand Rapids.

“These tests will only be performed at SCMM, consistent with the model we discussed in the past,” Stylli said. “And in cystic fibrosis, we are actually partnering with the Mayo Clinic. So they may, under our partnership, they may eventually offer the test as a homebrew, also.”

The U.S. market for the gender-test, which Stylli said would be a cash business, is anticipated at $150 million to $200 million. The RhD test enters a U.S. market of $250 million to $300 million, he said.

“It is our SCMM facility that’s driving all this activity,” he said, adding that employment at the Grand Rapids lab has been “relatively stable.” Earlier this year, Sequenom spokesman Ian Clements said the lab employs 13.

The company received state and municipal tax breaks in exchange for a promise to create more than 500 jobs in Grand Rapids over five years.

Sequenom also sells several products used in genetic research.

The company reported a second quarter net loss of $20.2 million, or 33 cents per share, on revenues of $9.2 million. That is compared to a $9.7 million loss, or 21 cents per share, on revenues of $12.8 million in the same period in 2008.

Stylli attributed the financial results to the weak economy and to increased legal expenses related to its derailed Down syndrome test. He said the independent investigation is continuing. He did not address the Securities and Exchange Commission investigation or the numerous shareholder lawsuits sparked by the incident.