Sequenom launches cystic fibrosis carrier screening test

From Reuters:

BANGALORE, India -- Genetic analysis products maker Sequenom Inc (SQNM.O) said on Thursday it launched its cystic fibrosis carrier screening test, sending its shares up 12 percent.

Earlier this year, Sequenom delayed the launch of its much-awaited Down Syndrome test due to mishandling of data by employees, shaking investor confidence in the company.

"A lot of people were sceptical if the company would be able to launch its tests in a timely manner," said Hapoalim Securities analyst Raghuram Selvaraju.

"The fact that they have launched this one indicates that they were serious about what they said in their last earnings call about rolling out these tests," he said.

Cystic fibrosis is a genetic disease in which the body produces a thicker-than-normal mucus that clogs the lungs and other organs. Carrier screening tests help identify individuals who may have an increased risk of having a baby with certain genetic conditions.

About 1.1 million cystic fibrosis carrier screening tests are performed each year in the United States and with an average reimbursement rate of $200 to $400 per test, the U.S. market is estimated to be in excess of $300 million a year, the company said in a statement.

Analyst Selvaraju said the launch of the test, SensiGene, was "a mild positive" because cystic fibrosis screening is a relatively limited market.

"It is a good proof-of-concept for Sequenom's genetic screening technology but, it is not likely to make a meaningful impact on the company's bottom line in the near and long term," he added.

He expects this test to have a market potential of over $100 million, while the Down Syndrome market is estimated at over $1 billion.

A company spokesperson said the test will be initially available in 18 metropolitan areas in the United States.

In April, the San Diego-based company said previously reported data and results related to its SEQureDx technology could not be relied upon due to mishandling by employees and delayed the launch of its prenatal Down Syndrome test.

The company also initiated an independent investigation into the matter.

In June, the U.S. Securities and Exchange Commission launched a probe into the company's announcement about the delay of the test.

The independent investigation is ongoing and the company will announce the results once they become available, the Sequenom spokesperson said.

Analyst Selvaraju said, "The main issue remains whether or not they can demonstrate the Down Syndrome test is viable."

Shares of Sequenom were up over 7 percent at $6.17 in afternoon trade on Nasdaq. They had touched a high of $6.47 earlier in the session.