NEW YORK -- Obscured by the flurry of sensational disclosures in the Sequenom Down Syndrome data scandal is the collateral damage of human disappointment over the resulting indefinite delay in developing a prenatal, non-invasive test to replace riskier and less-accurate procedures such as amniocentesis.
As announcement after announcement by Sequenon heralded an imminent launch -- as early as mid-2009 -- of a "breakthrough"
An estimated 2.8 million women undergo Down Syndrome screening in the United States every year -- and they face procedures that may involve not only the pain of needle injection, but also diagnostic miscalculation and the risk of damage to the fetus. But in declaring its testing was mishandled and unreliable, Sequenom may have set back for years hopes of verifiable progress.
Xenomics, Inc., now TrovaGene, Inc., which had conveyed exclusive licensing rights for its Down Syndome technology to Sequenom -- only to find out that Sequenom had doctored the books on data showing optimistic test results -- is now pressing a lawsuit that could put the goal of a non-invasive, safe and effective alternative to the currently available procedures back on track.
Xenomics is seeking a return of the licensing patents so it can either take them to "a legitimate company" or develop its own products with the technology, the New York company's attorney, David Jaroslawicz, said in court papers in New York State Supreme Court in Manhattan.
Xenomics is also charging that Sequenom's fraudulent actions are depriving it of royalties under the agreement, hurting its reputation and seeks $300 million in damages.
"The recent shocking events involving Sequenom, including intentional misconduct of its otwn employees, demonstrate beyond doubt that, in fact, Sequenom lacked the scientific discipline, technical expertise and now, reputation, that it represented during our negotiations of the (license) agreement," Xenomics board chairman Thomas H. Adams said in a letter to San Diego-based Sequenom, according to the lawsuit.
Adams said there is ongoing, serious repercussions to Xenomics because of the far-reaching fraud.
"The harm to Xenomics testing pipeline, ability to raise capital and reputation has caused Xenomics millions of dollars in damages," he said.
Xenomics had been working on developing a prenatal diagnostic test to detect Down Syndrome that would eliminate the current invasive amniocentetis procedure. In October, 2008, it entered into an exclusive licensing agreement with Sequenom conveying its patented technology to Sequenom after being "misled" into believing by Sequenom that it had superior resources and scientific expertise to develop and commercialize the prenatal product.
Sequenom's own admissions that it could not substantiate its testing claims led to a sharp drop in its shares and the firing or resignation of its CEO and six other employes, in addition to investigations by the Securities and Exchange Commission and the FBI. Another Sequenom executive was sued for alleged insider trading prior to the release of the news of the mishandling of the Down Syndrome data. The scandal spawned the lawsuit filed by Xenomics in October, 2009, and investor lawsuits involving a dozen cases which Sequenom announced it had settled for $14 million.
In ta recent settlement announcement, Sequenom acknowledged it agreed "to adopt or continue the implementation of changes and additions to certain corporate governance policies, protocols and practices." These changes directly involve the company's research and development activities and the transparency of its operations.
"The recent public admissions of data irregularities make it abundantly clear that Sequenom, at the time it entered into the (license) agreement, was neither capable nor intending to perform its development and marketing obligations under the agreement," Adams said.
