Sequenom, Inc. (SQNM)
Q2 2010 Earnings Call Transcript
August 5, 2010 4:30 pm ET
Ian Clements – Senior Director, IR and Corporate Communications
Harry Hixon – CEO and Chairman
Paul Maier – CFO
Ron Lindsay – SVP, R&D
Zarak Khurshid – Wedbush Securities
Junaid Husain – Soleil Securities
Pamela Bassett – Cantor Fitzgerald
Bud Leedom – Global Hunter Securities
Kevin Degeeter – Ladenburg Thalmann
Sean Lavin – Lazard Capital Markets
Trey Cobb – Stephens
Kelley Roche – Jefferies & Company
Tony Butler – Barclays Capital
Good day, ladies and gentlemen, and welcome to the second quarter 2010 Sequenom earnings conference call. My name is Candal and I will be your operator for today. At this time, all lines are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) I would now like to turn the conference over to Ian Clements, Senior Director, IR and Corporate Communications. Please proceed.
Thanks Candal and good afternoon, everybody. With me today are Dr. Harry Hixon, Chief Executive Officer and Chairman of the Board; Mr. Paul Maier, Chief Financial Officer. And for the Q&A session, we will be joined by Dr. Ron Lindsay, Senior Vice President of Research and Development.
Earlier this afternoon Sequenom issued a news release announcing the company's results for the second quarter and first six months of 2010. If you've not received this news release or if you'd like to be added to the company's distribution list, please call investor relations at the company or you can sign up through the IR section of the company's website. Copies of news releases and SEC filings can also be found in the IR section of our website.
Before we begin, I'd like to inform you that this call will include a discussion of Sequenom's current plans and intentions regarding product developments and launches, expectations regarding Sequenom's financial resources and other forward-looking statements. I'd like to emphasize that these remarks are based on the information available to Sequenom today and are subject to various risks and uncertainties, including the risks described in the company's SEC filings. The company's actual results may differ materially from the statements made during today's conference call. And the company undertakes no obligation to update any of these statements.
Before turning over to Harry, from an investor communications perspective, we will be presenting an overview of the company on August the 17th at the Global Hunter inaugural healthcare conference in Newport Beach. A webcast of this presentation will be accessible through the investor relations section of our website. With that said, I will now turn the call over to Harry Hixon. Harry?
Thanks, Ian. And my thanks to each one of you for joining us today. During today's call I'd like to spend some time discussing our recent achievements and an overview of our business. Paul will follow with an update on the quarter's financial results released today. I will then conclude with additional highlights from the quarter and focus on key upcoming milestones and events.
The second quarter has again been a busy and productive period for Sequenom. In January of this year we prepared a list of goals that we hoped to achieve in 2010. And we've shown our progress against these goals in each of our public presentations. I'm pleased to report that we've accomplished many of these ahead of schedule. One of our most important goals for the year was to resolve the federal class-action lawsuit and the associated derivative suit.
I'm happy to report that Sequenom has received final court approval for the federal class-action settlement and also for the derivative litigation settlement. Our core genetic analysis business continues to show steady growth and the launch of our next generation MassARRAY Analyzer 4, intended for research use only, has been well received by our customers. During this quarter we placed a total of 11 instruments, of which three were our new MassARRAY Analyzer 4 systems.
In February, Sequenom Center for Molecular Medicine or Sequenom CMM, introduced its first two laboratory developed tests, LDT's based upon circulating cell-free fetal nucleic acids, our proprietary SEQureDx technology platform. Sales of the first of these tests, the SensiGene Fetal RhD Genotyping Test, have been showing steady growth.
The second test, the SensiGene Fetal XY Sex Determination Test, is non-reimbursable and must be paid for by the patient. And as a result, sales have been disappointing. We've decided to discontinue offering this test beginning September 15.
We continue to seek new market acceptance of the SensiGene Cystic Fibrosis Carrier Screening Test. Sequenom CMM has completed a study to investigate the performance of the cystic fibrosis test using an alternate collection methodology, buccal swabs.
Buccal swabs allow the collection of DNA by swabbing the inside of a patient's mouth. It is anticipated that buccal swabs will be available as part of the cystic fibrosis test later this month.
We believe the introduction of this alternate collection methodology will lead to greater penetration of this market. In last week's SEC Form 8-K filing, we disclosed that we received a letter from the U.S. Food and Drug Administration that referenced the marketing of our SEQureDx technology.
We do not believe that the FDA's letter is intended to encompass investigational products that are not commercially available, or tests other than those to evaluate fetal DNA for fetal gene and chromosomal abnormalities, as delineated in the letter. As such, it is our belief that this letter concerns the SensiGene RhD genotyping test. This test was developed and validated and used solely within and by our CLIA-certified and CAP-accredited laboratory, Sequenom CMM.