Updated from 10:13 a.m. EST

A prenatal genetic screening test for Down syndrome being developed by

Sequenom

(SQNM)

no longer has a perfect track record.

The San Diego-based genetics-testing company said Wednesday night that its experimental SEQureDx test recorded one false positive from a new batch of 459 blood samples collected from pregnant women at high risk for giving birth to a Down syndrome baby.

Shares of Sequenom were down 2.1% Thursday to $22.13.

Until now, Sequenom's test had a 100% detection rate for Down syndrome and a 0% false positive rate when used in just under 400 pregnant women -- a perfect record. While Wednesday's disclosure of one false positive test in more than 858 total samples mars that flawless performance, Sequenom CEO Harry Stylli says an overall false positive rate of one-tenth of 1% is significantly better than current prenatal screening methods for Down syndrome, which can have a false positive rate of around 5%.

"The test is performing better than we expected at this point in the game, and from a statistical perspective, the test has actually gotten stronger from where it was previously," he said. "As we increase our sample size, we expected to have false positives and false negatives, so to have a 100% detection rate and only one false positive is a better performance than I thought we would have," he added.

A false positive means that a pregnant woman is told she may be carrying a child with Down syndrome when in fact, her unborn baby does not have the genetic disease. False positives from screening tests like these are problematic because women then go on to confirm the diagnosis unnecessarily with invasive procedures like amniocentesis, which carry a small risk of miscarriage.

Sequenom is in the process of validating its SEQureDx test in a company-run study that has enrolled 858 women from across the country. The latest analysis of this study was unveiled Wednesday night at a Sequenom-sponsored investor event being held in conjunction with the Society for Maternal-Fetal Medicine's annual meeting.

The company intends to launch a commercial version of the Down syndrome genetic screening test in June.

Ultimately, Sequenom believes that its genetic test will prove to be superior and safer than current screening methods and diagnostic tests like amniocentesis and replace them all. If that occurs, Sequenom could stake a large claim to a $2 billion-a-year prenatal testing market.

Down syndrome occurs when a baby has three copies of chromosome 21 instead of the normal two copies. Babies born with Down syndrome grow up with developmental and mental disabilities and abnormal facial appearances.

Today, pregnant women deemed to be at higher risk are screened for Down syndrome using a combination of ultrasound and blood tests. These screens typically detect between 85% to 90% of babies with Down syndrome and carry a false positive rate of around 5%.

To definitively diagnose Down syndrome, women undergo an invasive procedure like amniocentesis or chorionic villus sampling, which collects fetal cells and counts the number of chromosome 21s.

The Sequenom test relies on new technology that can detect minute amounts of fetal RNA in a mother's bloodstream. Using a small sample of blood taken from the mother, Sequenom isolates fetal RNA and determines whether there are two copies of chromosome 21 (a healthy baby) or an extra copy of the chromosome, which would indicate Down syndrome.

Sequenom can perform the test as early as 10 weeks after a woman becomes pregnant.

In some cases, the Sequenom test is unable to determine the number of chromosome 21s present in a fetus because of similarities in the genetic makeup of the mother and father. This occurs more often in Asians than other ethnicities.

In the current study presented Wednesday, this "no call" rate was 10.4%. That number was inflated because the percentage of Asians enrolled in the study was higher than in the general U.S. population, said Stylli.

When Sequenom launches the commercial version of the SEQureDx test in June, it will likely be used by a relatively small number of doctors at first until larger studies can be run that will provide more definitive proof of accuracy, says Stylli. Those larger studies are underway now, with data expected over the next two years.

At the same time, Sequenom is working on a second-generation version of its test that isolates and analyzes fetal DNA from a sample of a mother's blood. With this improved technology, Stylli says the no call rate will be reduced to near zero and the test will also be able to detect other genetic abnormalities such as a Edwards syndrome and Patau syndrome, which are picked up on currently used screening tests.

At the time of publication, Feuerstein's Biotech Select model portfolio had no positions in stocks mentioned.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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