Sequenom ( SQNM) is leaning towards making a big change in the technology that forms the basis for its prenatal genetic screening test for Down syndrome. The San Diego-based genetics testing company is working quickly to perfect and validate a DNA-based screening method for its Down syndrome test in time for a commercial launch this summer, said Sequenom CEO Harry Stylli in an interview Tuesday. This represents a change in strategy for Sequenom, which had previously told investors that the company intended to launch an RNA-based version of the Down syndrome test in the same time frame. "We are maturing both the RNA-based and DNA-based tests simultaneously, but we are close to choosing a launch with the DNA test only," said Stylli. The stakes are high for Sequenom, which is betting its future on widespread adoption of a genetic test for Down syndrome and other infant disorders that it believes will prove to be superior and safer than current screening methods and diagnostic tests like amniocentesis. If that occurs, Sequenom could stake a large claim to a $2 billion-a-year prenatal testing market. Investors were only just beginning to digest data from January fleshing out the accuracy of Sequenom's RNA-based test. Now, the company is essentially shunting all that data aside and telling investors to have equal confidence in a new, less-proven DNA-based test. When word of the company's decision first surfaced during a health care conference last week, Sequenom shares dipped because investors were concerned about the relative paucity of data collected to date confirming the accuracy of the DNA-based Down syndrome test.
Since then, Stylli has been speaking to investors in order to assuage any worries and to explain the advantages of the choosing the DNA-based test over one which relies on RNA. "The data we've collected to date
on the DNA-based test is extremely good. You can't tell the difference with the RNA test," he says, referring to its accuracy in detecting Down syndrome. The DNA-based test is superior to the RNA-based test because it reduces the rate of "no calls" -- or inconclusive results -- for Down syndrome and is able to detect other genetic abnormalities such as Edwards syndrome and Patau syndrome, Stylli adds. So far, whatever Stylli is saying to investors appears to be working. Since closing Friday at $13.86, Sequenom shares have risen steadily and are up 20% to $16.69 in recent trading. To date, Sequenom has used the DNA test to analyze 359 blood samples from pregnant woman; another 500 to 1,000 samples will be tested before the DNA-based Down syndrome test is ready for a commercial launch. If Sequenom can't get this new work done in time for a summer launch, or if the data, once analyzed, reveal a problem with the DNA test, Sequenom may come to regret its decision to switch tests so suddenly. 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. 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 -- or now DNA -- in a mother's bloodstream. Using a small sample of blood taken from the mother, Sequenom isolates fetal RNA or DNA 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. Know what you own: Other companies involved in diagnostic and genetic testing include Myriad Genetics ( MYGN), Illumina ( ILMN) and LabCorp ( LH).