Shares of Sequenom ( SQNM) plummeted Thursday morning after the company said clinical data supporting its prenatal genetic test for Down syndrome was unreliable due to "employee mishandling" of test data.

The commercial launch of the company's SEQureDX test, scheduled for June, has been delayed, and an independent investigation is being launched, the company said.

The stunning news, released after the market closed Wednesday, sent shares of Sequenom plunging 76.2% to $3.55 in early Thursday trading.

Sequenom was betting its entire future on widespread adoption of a genetic test for Down syndrome and other infant disorders that it believed would prove to be superior to and safer than current screening methods and diagnostic tests like amniocentesis. If successful, Sequenom was expected to stake a large claim in a $2 billion-a-year prenatal testing market.

Sequenom made public clinical data throughout 2008 and 2009, which it claimed confirmed the strong efficacy of its SEQureDX Down syndrome test. But Wednesday night, the company said none of that data could be trusted any longer.

"Internal inquiries have determined that the RNA study data was mishandled by individuals in our company. This raises significant concerns about the integrity of that data," said CEO Harry Stylli, on a conference call Wednesday night.

In order to launch the test now, Stylli said, new patient samples need to be obtained to validate the test all over again, which may occur in the fourth quarter. However, a commercial launch will not take place until next year, once validated, independent studies are completed and published.

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 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.

Given Sequenom's revelations Wednesday, the ability of the company to turn that that into a viable commercial test is now under a dark cloud.

Know what you own: Other companies involved in diagnostic and genetic testing include Myriad Genetics ( MYGN), Illumina ( ILMN) and LabCorp ( LH).

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; click here to send him an email.

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