Sequenom Inc. (NASDAQ: SQNM) dismissed its chief executive officer and a senior research executive after finding the company mishandled development of a test for Down syndrome, according to Bloomberg on Monday.
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The company said it terminated the employment of Harry Stylli and Elizabeth Dragon, who had been senior vice president for research and development. The terminations are effective immediately, and Stylli was asked to resign from the board of directors. Three other employees were also let go, Sequenom said.
The genetic analysis test maker said Chief Financial Officer Paul Hawran resigned on Friday, as did one other unnamed executive. The moves followed an investigation by a committee of independent directors, according to Associated Press.
Sequenom said Harry Hixson Jr., 71, a member of its own board and a former president and chief operating officer of Amgen Inc., will take over as interim CEO. Another board member, Ronald Lindsay, 61, will be interim CFO, and controller Justin File, 39, will be the principal financial and accounting officer.
On April 29, Sequenom said study data and results for the SEQureDx Down test could not be relied on due to "employee mishandling." SEQureDx appeared to be a promising test that was faster, cheaper, less invasive and less risky than other methods, like amniocentesis. Its results in preliminary studies were close to perfect.
The company said its still believes in the science behind the SEQureDx test, but the previous test results should not be relied on.
Sequenom once planned to launch the test in June, but it will not reach the market until the first half of 2010 at the earliest, as the company is now waiting for results from two large, independent clinical studies.
Stylli had been Sequenom's president and CEO since June 2005, while Dragon joined the company in May 2006. Hawran became CFO in April 2007.
The independent counsel retained by Sequenom interviewed more than 40 witnesses and reviewed more than 300,000 documents, the company said. The counsel found the inadequate controls and supervision lead to "inadequately substantiated claims, inconsistencies and errors" for SEQureDx.
Shares of the company plunged on the news, losing $2.86, or 50 percent, to $2.82 in aftermarket trading. The stock shed about three-quarters of its value after the mishandled testing was disclosed, and finished at $5.69 on Monday. Shares have traded between $2.86 and $28.60 over the last year.
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