Xenomics’ Preliminary Investigation Leads the Company to Believe Sequenom Willfully Manipulated its Down Syndrome Data in i...
December 17 2009 - 7:30AM
Business Wire
Xenomics, Inc. (XNOM.PK), a developer of transrenal molecular
diagnostics, announced today that an ongoing internal investigation
by Xenomics’ personnel of the events surrounding its licensing deal
with Sequenom (Nasdaq:SQNM) in late October, 2008 leads it to
conclude that Sequenom purposely misled the Company - fraudulently
inducing Xenomics into granting Sequenom an exclusive license to
its transrenal technology. Sequenom’s announced success in
developing a Down Syndrome test in late 2008 was the principal
factor in Xenomics’ decision to exclusively license its core
Transrenal DNA and RNA technology in the area of fetal diagnostics
to Sequenom.
Xenomics is presently suing Sequenom to recover the Transrenal
DNA and RNA technology as well as for specific and general
damages.
Events Surrounding Sequenom’s Downs Syndrome
Announcement
In September 2008, Sequenom made a "break through" announcement
to the medical community and Wall Street that it had succeeded in
developing a test for Down Syndrome, using fetal RNA, that had
greater than 99% sensitivity and specificity. The data were
presented at an analysts’ meeting by the Senior Vice President of
R&D of Sequenom. As a result of this discovery’s importance,
Xenomics exclusively licensed to Sequenom its Transrenal DNA and
RNA technology in the area of fetal diagnostics for testing in
urine.
In January 2009, less than 90 days after signing the agreement
with Xenomics, Sequenom announced that it was switching from RNA to
DNA and subsequently announced in the spring of 2009 that
irregularities existed in data handling for the Down Syndrome test
and that the data could not be relied upon. It also announced that
a committee of the board had been formed to determine the cause of
the data mishandling. In October of 2009, Sequenom announced that
the Down Syndrome testing data had been mishandled, though a full
explanation has yet to be forthcoming. The company has since fired
the CEO, the Sr VP of R&D and other individuals.
It has been reported that the Federal Bureau of Investigations
(FBI) as well as the Security and Exchange Commission (SEC) are
presently investigating Sequenom and its employees. Xenomics’
personnel have been advised to cooperate with all governmental
agencies in the event that they are contacted.
Xenomics Preliminary Conclusions Prior to Discovery
Process
Xenomics preliminary investigations prior to the discovery
process leads the Company to believe that Sequenom’s Down Syndrome
data were deliberately doctored in order to create an extremely
robust data set. This announcement also fraudulently induced
Xenomics into granting Sequenom an exclusive license to its
non-invasive transrenal urine testing technology for fetal testing.
Sequenom claims there was no fraud committed, only data
mishandling. Xenomics relied on Sequenom’s public statements that
they had solved the Down Syndrome testing problem in reaching a
decision to grant exclusive license to its valuable technology. In
addition, Xenomics has lost valuable time in advancing
commercialization of this technology because of the existence of
the Sequenom agreement. The Company intends to seek further damages
from this consequence.
About Xenomics, Inc. and TrovaGene TM,
Inc.
Xenomics Inc. is focused on the development of DNA and RNA-based
tests using Transrenal DNA (Tr-DNA) or RNA (Tr-RNA) and on products
for personalized medicine to improve patient care. Its patented
technology uses safe and simple urine collection and can be applied
to a broad range of applications, including tumor detection and
monitoring, infectious disease detection, prenatal testing, tissue
transplantation, genetic testing for forensic identity
determination, drug development, and research to counter
bioterrorism.
The company’s founding scientists were the first to report that
fragments of DNA from normal cell death cross the kidney barrier
and can be detected in urine. The company believes that its
technology will open significant new markets in the molecular
diagnostics field. The company has three issued U.S. patents
covering different applications of trans-renal technology for
molecular diagnostics and genetic testing and a European patent
covering prenatal testing applications. Xenomics also has numerous
patent applications pending.
Statements about the company's expectations, applications of its
technology, markets, and other statements that are not historical
facts are "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 and are based on management's
current beliefs, assumptions, estimates and projections. Actual
results may differ materially from those projected in the
forward-looking statements for various reasons, including risks
associated with product development, government regulation, market
acceptance, dependence on key personnel, obtaining financing and
other factors.