Sequenom, a diagnostics testing and genetic analysis company, has announced it will pay $14 million and an undisclosed amount in stock to settle an investor class-action lawsuit over mishandling of data in the development of a potentially lucrative prenatal test for Down syndrome. The company did not admit wrongdoing.
The lawsuit came after the company’s stock lost more than three-quarters of its value last April. The company said then that its projections of the reliability of its prenatal test were not reliable, and said unnamed employees had not handled test data properly. Five top officers were fired and another resigned.
Investigations by the Securities and Exchange Commission, the FBI, and federal prosecutors are still pending.
BNET columnist Jim Edwards said changes in corporate governance announced as part of the settlement suggest that lawsuits against the company “seem to have introduced adult supervision at a company in dire need of it.”
Sequenom officials had estimated that the worldwide market for a prenatal test for Down syndrome is worth between $3 billion and $5 billion.
Earlier posts here.