Sequenom's Disappearing Down Syndrome Test Mystery -- Solved!
When is a test for Down syndrome not a test for Down syndrome? When it's the subject of litigation between Sequenom (SQNM) and Xenomics, who are fighting over who owns the test.
Ownership of the test is a big deal because if it works, pregnant women will be able to take a simple blood exam to tell at an early stage whether her baby has Down syndrome. That's a potential blockbuster of a product.
Sequenom appeared to be on its way to perfecting the test last year when it became mired in a data corruption-cum-insider-trading scandal and was forced to start again. Xenomics, believing Sequenom no longer had the ability to finish development of the test, then sued Sequenom demanding the return of its patents to the test, which Sequenom had licensed.
This is where the confusion comes in. In its defense, Sequenom claimed that it never had an agreement with Xenomics over the Down syndrome test. So does Sequenom have Xenomics' Down sydrome test or not? It seems like a simple question, yet neither company has put forward a decent explanation since the suit was filed last October.
One answer comes in an email forwarded to BNET from Xenomics chairman Tom Adams, which states that Sequenom's Down syndrome test "is not based on" the patents it bought from Xenomics. That's problematic because Xenomics' lawsuit appears to say the exact opposite. Xenomics' complaint states clearly, right at the top, that it held:
... certain patents which would enable the defendant [Sequenom] to develop and market its Down Syndrome test.
On or about October 29, 2008, the plaintiff and defendant entered into a licensing agreement whereby defendant would be given exclusive rights to plaintiff's patents ...The complaint then goes into detail regarding Sequenom's progress with the Down syndrome test before finally alleging that "defendant has no real non-invasive testing for Down Syndrome ... and had the plaintiff known of this, it would never have entered into an agreement with the defendant."
Sequenom's response is that there were "no representations in the Agreement about any Down Syndrome test."
When asked to explain discrepancy, a representative for Xenomics (which has since changed its name to TrovaGene) forwarded this email from Adams:
-----Original Message-----That, in a nutshell, is Sequenom's position, and appears to contradict Xenomics' suit. (It also explains the discrepancy over whether this is a urine or a blood test.)From: [REDACTED]@leucadiatechnologies.com To: [REDACTED]@aol.com Sent: Thu, Mar 11, 2010 3:31 pm Subject: RE: TrovaGene/Sequenom
Hi--the Sequenom test is not based on the TrovaGene urine technology. A test developed on the TrovaGene technology would be a direct competitor which is probably why they licensed the technology--and put in on the shelf
tom
In an attempt to reconcile the email with the suit, Xenomics says that what the suit really says is that Sequenom bought Xenomics' test not because it wanted it to develop a Down syndrome test but because Sequenom simply wanted to remove potential competitors from the marketplace. Which is a reasonable thing to do ... but doesn't explain why the words "Down Syndrome" appear on virtually every single page of Xenomics' complaint.
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