Sequenom Reports Third Quarter 2009 Financial Results

SAN DIEGO, Nov. 9 /PRNewswire-FirstCall/ -- Sequenom, Inc. (Nasdaq: SQNM)
today reported its financial results for the quarter ended September 30, 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20040415/SQNMLOGO)

Third Quarter Results
-- Total revenue for the third quarter of 2009 was $9.2 million, compared
with $11.6 million for the third quarter of 2008.
-- Cost of product and service revenue for the third quarter of 2009 was
$2.7 million, compared with $4.5 million for the third quarter of
2008.
-- Gross margin for the third quarter of 2009 was 71%, compared with 61%
for the third quarter of 2008, reflecting higher consumable sales as a
percentage of the company's product sales.
-- Research and development expenses were $8.5 million for the third
quarter of 2009, compared with $7.1 million for the same period in the
prior year. Research and development expenses for the third quarter of
2009 reflected additional expenses associated with product
development,
sample collection activities for clinical trials, and expenses
associated with the company's Clinical Laboratory Improvement
Amendment
(CLIA) certified laboratory.
-- Selling, general and administrative expenses of $12.6 million for the
third quarter of 2009 increased from $10.7 million for the third
quarter
of 2008 as a result of increased legal expenses, higher stock-based
compensation expense, higher facilities costs, and expenses associated
with the contract sales force for the company's CLIA
laboratory-developed test (LDT) services.
-- Total costs and expenses for the third quarter of 2009 were $24.3
million, compared with $22.3 million for the comparable quarter in
2008.
For the three months ended September 30, 2009 and 2008, the company
recorded $3.0 million and $2.2 million, respectively, of stock-based
compensation expense.

-- Net loss for the third quarter of 2009 was $14.9 million, or $0.24 per
share, compared with $10.4 million, or $0.18 per share, for the third
quarter of 2008.

Nine-Month Results
-- Revenue for the first nine months of 2009 totaled $27.1 million,
compared with $35.0 million for the first nine months of 2008.
-- Cost of product and services revenues for the first nine months of
2009
was $9.2 million, compared with $14.7 million reported for the first
nine months of 2008.
-- Gross margin for the first nine months of 2009 was 66%, compared to
58%
for the first nine months of 2008.
-- Total costs and expenses for the first nine months of 2009 were $80.2
million, versus $63.5 million for the comparable period in 2008. For
the
nine months ended September 30, 2009 and 2008, the company recorded
$9.2
million and $5.0 million, respectively, of stock-based compensation
expense.

-- Net loss for the first nine months of 2009 was $52.6 million, or $0.86
per share, compared with $28.7 million, or $0.57 per share for the
comparable period in 2008.

Cash, Cash Equivalents and Available for Sale Securities
As of September 30, 2009, Sequenom had total cash, cash equivalents and
short-term marketable securities of $50.1 million and $7.2 million in accounts
receivable.

"The previously announced events surrounding our trisomy 21 program have been
a major setback for the company. The independent investigation has been
concluded and a new senior management team has been put in place. New internal
procedures and protocols have been implemented to reduce the likelihood of a
reoccurrence of similar problems. We are continuing our efforts to develop and
commercialize a broad portfolio of molecular diagnostic tests," said Harry
Hixson, Ph.D., chairman and CEO of Sequenom. "Based upon our strong underlying
science and robust intellectual property estate, I believe that Sequenom is
uniquely positioned to launch a series of differentiated, potentially
first-in-class, molecular diagnostic tests. Additionally, the management team
is pleased with the results from our Genetic Analysis business. We have
successfully managed to sequentially grow our revenues since the first quarter
in spite of the continuing challenging economic conditions. I am optimistic
that we will continue to see growth in the adoption of our MassARRAY systems
and the utilization of system consumables into 2010."

2009 Third Quarter and Recent Highlights

Genetic Analysis

Launch of MassARRAY® Compact 96 System - the company recently launched this
new version of the MassARRAY system which addresses the needs of lower
throughput laboratories. The new MassARRAY Compact 96 system offers accuracy,
sensitivity, and the ability to cost-effectively run fewer samples making this
an ideal system for validation of candidate genetic markers in basic research
and clinical research laboratories.

Diagnostics Business

Commercial Launch and Future Launch Plans - The company launched the
SensiGene(TM) Cystic Fibrosis (CF) Carrier Screening Test, its first LDT,
through its CLIA laboratory in September. The company expects to launch the
SensiGene Fetal RHD Genotyping and SensiGene Fetalxy (fetal sex determination)
tests late in the first quarter or early in the second quarter of 2010.
Details on all these tests may be found at http://www.scmmlab.com.

Sequenom Center for Molecular Medicine (Sequenom CMM) recently received a
license to perform clinical laboratory testing in molecular genetics/molecular
diagnostics in California. With the addition of this license, Sequenom CMM can
now market and sell in 48 of the 50 US States.

The SensiGene CF Carrier Screening Test:

-- This innovative test screens for 103 mutations and five variants,
including the 23 mutations recommended by the American College of
Medical Genetics (ACMG). This test has been shown to identify each of
the 103 mutations and five variants through genomic DNA testing.
-- The test offers superior detection rates and broader ethnic coverage
when compared to the standard ACMG 23 recommended mutations panel.
Because of the increased difficulty in assigning a single ethnicity to
an individual, expanded CF panels can provide increased sensitivity
for
CF carrier screening for many individuals. A more comprehensive
mutation
panel is important as 1 in 17 CF carriers may be missed using the
standard ACMG 23 CF carrier screening panel.

-- The test employs Sequenom's proprietary MassARRAY system which
utilizes
direct and label-free analysis of nucleic acids.

Trisomy 21 Test - The company is rigorously evaluating multiple RNA and DNA
technologies for use in the development of its trisomy 21 (T21) test.

Clinical Studies - The company is currently sponsoring a number of clinical
studies that require prior sample collection.
-- Fetal RHD Genotyping Clinical Studies.
-- Fetal Sex Determination Clinical Studies.
-- T21 Clinical Studies.
-- T21 Research Study.
-- T21 Research & Development Study (CHARMM - Chromosomal
Aneuploidies
Research to find Maternal Plasma Markers).
-- T21 Verification and Validation Studies.
-- Obstetrix Verification Study.

-- Women & Infants Validation Study.

Details on the above studies can be found at http://www.clinicaltrials.gov or
at http://www.sequenom.com/clinicalstudies.

Intellectual Property
-- On October 22, 2009, we entered into a Non-Exclusive License and
Settlement Agreement with Ibis Biosciences, Inc. related to the
settlement of patent infringement litigation filed by us against Ibis
Biosciences in the U.S. District Court for the District of Delaware.
Under the agreement, Ibis Biosciences has agreed to pay us $1 million
within 30 days, and we have agreed to grant Ibis Biosciences and its
affiliates, including Abbott Laboratories, a non-exclusive license
under
the patents involved in the lawsuit and certain pending applications
and
foreign counterparts.

-- On November 3, 2009, we entered into an amendment of our license
agreement with Isis Innovation Limited. Under the amended agreement,
we
secured continued exclusive, royalty-bearing rights to US Patent
6,258,540 and its foreign equivalents, related to noninvasive analysis
of fetal nucleic acid. In consideration of this amendment, we have
agreed to revised milestones and to make an immediate one time payment
of $1 million, increase royalty payments under the agreement during
the
final 12 months of the patent term, and increase the specified minimum
royalty amounts.

Corporate Updates

Senior Management Update - As announced on September 28, 2009, the company's
board of directors appointed chairman of the board Harry F. Hixson, Jr., Ph.D.
and director Ronald M. Lindsay, Ph.D. to serve as interim chief executive
officer and interim senior vice president of research and development,
respectively.

Paul V. Maier has been appointed interim chief financial officer, effective
November 10, 2009. Mr. Maier brings financial executive experience in roles
from small private companies to Fortune 500 organizations, including nearly 15
years at Ligand Pharmaceuticals as senior vice president and chief financial
officer. Prior to Ligand Pharmaceuticals, Mr. Maier spent six years in various
management and finance positions at ICN Pharmaceuticals.

Note to Investors
As previously announced, Sequenom will hold a conference call to discuss the
third quarter and nine-month financial results today, November 9, 2009,
beginning at 1:30 p.m. Pacific Time. You can listen to this call by dialing
1-800-299-9086 for domestic callers or 1-617-786-2903 for international
callers, and entering passcode 72106407. Those interested in listening to the
conference call live via the internet may do so be visiting
http://ir.sequenom.com.

About Sequenom Center for Molecular Medicine
In 2008, Sequenom acquired a CAP accredited and CLIA-certified molecular
diagnostic laboratory located in Grand Rapids, Mich. and named it the Sequenom
Center for Molecular Medicine. Through this laboratory, the company plans to
develop and commercialize a full range of cutting-edge diagnostic tests
intended for physicians and that focus primarily on women's health. In
addition to the recently launched SensiGene Cystic Fibrosis Carrier Screening
test, Sequenom CMM is also developing noninvasive prenatal tests using a
technology that derives fetal information from a maternal blood sample; the
planned menu includes tests for fetal RHD genotyping, Fetalxy (fetal sex
determination), and trisomy 21. Other tests may be added later. For more
information please visit http://www.scmmlab.com.

About Sequenom
Sequenom, Inc. (Nasdaq: SQNM) is a life sciences company committed to
improving healthcare through revolutionary genetic analysis solutions.
Sequenom develops innovative technology, products and diagnostic tests that
target and serve discovery and clinical research, and molecular diagnostics
markets. The company was founded in 1994 and is headquartered in San Diego,
California. Sequenom maintains a Web site at http://www.sequenom.com to which
Sequenom regularly posts copies of its press releases as well as additional
information about Sequenom. Interested persons can subscribe on the Sequenom
Web site to email alerts or RSS feeds that are sent automatically when
Sequenom issues press releases, files its reports with the Securities and
Exchange Commission or posts certain other information to the Web site.

SEQUENOM®, AttoSense(TM), SensiGene(TM), and MassARRAY® are trademarks of
Sequenom, Inc. All other trademarks and service marks are the property of
their respective owners.

Forward-Looking Statements
Except for the historical information contained herein, the matters set forth
in this press release, including statements regarding the Company's efforts to
develop, commercialize and launch molecular diagnostic tests, including the
Company's SensiGene Fetal RHD genotyping test, SensiGene Fetalxy( )test and
trisomy 21 test, future growth in adoption of the Company's MassARRAY system
and utilization of system consumables, the benefits of the Company's MassARRAY
Compact 96 system and SensiGene CF Carrier Screening test, and the Company's
ongoing and future clinical studies, are forward-looking statements within the
meaning of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially, including
the risks and uncertainties associated with the Company's ability to develop
and commercialize new technologies and products, particularly new technologies
such as genetic analysis platforms, noninvasive prenatal diagnostics and
laboratory developed tests, reliance upon the collaborative efforts of other
parties, the Company's ability to manage its existing cash resources or raise
additional cash resources, competition, intellectual property protection and
intellectual property rights of others, government regulation particularly
with respect to diagnostic products and laboratory developed tests, obtaining
or maintaining regulatory approvals, the ongoing litigation and other risks
detailed from time to time in the Company's Annual Report on Form 10-K for the
year ended December 31, 2008 and other documents subsequently filed with or
furnished to the Securities and Exchange Commission. These forward-looking
statements are based on current information that may change and you are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. All forward-looking
statements are qualified in their entirety by this cautionary statement, and
the Company undertakes no obligation to revise or update any forward-looking
statement to reflect events or circumstances after the issuance of this press
release.

SEQUENOM, Inc.
Condensed Consolidated Financial Statements - September 2009
(in thousands, except per share data)

Consolidated Summary of Operations - Q3 to September & YTD September

------------------ -----------------
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
==== ==== ==== ====
(unaudited) (unaudited) (unaudited) (unaudited)
Product revenues:
Consumables $5,443 $4,958 $15,363 $14,558
System related 3,671 5,710 10,092 16,911
Services 103 902 1,617 3,450
Research and other 3 - 5 71
--- --- --- ---
Total revenues 9,220 11,570 27,077 34,990

Costs and expenses:
Costs of product and
service revenues 2,678 4,528 9,227 14,662
Research and
development expenses 8,479 7,083 27,486 18,381
Selling and marketing
expenses 5,914 5,860 20,167 17,999
General and
administrative
expenses 6,724 4,843 21,862 12,464
Restructuring 480 - 1,482 -

------ ------ ------ ------
Total costs and
expenses 24,275 22,314 80,224 63,506

Operating loss (15,055) (10,744) (53,147) (28,516)

Interest income and
other, net 282 476 752 1,020
Loss on marketable
securities - (100) (38) (1,171)
------- ------- ------- -------
Loss before incomes
taxes (14,773) (10,368) (52,433) (28,667)
Deferred tax expense (102) (3) (176) (74)
---- --- ---- ---
Net loss $(14,875) $(10,371) $(52,609) $(28,741)
======== ======== ======== ========

Weighted average shares
outstanding, basic and
diluted 61,211 59,115 61,123 50,562

Net loss per
share, basic
and diluted: $(0.24) $(0.18) $(0.86) $(0.57)
====== ====== ====== ======

Consolidated Balance Sheet Information

September 30, December 31,
2009 2008
---- ----
Assets: (unaudited) (audited)
Cash, cash
equivalents and
short-term
marketable
securities $50,083 $98,329
Restricted cash 1,416 1,371
Accounts
receivable, net 7,182 10,642
Inventories, net 9,858 10,631
Other current
assets 3,291 1,311
----- -----
Total current
assets 71,830 122,284
Property,
equipment and
leasehold
improvements, net 12,467 9,195
Long-term
marketable
securities 5,710 5,748
Goodwill 10,007 2,398
Other long-
term assets 1,928 859
----- ---
Total assets $101,942 $140,484
======== ========

Liabilities and
Stockholders' Equity:
Accounts payable $8,102 $8,321
Accrued expenses 6,661 8,170
Deferred revenue 1,950 1,444
Other current
liabilities 398 456
Short-term debt 1,378 647
----- ---
Total current
liabilities 18,489 19,038
Long-term
liabilities 6,218 5,233
Stockholders' equity 77,235 116,213
------ -------
Total liabilities
and stockholders'
equity $101,942 $140,484
-------- --------

SOURCE Sequenom, Inc.

Company, Ian Clements, Ph.D., Sr. Director, Corp. Communications of Sequenom,
Inc., +1-858-202-9000; or Investor Relations, Jody Cain of Lippert/Heilshorn
& Associates, +1-310-691-7100, jcain@lhai.com; or Media Relations, Dan Budwick
of Pure Communications, +1-973-271-6085, both for Sequenom, Inc.