San Diego-based Sequenom Inc. today forced out its CEO and three other executives, including its research and development chief executive, after an in-house investigation into the mishandling of test results for its potentially breakthrough blood test for Down syndrome, the Associated Press is reporting.
The company, according to the AP story, fired CEO Harry Stylli, and Elizabeth Dragon, senior vice president for research and development. Sequenom’s chief financial officer Paul Hawran and an unnamed executive resigned on Friday. Three lower-level employees were also fired.
The news caused shares of the company to plunge 44 percent — from $5.69 to $3.21 — in after hours trading Monday. Shares have been as high as $29.14 during the past year.
From the AP story:
“While each of these officers and employees has denied wrongdoing, the special committee’s investigation has raised serious concerns, resulting in a loss of confidence by the independent members of the company’s board of directors in the personnel involved,” the company said in a statement.
The company did not say that any deliberate wrongdoing was discovered, but in a filing with the Securities and Exchange Commission, it said it did not put adequate protocols and controls in place. Some employees were not adequately supervised, it said.
Sequenom acknowledged on April 29 that employees had mishandled trial data on the test, which, because it is far less invasive than amniocentesis, could revolutionize how pregnant women are tested for the presence of Down syndrome in their babies.
As we chronicled in May, stock analysts and other industry watchers were shocked not only with the news that data had been mishandled, but also with the way the company managed the fallout. Since Sequenom’s April admission, several class action lawsuits have been filed against the company on behalf of shareholders.