Monday, September 28, 2009

Sequenom (SQNM) Fires CEO Harry Stylli after Investigation, CFO Resigned Friday

The drama never ceases at Sequenom (SQNM); tonight there appears to be a purging of upper management after investigations into what went wrong with the company's Down Syndrome's test. [Apr 29, 2009: Sequenom Bombshell] After *that* revelation (and stock plunge from $15 to $3s) speculators have returned to the name (along with many other $1-$2-$3 type of stocks in the healthcare field) [Jun 9, 2009: Sequenom Up 55% Since Noon] ... it's all fun and games until someone loses an eye. Or the stock drops 50% in after hours as it has done (again).

As for myself, I have no idea what Sequenom does or does not have at this point - no one does; not even the company.... the same view I held once the last drama unfolded.

We are no longer relying on, and the public should no longer rely on, any of our previously announced test data and results for our noninvasive prenatal test for [Down's Syndrome]," Sequenom said in a regulatory filing.

But as you know, fundamentals mean little nowadays - as long as a piece of paper is trading, it can be gamed for profit. (AIG, Lehman Brothers) One can make a lot of money in this market buying just about anything and just partying with Ben Bernanke's flood of money, but much of the party is rooted in things that have little to do with fundamentals. And I'm sure as I look at Sequenom trading just over $3 in after hours, the speculators will be back soon enough driving the stock up for no good reason other than money is free and our Fed chairman is happy to provide the punch. After all the stock gained 100% in 6 months on nothing more than "hope".

Since the stock was up 3% today, I suppose the resignation of the CFO last Friday did not get leaked. Either he was told about the coming canning of his boss and resigned out of protest, or the stink is a lot bigger than it looks on the surface (and that's a lot of stink). CFO's don't resign due to test results manipulated by a few lower level employees.

Via AP:
  • Sequenom Inc. on Monday forced out four executives and three other employees, including its president and CEO and the executive in charge of research and development, after an investigation into the mishandling of test results for its Down syndrome blood test.
  • Shares of the company plunged on the news, losing $2.86, or 50 percent, to $2.82 in aftermarket trading. The stock shed about three-quarters of its value after the mishandled testing was disclosed, and finished at $5.69 on Monday.
  • The company said it terminated the employment of Harry Stylli and Elizabeth Dragon, who had been senior vice president for research and development. The terminations are effective immediately, and Stylli was asked to resign from the board of directors.
  • The genetic analysis test maker said Chief Financial Officer Paul Hawran resigned on Friday, as did one other unnamed executive. The moves followed an investigation by a committee of independent directors.
  • Stylli had been Sequenom's president and CEO since June 2005, while Dragon joined the company in May 2006. Hawran became CFO in April 2007.
  • "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.
  • Sequenom said Harry Hixson Jr., 71, a member of its own board and a former president and chief operating officer of Amgen Inc., will take over as interim CEO.
  • On April 29, Sequenom said study data and results for the SEQureDx Down test could not be relied on due to "employee mishandling." SEQureDx appeared to be a promising test that was faster, cheaper, less invasive and less risky than other methods, like amniocentesis. Its results in preliminary studies were close to perfect.

[Jun 2, 2009: CBSMarketwatch - Can Sequenom Make it Back into Investors Good Graces?]
[Mar 19, - Sequenom Mulls Change to Down Syndrome Test]
[Feb 12, 2009: Sequenom Misses [Again] on Earnings]
[Feb 10, 2009: Sequenom on Front Page of Toronto Globe & Mail]
[Feb 4, 2009: Sequenom Restates Results]
[Jan 29, 2009: Sequenom Results Good]
[Jan 14, 2009: Some Muss and Fuss over at Sequenom]
[Dec 31, 2008: Sequenom Continues to Pick up Recognition]
[Dec 18, 2008: Sequenom in Investors Business Daily]
[Oct 30, 2008: Sequenom Misses But We Don't Really Care]
[Oct 7, 2008: Sequenom Down 8% on "Competition" Threat]
[Sep 23, 2008: Sequenom - All Systems Go on Down Syndrome's Test]
[Aug 13, 2008: Beginning Stake in Sequenom]

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