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Executives

Harry Hixon – Chief Executive Officer & Chairman of the Board

Paul Maier – Chief Financial Officer

Ron Lindsay – Executive Vice President of Research & Development

Ian Clements – Head of Investor Relations and Corporate Communications

Analysts

Elmer Piros – Rodman & Renshaw

Junaid Husain – Soleil Securities

Kevin Degeeter – Ladenburg Thalmann

Kelly

Sequenom, Inc. (SQNM) Q3 2010 Earnings Call November 4, 2010 4:30 PM ET

Operator

Good day, ladies and gentlemen, and welcome to the Q3 2010 Sequenom Earnings Conference Call. My name is Tony and I’ll be your coordinator for today. (Operator instructions.) As a reminder, this call is being recorded for replay purposes. I would now like to hand the call over to your host for today, Mr. Ian Clements, Head of Investor Relations and Corporate Communications. Please proceed, sir.

Ian Clements

Thanks, Tony, and good afternoon everybody. With me today are Dr. Harry Hixon, Chief Executive Officer and Chairman of the Board, and Mr. Paul Maier, Chief Financial Officer. We’ll be joined by Dr. Ron Lindsay, Executive Vice President of Research & Development for the Q&A section.

Earlier this afternoon, Sequenom issued a news release announcing the company’s results for the Q3 and first nine months of 2010. If you’ve not received this news release, or if you’d like to be added to the company’s distribution lists, please call investor relations at the company or you can sign up through the IR section of the company’s website: ir.sequenom.com. Copies of news releases and SEC filings can also be found in the IR section of our website.

Before we begin I’d like to inform you that this call will include a discussion of Sequenom’s current plans and intentions regarding product development and launches, expectations regarding Sequenom’s financial resources and other forward-looking statements. I’d like to emphasize that these remarks are based on the information available to Sequenom today and subject to various risks and uncertainties, including the risks described in the company’s SEC filings. The company’s actual results may differ materially from the statements made during today’s conference call, and the company undertakes no obligation to update any of these statements.

From an investor communications perspective, we will be presenting an overview of the company at two meetings in November. On November 16th we will present at the Lazard Capital Markets Healthcare Conference, and on November 17th we will present at the Stephens Fall Conference. Both of these events will take place in New York City. A webcast of these presentations will be accessible through the investor relations section of our website.

With that said I would now like to turn the call over to Harry Hixon. Harry?

Harry Hixon

Thanks, Ian, and my thanks to each of you for joining us today. During today’s call I’d like to spend some time discussing our recent achievements and to give you an overview of our business. Paul will then follow with an update on the quarter’s financial results that were released today. I will then conclude with some additional highlights from the quarter and then focus on key upcoming milestones and events.

The Q3 was once again a busy and productive period for Sequenom. Our core genetic analysis business continued to show steady growth, and the launch of our next generation MassARRAY Analyzer IV, which is intended for research use only, has been well received by our customers. During this quarter we placed a total of 11 instruments but which ten were MassARRAY Analyzer IV systems.

The Sequenom Center for Molecular Medicine, or Sequenom CMM laboratory, currently offers two laboratory-developed tests, or LDTs. Sales of the SensiGene Fetal RHD Genotyping Test, which is based on our proprietary SEQure DX technology, have been disappointing relative to our expectations. However, we continue to see good market acceptance of the SensiGene Cystic Fibrosis Carrier screening test. With the recent introduction of buckle swabs as an alternative collection method, we expect continued penetration in this market.

We made a decision at the end of the Q3 to make some changes in our Sequenom CMM diagnostic sales force. Due to the underperformance of some sales territories we decided to remove a layer of sales management and reduce the number of sales representatives. Additionally, in October we terminated our relationship with the contract sales organization that we had been using for part of our diagnostic sales force. We believe that the size and structure of our sales force is now better aligned with the opportunities for the testing services currently offered through Sequenom CMM. Furthermore, we plan on training these sales representatives on the age-related macular degeneration LDT or AMD product so they can assist with the AMD testing service launch anticipated in the first half of 2011.

I’m delighted to report that we completed our San Diego Sequenom CMM laboratory in September. The laboratory was inspected by the California Department of Public Health in October and was found to be in compliance with all applicable statutes and regulations for clinical laboratories. Subsequently a recommendation for license approval was made and we are awaiting issuance of a California clinical laboratory license. During the coming months, Sequenom CMM will be submitting the necessary application to the College of American Pathologists, or CAP, in order to attain CAP accreditation for the San Diego laboratory.

You may recall that we received a letter in July from the US Food & Drug Administration that referenced the marketing of tests using our SEQure DX technology. A group of senior Sequenom executives, including myself, met with the FDA in September. The meeting focused primarily on whether Sequenom was engaged in any direct to consumer or DTC marketing of LDTs. We told the FDA that all Sequenom CMM LDTs are developed, validated, and used solely by our CLEO-certified, CAP-accredited laboratory. Sequenom CMM tests are not sold directly to the general public but rather samples are ordered by a physician, collected, sent to the laboratory for testing, and the test reports are reported back to the physician. The FDA concluded the meeting, indicating that they had no further questions on the DTC issue. Sequenom and Sequenom CMM have used their best efforts to comply fully and in good faith with the FDA’s laboratory-developed test policy, and we will continue to work with the FDA to ensure compliance as the FDA’s LDT policy evolves.

We have recently made a couple of important additions to the management team. I’m delighted to welcome Robin Weiner to our senior management team as Senior Vice President of Regulatory Affairs and Quality. Robin brings 25 years of regulatory and quality assurance experience and a broad range of diagnostic companies. Prior to joining Sequenom, Robin acted as a consultant to numerous biotechnology companies. Prior to her role as a consultant, Robin was Vice President of Regulatory and Government Affairs at Biocyte, Inc. As we expect to have more frequent and detailed discussions with the FDA in the future, Robin will be playing a critical role in the company.

As we embark on building our ophthalmology diagnostics franchise, I’m also pleased to welcome the addition of Dr. Laura Pearlie as Vice President of Ophthalmology Business Development. Laura has twenty years of experience in the biotechnology industry. Prior to joining Sequenom, Laura was Vice President of Diagnostics at Optherion, Inc., directing the internal AMD thera-nostic program.

With that update on our operations I will now ask Paul to address our Q3 and nine month financial results. Paul?

Paul Maier

Thanks, Harry, and good afternoon everyone. First I will address the financial results for the Q3. We reported total revenues for the three months ended September 30th of $11.7 million as compared to $9.2 million for the Q3 of 2009. The increase from the prior year was due to higher consumables and systems sales. We recognized diagnostic revenue of $687,000 in the Q3. Diagnostic revenue for the quarter was derived from Sequenom CMM’s two marketed, SensiGene-branded laboratory developed tests, namely the fetal RHD genotyping test, which we launched in February of this year, and the cystic fibrosis carrier screening test launched in September, 2009.

Cost of product and services revenue for the Q3 of 2010 was $4.1 million compared with $2.7 million for the Q3 of 2009. Gross margin was 65% for the Q3 of 2010 and that compared with 71% in the Q3 last year. Gross margin was primarily effected by the inclusion of costs associated with the startup of the diagnostic business and changes in product mix in the genetic analysis business. Research & development expenses were $11.3 million for the Q3 of 2010 compared with $8.5 million for the same period in the prior year. R&D expense growth for the 2010 Q3 consisted primarily of assay development and clinical sample acquisition costs associated with the company’s Trisomy 21 or T-21 program. Selling, general & administrative expenses of $12.2 million for the Q3 of 2010 decreased from $12.6 million for the Q3 of the prior year. The decrease was primarily due to a decrease in legal expenses, lower share-based compensation expense, and salary expenses offset primarily by increases in selling expenses related to headcount and bonus plans. Total costs and expenses for the quarter were $34.6 million compared with $24.3 million for the comparable quarter in 2009.

For the three months ended September 30, 2010 and 2009, the company recorded $2.5 million and $3 million respectively of stock-based compensation expense. As I will discuss in more detail in a moment, this increase in expenses and thus net loss was driven in large part by recognition of a non-cash charge of $7 million related to the appreciation and value of the shares to be issued in the settlement of class action litigation which was filed in 2009. Our net loss for the Q3 of 2010 was $22.7 million, or $0.30 per share, compared with a net loss of $14.9 million, or $0.24 per share for the same quarter in 2009.

Now turning to the year to date results. Total revenue for the first nine months of 2010 totaled $33.7 million, compared with $27.1 million, a 24% increase for the first nine months of 2009. Cost of product and services revenues for the first nine months of 2010 was $13.8 million compared with $9.2 million reported for the first nine months of 2009. Gross margin for the first nine months of 2010 was 59% compared to 66% for the first nine months of 2009. Total costs and expenses for the first nine months of 2010 were $132.6 million versus $80.2 million for the comparable period in 2009.

For the nine months ended September 30, 2010 and 2009, the company recorded $7.7 million and $9.2 million respectively of stock based compensation expense. Net loss for the first nine months of 2010 was $98.8 million or $1.44 per share compared with $52.6 million, or $0.86 per share for the comparable period in 2009. As of September 30, 2010, Sequenom has total cash, cash equivalents, and short-term marketable securities of $55.8 million.

Now, before turning the call back over to Harry, I would like to comment on the charges we took in litigation settlement expense in the Q3 of 2010. Litigation settlement expense net was $7 million and $48.8 million for the three and the nine months ending September 30, 2010 respectively compared to $0 in the same period in 2009. The charge of $7 million was related to the revaluation of our settlement for the approximately 6.4 million shares that remain issuable to the members of the plaintiff’s class, to the fair value of $7.01 per share which was our share price as of September 30, 2010. During the Q2 of 2010 we initially recorded a charge of approximately $42.8 million related to the original share settlement of approximately 6.8 million shares, offset by a recognized aggregate gain of approximately $2.5 million due to the revaluation to fair value for the portion of the approved share settlement issued to plaintiff’s counsel and the revaluation to fair value for the remaining shares issuable to the members of the plaintiff’s class as of June 30th, 2010. Subsequent additional adjustments to the equity-based portion of the settlement will be recorded as a gain or a loss depending on fluctuations in the fair market value of our common stock until the remaining approximately 6.4 million shares are issued.

For the Q3, if this $7 million charge were backed out of the P&L statement, our loss and loss per share calculation non-GAAP would change to reflect a loss of approximately $15.7 million and a loss per share of $0.21. For the nine months ended September 30th, the same calculation would reflect a non-GAAP loss of $50 million and a loss per share of $0.73. You can find a reconciliation of these non-GAAP financial measures on the IR section of our website, ir.sequenom.com. With that said I’d like to turn the call back over to Harry. Harry?

Harry Hixon

Thanks, Paul. Sequenom CMM scientists have been busy on the various development aspects of the Trisomy 21 test. We announced last week that four poster presentations would take place this week at the American Society of Human Genetics Meeting in Washington. One of these poster presentations shows results from a study using massively parallel shotgun sequencing performed earlier this year on 96 samples. Although this was only a small study the results were encouraging and gave us the confidence to start to plan a larger locked assay study.

I’m delighted to inform you that Sequenom CMM has completed this locked assay study by the end of the Q3 as scheduled. This final stage of the internal verification of the Trisomy 21 test was an important step and is enabling Sequenom CMM researchers to finalize the assay design. The study analyzed 480 plasma samples from pregnant women at increased risk for fetal Trisomy 21. A manuscript describing the results from this study was written and has been submitted to a peer review journal for publication. Thus far, the studies that Sequenom CMM has completed used a luminous GA2x sequencer. The next major step in the Trisomy 21 test development plan is a large pivotal validation study in which Sequenom CMM plans to use the Illumina HiSeq 2000 sequencer. The latter instrument, launched earlier in 2010, offers greater sample throughput.

Sequenom CMM scientists are currently in the process of running equivalency studies on the HiSeq 2000 platform. These steps are important as we want to ensure that Sequenom CMM has completed all of the necessary preparatory steps prior to embarking on this important validation study. In the validation study, we plan to use the samples that have been collected under the auspices of the Women’s and Infant’s hospital in Rhode Island. We anticipate that the total number of samples in this study will be approximately 2000, of which approximately 200 will be T-21 positive samples. Sample collection from the 27 enrolled sites is proceeding well, and we are confident that Sequenom CMM will have the required number of samples to initiate the study later in the Q4 and to complete the study by the end of the Q2 of 2011.

Sequenom CMM is planning to launch the Trisomy 21 LTD by the end of 2011, after the publication of the validation study results by our academic collaborator. We’re also planning to initiate discussions with the FDA regarding the potential regulatory pathway for an in-vitro diagnostic device for Trisomy 21. We have recently submitted a pre-investigational device exception package, or pre-IDE package, to the FDA and we expect to meet with the FDA to discuss our proposed clinical study design early in 2011.

Finally, the development of the LDT for risk of progression of patients already diagnosed with early age-related macular degeneration, or AMD, is progressing well. As announced in our press release on October 14th, I’m delighted we were able to attract three key opinion leaders to join our Ophthalmology Clinical Advisory Board. Sequenom held an AMD focus group meeting at the recent American Academy of Ophthalmology Meeting, where the Clinical Advisory Board, other key opinion leaders, and Sequenom CMM researchers discussed important factors relating to the development of the AMD laboratory developed tests. Sequenom CMM plans to bring the AMD LDT to market by mid-2011.

With that summary of our business and financial update, I would now like to open the call to questions. Operator?

Question and answer session

Operator

Yes, sir. (Operator instructions) Your first question comes from the line of Elmer Piros. Please proceed.

Elmer Piros – Rodman & Renshaw

Hey, good afternoon, gentlemen.

Harry Hixon

Good afternoon.

Elmer Piros – Rodman & Renshaw

Harry, you alluded to the potential of having 200 T-21 pregnancies out of the 2000 samples that you hope to analyze. Was the same or a similar sort of ratio true for the 480 samples in this research study?

Harry Hixon

Approximately, yes.

Elmer Piros – Rodman & Renshaw

So the observation there in terms of the accuracy of the test is assumed to be a fairly robust one, then.

Harry Hixon

Yes.

Elmer Piros – Rodman & Renshaw

Okay, thank you. And of the 2000 samples, how many do you already have in freezers and how many do you still need to collect?

Harry Hixon

I don’t have the exact number in hand, but we’re almost there now.

Elmer Piros – Rodman & Renshaw

Okay. And so essentially once the parallel or essentially the validation or equivalency study with the HiSeq instrument is completed then you can actually get going with the validation study.

Harry Hixon

Yes, that’s our plan.

Elmer Piros – Rodman & Renshaw

Thank you very much. And just in some general terms, if you could perhaps educate us on the AMD market, which I have to admit that I just began to pay attention to. Would you describe or perhaps, Ron, if you could help us understand the market size, the current competitive landscape and where you see how the Sequenom test would fit in there.

Harry Hixon

I want to check to see – Ron Lindsay, are you on the call?

Ron Lindsay

I just got back in again, sorry. I didn’t here the question. Is it Elmer?

Harry Hixon

It’s Elmer, yes. Elmer, perhaps you could repeat the question about AMD for Ron who’s doing this via telephone.

Elmer Piros – Rodman & Renshaw

Yes. Ron, if you could help us to understand your positioning of the tests you’re developing in the AMD landscape and what are some of the competitive tests that are available if there are any? And what is the remaining work that you would have to complete before launch?

Ron Lindsay

Okay. I think the only sizeable external competition is a small company in Canada called Artic VX which has begun marketing a test probably 12, 15 months ago, that includes a small number of the genes that probably are in the same arena as ours and there’s probably some IP issues there. Other than that there are one or two of the bigger labs doing very, very cursory tests, I think just LabCore and Quest. That’s just a two step panel but I think it would carry just a tremendous amount of information. In terms of the things we have to do to finish, we have completed our internal verification studies, so technically the assay works. And we’re proceeding currently with a clinical validation study which we hope to complete by the end of the year in collaboration with some of our academic Scientific Advisory Board members. And we plan to submit that for publication, and when that is published in the first half of next year we will launch the test. So technically the test I think we’re very comfortable with and we have upped the speed in terms of the SCNM component of this, and we’ll simply begin and complete that – the clinical validation – before we launch.

Elmer Piros – Rodman & Renshaw

Have you done any market analysis of how large this potential market is?

Ron Lindsay

Yes. In terms of, there are about 20 million people in the US who have AMD in one form or another and over time, about 15% of those will proceed wet AMD so I think that current number is probably a million or two. And our plans for doing this is really to work with the retinal community and position the test as a risk of individuals who already have AMD progressing to the wet form, as probably most of you know that the dry form is somewhat innocuous in terms of the deposits in the eye. But when you proceed to wet you’ll lose the vision. So the feedback that we’ve had from the retinal community for a test that would indicate who’s at risk of progressing fast will be very useful to them in terms of identifying patients that they should monitor more frequently; and perhaps conversely, the people who have less risk they don’t need to see quite so frequently. So we’ve got a lot of good feedback on that, so that would be our first indication for use.

Harry Hixon

Elmer, this is Harry. We can refer you to the National Eye Institute at the NIH. They have a website that has a lot of this data in the tables. And if you were to go to our posted corporate presentation, on the bottom one of the slides for our AMD explanation, it shows the website for that. But we’re happy to send that to you independently.

Elmer Piros – Rodman & Renshaw

I appreciate that, Harry. And one last, maybe just a couple of questions related to the core business. Before I ask knowledge related questions, Harry, maybe a strategic one. Previously the company made a case that there isn’t a lot of synergy between the diagnostic business and the instrument- and research-focused business. Do you see that perhaps in the future the two would be able to stand alone and perhaps, or have you ever considered spinning off what used to be the core business?

Harry Hixon

Well, as you probably know, Elmer, you’re not the first person who’s asked us that in a serious vein, and we have thought about it, we’ve analyzed it. We continue to believe that there’s significant synergy between the two businesses but it is something we always have in the back of our mind.

Elmer Piros – Rodman & Renshaw

Okay. Now specifically, consumables seem to be improving, they seem to be having sequential growth. What do you attribute this to? Perhaps the new version of the instrument generated more interest, and how is the pricing as opposed to volume demand dynamics working recently?

Harry Hixon

It sounds like several questions. So with respect to consumables, we have a panel of oncology markers called OncoCarta, which has attracted a lot of attention. It has resulted in, has been part of the cause of the increase in our consumerables. It’s also had the beneficial effect of pull through on some instrument placements as well. With respect to pricing, we’ve been able to maintain our original pricing on the MASSArray IV. It’s priced somewhat higher than the previous version of the instrument and we’re pleased with that as well.

Elmer Piros – Rodman & Renshaw

And on consumerable pricing, Harry, if I may push?

Paul Maier

I’ll answer that, Harry – this is Paul. On the consumerables it’s more volume related, and of course our long-term expectation is as we have additional instrument placements and as the fundamental businesses that are our clients, and research institutes that are our clients increase their consumerable usage because they have bigger budgets or they’re exploring new programs, we expect the volume to continue to modestly grow. I think also we’re seeing where there’s basic research use of consumerables, but there’s also the translational medicine use of the instrument and consumerables, and we’re seeing more activity in that space. And I think that’s also another reason for the increase.

Elmer Piros – Rodman & Renshaw

Gentlemen, thanks for taking my questions.

Paul Maier

You’re welcome.

Operator

Your next question comes from the line of Junaid Husain. Please proceed.

Junaid Husain – Soleil Securities

Good afternoon, everyone.

Harry Hixon

Good afternoon!

Junaid Husain – Soleil Securities

Ron or Harry, in the conversation you recently had with the FDA regarding the letter you received from them on the LDTs, did you also discuss maybe in broad strokes your LDT and/or your PMA strategy on T-21? Or are you just saving this conversation for the pre-IDE?

Harry Hixon

Well, I think we can say very clearly we told the FDA that we had plans to launch a T-21 LDT and we also had plans to come to them to submit to them the pre-IDE package that I discussed in our earlier presentation script, and they were very pleased that we were going to come forward with the PMA regulatory package and start discussions with them.

Junaid Husain – Soleil Securities

So in that conversation then, did they give you any hint as to what they were thinking in terms of moving forward with an LDT on T-21?

Harry Hixon

Not of any substance. I think they gave a very clear indication that they were in, the FDA is in active discussions about LDTs and they weren’t going to say much more at this time, or at that time.

Junaid Husain – Soleil Securities

Okay, fair enough. And then with regards to your San Diego CLEO lab ramping up, can you help us understand your lab strategy? You’ve got two CLEO labs now – the one in San Diego, the one in Michigan. One might view this as redundant. Would you call it redundant?

Harry Hixon

No, not at all. The fundamental strategy behind the San Diego CLEO lab was to have the T-21 test, or better still the T-21 test process - from sample acquisition to test reporting out, it is complicated and technically challenging at certain points. And we wanted to have this T-21 CLEO laboratory very close to our research & development expertise. So that’s a primary reason for that. And then primarily the other tests that we’re going to bring on will be brought online through the Grand Rapids CLEO lab. So we’re going to focus this lab here in San Diego on T-21.

Junaid Husain – Soleil Securities

And then Ron, we’ve got the Society for Maternal Fetal Medicine, their annual meeting in February, I believe that’s in San Francisco. Should we expect any of your clinical data to be presented at this medical meeting, perhaps the locked assay study?

Ron Lindsay

I think depending on acceptance of the publication we’ve submitted, that’s certainly a possibility in terms of some use flow. But that’s obviously, we’re very hesitant about publication times in terms of admission and acceptance and so forth. So as you know, we’ve submitted a manuscript for the 450 and we’ll wait and see when that’s completed.

Junaid Husain – Soleil Securities

Gotcha. And then Harry, last question for you. Thanks for the heads up on Robin and her role. Can you tell me – are you adding Robin as a complement to Gary Riordan or has Gary moved on to something else and left the company?

Harry Hixon

Gary got married and moved to the East Coast with his new bride.

Junaid Husain – Soleil Securities

I gotcha. Alright, thanks so much, guys.

Harry Hixon

You’re welcome.

Operator

And your next question comes from the line of Kevin Degeeter. Please proceed.

Kevin Degeeter – Ladenburg Thalmann

Hey, good afternoon, guys.

Harry Hixon

Hi, good afternoon.

Kevin Degeeter – Ladenburg Thalmann

Will we see the dataset that’s going to be run on the HiSeq platform published anywhere or perhaps at a medical meeting next year? Or will the first data we’ve seen that’s actually been run on that platform going to be the Women’s and Infant’s study?

Ron Lindsay

Probably the first result of that will be the Women and Infant’s. I think as Harry mentioned we’re doing a comparison currently between the GA2x and the HiSeq, just to get any little bugs out of the differences. When there’s a different machine, as you know, there’s some small differences. So I’m not sure we’d have to publish anything in between running that and the Women and Infant’s samples.

Kevin Degeeter – Ladenburg Thalmann

Okay, on a related note maybe you can just walk me through the logic perhaps competitive or other factors that drove your decision to submit the manuscript based on the GA2 derived dataset. At that point I think it was pretty clear you were ultimately going to launch on HiSeq. Just maybe to put that issue behind us.

Ron Lindsay

If you- Just remember, the HiSeq was only launched at the beginning of this year but when we started on this project to assess sequencing it was a potential platform; the most experience at that time was with the GA2 system. So that’s what we were planning to go with, and obviously as the HiSeq’s come in, which has both greater capacity in terms of sample throughput but also greater reads per sample, we’ve began to get up to speed on that. But we’d already pretty much committed to doing our 450 on the GA2; by the time the HiSeq became available, as you probably recall, there was a little bit of a backlog between the launch of the instrument and the availability to most customers, which I think was probably late spring. So it’s just purely the chronology of the development and availability of the instrumentation to be honest.

Kevin Degeeter – Ladenburg Thalmann

Terrific. And maybe just one or two quick questions on RHD. You mentioned obviously that launch has been a bit slower and a bit disappointing here. Are there specific things we should look for that perhaps should make that test a meaningful contributor to revenue, and what would sort of the timeline of that be? Or should we really look at the existing portfolio of diagnostics as particularly small-niche products?

Harry Hixon

Well, we believe that the RHD product will eventually do well in the US market. What we need, and we sort of learned from RHD and that’s reflected in our comments about our AMD launch, is we think we need to have a publication that could be used by our sales reps that we can refer to, and we will have that for the RHD product sometime next year. And once again it’s when will journals review, how long does it take them to review; and will they accept and will they publish the results? So we just believe that’ll happen sometime next year and that that’ll have a significant impact on the RHD test.

Kevin Degeeter – Ladenburg Thalmann

So you’ve submitted a manuscript for a dataset pertained to RHD.

Harry Hixon

Not yet.

Ron Lindsay

No, just (inaudible). We are in the midst of and have been for some time collecting samples from two or three different groups around the world indeed for RHD, and it’s been just a little bit slower than we’ve anticipated. But that’s going to be the driver, is the acquisition of samples and then we’ll complete the studies.

Kevin Degeeter – Ladenburg Thalmann

Okay, terrific. And I mean that’s really helpful. And maybe just one last thing on a related topic. Can you just give us a sense of what your footprint on the sales and marketing side is currently or will be once you’ve reallocated some of that sales energy to AMD? What it’ll be into the OB/Gyn’s office? And how do we think about the ramp up, potential ramp up that’ll be needed for the potential launch of T-21?

Harry Hixon

Well, okay – I have to sort of slice all those questions into separate ones. Currently we pared back our sales force, but we are in the midst of our planning cycle for 2011. And I anticipate that we will be adding additional sales representatives to our sales force as part of our 2011 plan, to both address the sales of cystic fibrosis carrier screening and RHD, and also to do the launch of AMD. We haven’t decided exactly how many more sales reps we’re going to add. We have a strategy laid out for our T-21 launch and the number of reps required for that. We’re not ready to discuss that publicly at this time, although I’m pretty confident that that’s a solid strategy. But that’s something that’s likely to occur much late in the year in 2011.

Kevin Degeeter – Ladenburg Thalmann

And just to clarify, how many reps does the company currently have out in the field selling something pertaining to molecular diagnostics?

Harry Hixon

I think we have nine reps and then we have some sales management.

Kevin Degeeter – Ladenburg Thalmann

Terrific. Thanks for taking my questions.

Harry Hixon

You’re welcome.

Operator

Your next question comes from the line of Bruce Cronau (sp). Please proceed.

Kelly

Hi there, guys. This is actually Kelly in for Bruce this afternoon. Thanks for taking the call.

Harry Hixon

Hi Kelly.

Kelly

First off, I know you mentioned the Women’s and Infant’s study, and the 2000 samples we’re likely to see with the 200 high risk patients included in that. What about first and second trimester mix? Has that been discussed?

Ron Lindsay

Yeah, it’s about 50/50. It’s a pretty even mix, I believe. Ian might have that.

Ian Clements

Yeah, 50/50 is roughly the split.

Kelly

And what was the split for the 450-sample study?

Ron Lindsay

I don’t know off the top of my head.

Ian Clements

I don’t know off the top of my head either. I’d have to go back and have a look.

Ron Lindsay

Yeah, it will be in the publication when it’s released, along with all the data.

Kelly

With all the data, okay. And then also looking at the upcoming publication, you had said earlier the sensitivity rates you were aiming for were mid-90% and higher being obviously better. If you’re pushing forward with the next study, is that indicative that the sensitivity rates you’ve received so far are pretty favorable?

Harry Hixon

Well I would say we were extremely pleased with the results and we have, the Women’s and Infant’s samples that we have are extremely valuable. And I think we have in excess of $10 million invested in various T-21 samples. We would not embark on the next validation study if we weren’t very pleased with the results of the 450 study.

Kelly

Okay. And then I guess just also looking forward, I know you had touched upon where we can maybe see the data for the T-21, but what about AMD? Did you say any medical meetings in 2011?

Ron Lindsay

We haven’t specifically announced anything yet. I think I said we’re targeting to submit a manuscript on our clinical validation by the end of this year, the beginning of the Q1 at the latest, and we hope to be able to launch the (inaudible) based on publication of that in the first half of next year.

Kelly

Okay, thanks.

Harry Hixon

You’re welcome.

Operator

Thank you for your questions, ladies and gentlemen. I would now like to hand the call back over to Mr. Harry Hixon for closing remarks.

Harry Hixon

Okay, thank you, Tony. In closing I’d like to thank each of you for joining us today and for your continued interest in Sequenom. I look forward to continuing to update you on the progress we’re making here at Sequenom at upcoming conferences and on future calls. Thank you, bye.

Operator

Thank you for your participation in today’s conference. This concludes the presentation and you may now disconnect. Good day.

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