We are a diagnostic testing and genetics analysis company committed to providing products, services, diagnostic testing, applications and genetic analysis products that translate the results of genomic science into solutions for biomedical research, translational research, molecular medicine applications, and agricultural, livestock, and other areas of research. Our development and commercialization efforts in various diagnostic areas include non-invasive prenatal diagnostics, oncology, infectious diseases, and other disorders.
Our proprietary MassARRAY system, comprised of hardware, software applications, consumable chips and reagents, is a high performance (in speed, accuracy and cost efficiency) nucleic acid analysis platform that quantitatively and precisely measures genetic target material and variations. Our platform is widely accepted as a leading high-performance DNA analysis platform for the fine mapping genotyping market and is gaining traction in newer developing markets, such as epigenomics and clinical microbiology. Our customers include premier clinical research laboratories, bio-agriculture, bio-technology and pharmaceutical companies, academic institutions, various government agencies worldwide, as well as our CLIA certified lab, Sequenom Center for Molecular Medicine. To provide customer support for our expanding user base and in an effort to maximize market penetration, we have established direct sales and support personnel serving North America, Europe, India, Australia and Asia, in addition to regional distribution partners in France, Israel, Russia, Eastern Europe, South Korea, New Zealand, Singapore, Taiwan, Kuwait, Saudi Arabia and Turkey.
We are researching, developing and pursuing the commercializion of various non-invasive molecular diagnostic tests for prenatal genetic disorders and diseases, oncology, infectious diseases, and other diseases and disorders. We have branded our diagnostic technology for prenatal diagnostics under the trademark SEQureDx. Our efforts in molecular diagnostics are focused on non-invasive diagnostics currently using our proprietary MassARRAY system, however, we may in the future employ other platforms with our applications as may be more suitable on a case-by-case basis considering optimum test performance and commercialization factors.
Currently, we are primarily focused on developing and commercializing prenatal screening and diagnostic tests using our non-invasive, circulating cell-free fetal (ccff) nucleic acid based assay technology, which is non-invasive to the womb, using a simple maternal blood draw, for prenatal diagnosis, in order to provide more fundamental and reliable information about the fetus early in pregnancy. Our planned screening and diagnostic tests in areas of women’s health, oncology, and infectious disease are also non-invasive and are expected to use simple blood draws from patients rather than invasive procedures such as surgery.
Supporting our initiatives in women’s health, oncology and infectious disease, in January 2009, we entered into an agreement for the acquisition of the complete AttoSense portfolio of gene-based molecular tests and related assets from SensiGen LLC. The acquisition includes highly-sensitive and specific tests for the detection and monitoring of human papillomavirus (HPV) (the primary cause of cervical and head and neck cancers), systemic lupus erythematosus (Lupus), chronic kidney disease (CKD), inflammatory bowel disease (IBD) and other tests, all of which utilize our proprietary MassARRAY platform. This acquisition was completed in February 2009.
We plan to launch through our CLIA laboratory a non-invasive prenatal screening LDT test for Rhesus D and a carrier screening test for Cystic Fibrosis during the second quarter of 2009; a non-invasive prenatal screening LDT test for trisomies (Trisomy 21 and potentially Trisomies 18 and 13) in June 2009; and a non-invasive prenatal screening LDT test for gender-linked disorders (our Fetalxy screen) during the fourth quarter of 2009. Concurrent with our LDT commercialization activities, we plan to conduct the development, validation, and other activities necessary to file submissions with the Food and Drug Administration (FDA) seeking approval for selected diagnostic tests. We plan to file submissions with the FDA for our prenatal trisomy tests and Rhesus D genotyping in 2010.
Our MassARRAY technology is accepted as a leading high-performance DNA analysis system for the fine mapping genotyping market. We derive revenue primarily from sales of our MassARRAY hardware, software and consumable products. Our standard MassARRAY system combines the following basic components, which contributes to the high level of performance in terms of speed, accuracy and cost efficiency:
•a MALDI-TOF mass spectrometer, which uses an established analytical method that we have adapted for DNA analysis;
•proprietary biochemical reagents for sample preparation, coated silicon chips known as the SpectroCHIP®, liquid handling hardware to prepare DNA for analysis, and dispensing hardware to dispense analyte onto the SpectroCHIP carrier; and
•bioinformatics software that records, calculates, and reports the data generated by the mass spectrometer.
Our MassARRAY system provides reliable results for a wide range of DNA/RNA analysis applications including single nucleotide polymorphism, or SNP, genotyping detection of mutations, analysis of copy number variants and other structural genome variations, quantitative gene expression analysis, quantitative methylation marker analysis, comparative sequence analysis of haploid organisms, SNP discovery, and oligonucleotide quality control. These applications are provided through proprietary application software that operates on the MassARRAY platform and through the purchase of consumable chips and reagent kits. While the MassARRAY system is versatile across many applications, it is a robust and cost-effective genotyping solution for fine mapping projects enabled through our iPLEX multiplexing assay reagents and chips which permits multiplexed SNP analysis using approximately the same amount of reagents and chip surface area as is used for a single sample analysis.
Our research and development efforts in genetic analysis are committed to producing new and improved components and applications for the MassARRAY system that deliver greater system versatility and excellent data quality at a competitive price per data point. These research and development activities and new applications also facilitate and support our diagnostics initiatives.
We have targeted customers conducting quality genotyping and performing fine mapping studies, candidate gene studies, comparative sequencing, gene expression analysis, and epigenetic analysis in the molecular medicine market. Epigenetic analysis is an important part of cancer and other research areas. DNA methylation analysis is the most frequently studied epigenetic change, and examines changes in the presence or absence of methyl groups in specific areas of the DNA.
We are targeting customers for our genetic analysis technology and products across four segments: biomedical research and molecular medicine; oncology and translational research; clinical research, public health and biodefense; and agriculture and livestock. We believe the market and opportunities for growth for fine mapping genotyping are increasing as more researchers are completing their larger genomic studies such as whole genome scans. Epigenetic analysis is an emerging market that, along with gene expression analysis, is increasingly being utilized by researchers in conjunction with genotyping to attempt to fully understand genetic cause and effect.
As of December 31, 2008, our revenues consisted of sales of MassARRAY hardware, software, consumables, maintenance agreements, and from services contracts through our genetic analysis contract research services business. We expect revenues from molecular diagnostics through out-licensing and commercialization of our non-invasive prenatal diagnostics technology, including technology for Rhesus D incompatibility using a real-time polymerase chain reaction platform, to be minimal for the foreseeable future. To the extent that revenues are realized from our molecular diagnostic tests, including non-invasive prenatal diagnostics technology or from our prior disease gene discoveries, if at all, they may fluctuate significantly as revenues will be based upon the occurrence of certain milestones, our reliance upon and the progress made by our collaborative partners, successful product development and commercialization, and product demand, all of which are uncertain and difficult to predict. As a result, our entitlement to, and the timing and amounts of, any revenues from molecular diagnostic products licensing and milestone payments and royalty or revenue sharing payments on future diagnostic or other product sales are uncertain and difficult to predict. To achieve such revenues we will likely be dependent upon the efforts, resources and success of present and future collaborators and licensees who may need to invest significant dollar amounts in research and development efforts, commercialization efforts, clinical trials, and obtaining regulatory approvals over several years.
We have a history of recurring losses from operations and have an accumulated deficit of $526.3 million as of December 31, 2008. Our capital requirements to sustain operations, including research and development projects, have been and will continue to be significant. As of December 31, 2008, we had available cash and cash equivalents and current marketable securities totaling $98.3 million and working capital of $103.2 million.
On July 1, 2008, we closed an underwritten public offering of our common stock totaling 5,500,000 shares of our common stock at $15.50 per share, with the underwriters exercising their option to purchase an additional 825,000 shares on July 8, 2008. Including the additional shares, the offering resulted in aggregate net proceeds of approximately $91.8 million after deducting underwriting discounts, commissions and estimated transaction expenses.
During 2007, we closed a $20.0 million registered direct offering of our common stock to several new and existing investors, as well as a $30.5 million private placement of our common stock. Under the terms of the registered direct offering we issued and sold 6,666,666 shares of our common stock at $3.00 per share, with aggregate net proceeds of approximately $18.3 million after deducting placement agents’ fees and transaction expenses. Under the terms of the private placement we issued and sold 3,383,335 shares of our common stock at $9.00 per share, with aggregate net proceeds of approximately $28.1 million after deducting placement agents’ fees and estimated transaction expenses.
As of February 2, 2009, we employed 248 persons, of whom 48 hold Ph.D. or M.D. degrees and 47 hold other advanced degrees. Our success will depend in large part upon our ability to attract and retain employees. We face competition in this regard from other companies, research and academic institutions, government entities, and other organizations.