CASES
Sequenom, Inc.
Class Period: Jun 4, 2008 to Apr 29, 2009
Lead Plaintiff Deadline: Jun 30, 2009 + Deadline passed
Summary of Case:
On May 11, 2009, Scott+Scott LLP filed a securities class action against Sequenom, Inc. (Ticker: SQNM) ("Sequenom" or the "Company") and certain officers and directors, on behalf of all common stock purchasers from June 4, 2008 through April 29, 2009 (Class Period), including those who purchased in Sequenom's July 1, 2008 offering priced at $15.50 per share.
The complaint alleges that, during the Class Period, Sequenom, a genetic diagnostics company, made materially false and misleading statements regarding the clinical performance of the Company's developmental Down syndrome screening test. After repeated announcements by Sequenom to its investors touting positive clinical results, the Company shocked the market when, on April 29, 2009, after the market closed, the Company issued a press release announcing that it was suspending the expected launch of its Down syndrome screening test, SEQureDx, due to the Company's mishandling of R&D test data. As a result, the Company stated that the clinical results reported to investors could no longer be relied upon.
As the market reacted to this disclosures, Sequenom's stock collapsed over $11 per share overnight, closing at $3.62 per share the following day -- a one-day decline of more than 75%, on volume of more than 88 million shares.
Indeed, the complaint alleges, it became clear at the end of the Class Period that Sequenom misinformed the investing public that (a) the data being collected in R&D testing of SEQureDx was reliable; (b) the product's testing process was effective and the Company was exercising the requisite control over access to and accountability for the data being gathered; (c) SEQureDx could identify the extra copy of genetic material on the 21st chromosome needed to predict Down Syndrome with the level of accuracy being claimed; (d) the June 2009 product release was based on reliable data; and (e) the Company's financial reports and projections, which were heavily reliant upon a June 2009 launch of SEQureDx Technology, were accurate. Because the misinformation disseminated by the Company, Sequenom stock traded at artificially inflated prices during the Class Period, reaching a high of $27.76 per share on September 24, 2008. This inflated stock price permitted Sequenom to raise the $92 million in the July 1, 2008 follow-on stock offering, acquire a diagnostic company for fewer shares of Sequenom stock than would have been necessary absent the inflation and commence a stock-based tender offer for another company.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.