Sequenom to Petition U.S. Supreme Court to Regain MaterniT21 Test Patent

With its sales and margins suffering unrelenting pressure, the beleaguered molecular testing firm Sequenom has decided to petition the United States Supreme Court in an attempt to regain a patent for a genetic test it lost three years ago.

The petition is centered on what has been referred to in laboratory circles as the “540 patent,” in reference to the last three numbers of a patent Sequenom held until 2013 that it applied to its MaterniT21 test. That assay is used to analyze cell-free fetal DNA in a mother’s blood to diagnose genetic conditions.

The U.S. Supreme Court invalidated two patents held by Prometheus Laboratories. Those patents, which used metabolite levels in the bloodstream to guide the dosage levels of certain drugs, merely described a law of nature and a “well-understood, routine, conventional activity.”

The rationale in that case was applied by the courts the following year to invalidate patenting of the use of cell-free fetal DNA for genetic profiling, as its presence was considered to be naturally occurring.

The San Diego-based Sequenom lost at both the district court and appellate court level, with the appellate judges saying last December that they were bound by the Prometheus decision. However, one dissenting judge, Pauline Newman, an appointee of President Ronald Reagan, observed that “the new diagnostic method here is novel and unforeseen, and is of profound public benefit.” Judge Richard Linn, an appointee of President Bill Clinton, said he only went along with the majority because of the sweep of the Prometheus case, suggesting that some guidance as to how it should be applied in the future may be in order.

As a result, Sequenom is essentially asking the High Court to narrow the scenarios in which the rationale from Prometheus may be applied.

“We continue to believe that the groundbreaking techniques embodied in the ‘540 patent’ are eligible for patent protection,” said Sequenom Chief Executive Officer Dirk van den Boom, in a statement. “More broadly, we believe our case provides a compelling opportunity for the Supreme Court to clarify patent eligibility criteria to protect the significant investments made by Sequenom and other life science organizations that have undoubtedly advanced the standard of patient care and treatment, as well as encouraging future such investments.”

Whether or not the Supreme Court would take the case remains to be seen; it only grants hearings for a tiny minority of petitions that are presented. A 2013 case it decided, Association for Molecular Pathology v. Myriad Genetics, invalidated a patent Myriad tested for the BRCA gene, suggesting that it is likely to hew to a fairly narrow path as to what kind of testing is patentable. As a result of the Myriad case, BRCA testing’s price dropped from about $4,000 to less than $1,000 as other laboratories began offering similar assays. Myriad initially reported a drop in revenue, but has since made it up with other testing lines.

In calendar 2013, Sequenom had reported a nearly tripling of revenue from 2012 to $119.6 million. Revenue reached $148.6 million in 2014 and Sequenom broke into the black. Last year, revenue declined to $119.8 million while the company reported a loss of $16.3 million.

In January, Sequenom announced a restructuring that included the planned divestment of its laboratory in North Carolina. The company’s stock price, which in 2008 traded for more than $26 a share, has dropped by two-thirds in the past 10 months to about $1.50 a share in recent trading.

Takeaway: Under significant financial pressure, Sequenom is taking a lastditch approach with the U.S. Supreme Court in an attempt to gain more market control over its cell-free fetal DNA assays.