1076481--3/16/2010--SEQUENOM

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If we fail to obtain the capital necessary to fund our operations, our financial results, financial condition and our ability to continue as a going concern will be adversely affected and we will have to delay or terminate some or all of our product development programs. Uncertainty regarding our Trisomy 21 test and other planned tests could materially adversely affect our business, financial condition and results of operations. We and certain of our former and current executive officers and directors have been named as defendants in litigation that could result in substantial costs, divert management s attention and otherwise result in dilution to our stockholders. We are the subject of an investigation by the SEC and have been contacted by representatives of NASDAQ, the Office of the U.S. Attorney for the Southern District of California and the FBI, each of which could adversely affect our reputation, business prospects, operating results, or financial condition. We may not be able to generate significant revenue from noninvasive prenatal diagnostic tests or any other tests we may develop. Our operating results may fluctuate significantly. A reduction in revenues from sales of MassARRAY products would harm our business. Our revenues are subject to risks faced by our customers and potential customers. We depend on sales of our consumable chips and other MassARRAY consumables for a significant portion of our revenues. We only recently acquired our CLIA certified laboratory and have limited experience operating a diagnostic laboratory. Our ability to successfully develop and commercialize diagnostic tests will depend on our ability to successfully operate our CLIA certified laboratory and obtain and maintain required regulatory approvals. We may not successfully obtain regulatory approval of any noninvasive prenatal or other diagnostic product or other product which we or our licensing or collaborative partners develop and we may not be able to successfully partner with CLIA certified laboratories with respect to diagnostic products. The results of preclinical studies and completed clinical trials are not necessarily predictive of future results, and our current diagnostic product candidates may not have favorable results in later studies or trials. Because we exclusively licensed our noninvasive prenatal diagnostic and gender determination testing rights from Isis any dispute with Isis may adversely affect our ability to develop and commercialize diagnostic tests based on these licensed rights. We and our licensees and collaborators may not be successful in developing or commercializing diagnostic products, diagnostic assays including noninvasive prenatal diagnostic products, or other products using our products, services, or discoveries. Our ability to compete in the market may decline if we lose or do not obtain some of our intellectual property rights. Claims by other companies that we infringe their intellectual property rights or that patents on which we rely are invalid could adversely affect our business. The rights we rely upon to protect the intellectual property underlying our products may not be adequate, which could enable others to use our technology and reduce our ability to compete with them. We have a history of generating a large percentage of our revenue at the end of each quarterly accounting period. If our customers are unable to adequately prepare samples for our MassARRAY system, the overall market demand for our products may decline. The sales cycles for our products are lengthy, and we may expend substantial funds and management effort with no assurance of successfully selling our products or services. We may not be able to successfully adapt or maintain our products for commercial applications. We have limited commercial production capability and experience and may encounter production problems or delays, which could result in lower revenue. We depend on third-party products and services and limited sources of supply to develop and manufacture our products. If the validity of the consents from volunteers were to be challenged, we could be forced to stop using some of our resources, which would hinder our gene discovery outlicensing efforts and our diagnostic product development efforts. If we cannot obtain licenses to patented SNPs and genes relevant to our diagnostic areas of interest, we could be prevented from obtaining significant revenue or becoming profitable. If the medical relevance of SNPs is not demonstrated or is not recognized by others, we may have less demand for our products and services and may have less opportunity to enter into diagnostic product development and commercialization collaborations with others. We may not be able to form and maintain the collaborative relationships or the rights to third-party intellectual property and technologies that our business strategy requires and such relationships may lead to disputes over technology rights or product revenue, royalties, or other payments. If we do not succeed in obtaining development and marketing rights for products developed in collaboration with others, our revenue and profitability prospects could be substantially harmed. Ethical, privacy, or other concerns about the use of genetic information could reduce demand for our products and services. If we breach any of the terms of our license or supply agreements, or these agreements are otherwise terminated or modified, the termination or modification of such agreements could result in our loss of access to critical components and could delay or suspend our commercialization efforts. We may not successfully integrate acquired businesses and may not successfully complete the acquisition of businesses or technologies that we desire to acquire. We may not be able to successfully compete in the biotechnology and diagnostic industries. We may potentially compete with our customers, which may adversely affect our business. If we cannot attract and retain highly-skilled personnel, our growth might not proceed as rapidly as we intend and our business may be adversely affected. If we do not effectively manage our business as it evolves, it could affect our ability to pursue opportunities and expand our business. Certain of our molecular diagnostic tests may not be eligible for reimbursement by payors which may limit the demand for these tests by physicians and their patients. We may incur additional financial risk related to collections and reimbursement in connection with the commercialization of our molecular diagnostic tests. We must be in compliance with security and privacy regulations under the Health Insurance Portability and Accountability Act of 1996, or HIPAA, and other state regulations, which may increase our operational costs. We are subject to risks associated with our foreign operations. If our production and laboratory facilities are damaged, our business would be seriously harmed. Responding to claims relating to improper handling, storage or disposal of hazardous chemicals, and radioactive and biological materials which we use could be time consuming and costly. We may not have adequate insurance if we become subject to product liability or other claims. The uncertainty of the current economic and political conditions could harm our revenues and operating results. Our stock price has been and may continue to be volatile, and your investment could suffer a decline in value.

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1076481--3/16/2010--SEQUENOM_INC