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© 2014 Sequenom. All rights reserved.
IMPROVING QUALITY OF LIFE THROUGH QUALITY OF SCIENCE
Jefferies 2014 Global Healthcare Conference - NYC
Bill Welch, COO
Carolyn Beaver, CAO
June 3, 2014
© 2014 Sequenom. All rights reserved.
Except for historical information, matters set forth in this presentation, including
statements regarding Sequenom’s plans, potential, opportunities, financial or other
expectations, projections, goals, objectives, milestones, strategies, market growth,
timelines, product pipeline, clinical studies, product development, and the potential
benefits of its products and products under development, are forward-looking
statements within the meaning of the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are subject to risks
and uncertainties that may cause actual results to differ materially, including the risks
and uncertainties associated with Sequenom’s operating performance and financial
position, the market demand for and acceptance of Sequenom’s and Sequenom
Laboratories’ products and services, research, development and commercialization of
new products, reliance upon the collaborative efforts of others, competition, intellectual
property rights, government regulation, obtaining or maintaining regulatory approvals,
litigation, and other risks detailed in Sequenom’s SEC filings. These forward-looking
statements are based on current information that is likely to change, speak only as of
the date hereof, and Sequenom undertakes no obligation to revise or update such
statements.
Forward-looking statements
2
© 2014 Sequenom. All rights reserved. 3
QUALITY OF SCIENCE
At the core of Sequenom’s success in
genetics-based products is a single
uncompromising principle: Quality of Science
Content company: unlocking the
secrets of human genetics
Based in research, translational
research and clinical applications
© 2014 Sequenom. All rights reserved. 4
Sequenom Bioscience Completed sale of business on Friday, May 30
Transaction completed for a purchase price of $31.8 million, subject
to certain adjustments
Contingent consideration of up to an additional $4 million
Assumed certain liabilities related to Bioscience business, including
the lease of its San Diego facility
Buyer is Agena Bioscience, a portfolio company of Telegraph Hill
Partners
Transaction enables the Company to focus on the diagnostics
business exclusively
© 2014 Sequenom. All rights reserved. 5
Sequenom, Inc. Discovery, Develop and Enable
Best-in-class laboratory clinical diagnostic services with a focus on
prenatal testing and conditions.
– San Diego, CA; Grand Rapids, MI and Morrisville, NC
MaterniT21™ PLUS: pioneer, first-to-market and leader in the
noninvasive prenatal laboratory-developed test (NIPT) for pregnant
women at
increased risk for fetal aneuploidies
Among largest US laboratories utilizing next-gen sequencing for clinical
use
© 2014 Sequenom. All rights reserved. 6
Q1 2014 Highlights
Q1 2014
– Sequenom Laboratories revenue up 27%
– Approximately 50,000 tests accessioned including 39,800
MaterniT21™ PLUS samples
Cash burn increased slightly to $15.5 million for Q1 2014 due to
timing of annual royalty of $4.8 million and semi-annual debt
service payments of $3.3 million, compared to cash burn of
$13.6M in Q4 2013
Signed additional agreements, bringing the number of covered lives
to more than 118 million in the US, including two of the top five
national payors
Two additional international license agreements were signed
© 2014 Sequenom. All rights reserved. 7
Sequenom Laboratories revenue up from $46.5M to $119.6M Y/Y,
accounting for 74% of total revenue
– More than 185,000 tests accessioned including 148,500
MaterniT21™ PLUS samples
Reduced cash burn to $13.6M in Q4 2013 from $23.1M in Q3 2013
Expanded technology partnerships utilizing superior technology (IP)
and know-how with license agreements in Germany and France
Clinical permit from the NY Department of Health for MaterniT21
PLUS test. CLIA registration and CAP accreditation for new NC
laboratory
MaterniT21 PLUS Enhanced Sequencing Series introduced in
October
Highlights for 2013
© 2014 Sequenom. All rights reserved. 8
The Science of Performance Sequenom Laboratories Revenue ($M)
3 8
46
120
37
$0
$20
$40
$60
$80
$100
$120
$140
2010 2011 2012 2013 2014 Q1
Sequenom Laboratories
© 2014 Sequenom. All rights reserved. 9
TRADITIONAL PRENATAL TESTING
High-risk pregnancies traditionally
required invasive surgical procedures
High requirement for medical
management and genetic counseling
97% of invasive procedures
have normal results
Invasive testing costly and introduces
additional risk
© 2014 Sequenom. All rights reserved. 10
The key for Sequenom Laboratories
and millions of expectant mothers
A noninvasive laboratory-developed test (LDT) to identify pregnancies
at increased risk for fetal chromosomal abnormalities
© 2014 Sequenom. All rights reserved. 11
THE EVOLUTION OF THE MATERNIT21™ PLUS TEST
The journey began with trisomy 21 in Q4 2011
Included trisomy 18, 13, multiple gestations and
Y chromosome in 2012
Included sex aneuploidies in Q1 2013
Enhanced Sequencing Series was launched in
October 2013 and moves towards content available
by microarray
‒ Dr. Wapner’s paper highlighted value of
microarrays for specific high-risk pregnancies1
‒ ACOG and SMFM endorsed microarray for
high-risk pregnancies2
Premium content will continue to expand
1 New England Journal of Medicine; Chromosomal Microarray versus Karyotyping for Prenatal Diagnosis; December 6, 2012; Volume 367 No. 23
2 ACOG Committee on Genetics Society for Maternal-Fetal Medicine; Committee Opinion Number 581; December 2013
© 2014 Sequenom. All rights reserved. 12
MaterniT21™ PLUS LDT As the market grows, so does the opportunity
US 2007 total births: ~ 4.3M1
Low risk
~3.55M
Market opportunities The % of US pregnancies that are high
risk is rapidly expanding
Low-risk pregnancies represent an
untapped, emerging market but is
currently not supported by guidelines or
being reimbursed by payors
>208M pregnancies each year2 globally
Comparable diagnostics, US High-risk market is a large addressable
market
‒ Greater than the annual newly
diagnosed breast (232,000) & prostate
(239,000) cancers combined 3,4
High risk
~750K
= 100K
pregnant
women
= 100K NIPT
ACOG/SMFM
supported pregnant
women
1 National Center for Health Statistics, National Vital Statistics Reports; www.cdc.gov/nchs
2 Singh S, Sedgh G and Hussain R, Worldwide levels, trends, and outcomes, Studies in Family Planning, 2010 , 41(4):241–250.
3 http://www.cancer.org/cancer/breastcancer/detailedguide/breast-cancer-key-statistics
4 http://seer.cancer.gov/statfacts/html/colorect.html
© 2014 Sequenom. All rights reserved. 13
MaterniT21™ PLUS LDT
Payors enforce compliance
to medical policies on
laboratory tests (do not
reimburse low risk today)
We follow guidelines
established by ACOG1 and
SMFM2 and perform the
test only on women at
increased risk for fetal
chromosomal abnormalities
We are able to demonstrate
to payors that our test
follows the guidelines
1ACOG is the American Congress of Obstetricians and Gynecologists 2SMFM is the Society for Maternal-Fetal Medicine
Indications for use
May 2014
Maternal age Ultrasound finding
Serum biochemical screening Personal or family history
Multiple reasons*
62%
8%
10%
13%
7%
© 2014 Sequenom. All rights reserved.
1.40%
0.43%
0.19%
Normal representation
of trisomy 21, 18 and 13
Positive trisomy 21
Positive trisomy 18
Positive trisomy 13
Results of testing
Updated May 2014
97.98%
Negative
14
MaterniT21™ PLUS LDT Substantially reducing the number of invasive procedures with high-impact data
© 2014 Sequenom. All rights reserved. 15
Sequenom Laboratories test portfolio Growing prenatal franchise
* Other tests (HerediT™ AJP, SMA, Fragile X) and NextView™ tests are performed by partner laboratories under agreements
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2010 2011 2012 2013
AMD CF RHD Other T21*
© 2014 Sequenom. All rights reserved. 16
Sequenom Laboratories test portfolio MaterniT21™ PLUS test samples
International volume is growing,
and increased to 10% of
accessions in Q1 2014
We reduced the number of
Medicaid tests as we increased
focus on profitable tests
‒ 13 states now reimburse for
our tests
‒ Working with remaining
states to adopt coverage
policies and reimbursement
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2011 2012 2013 Q1 2014
© 2014 Sequenom. All rights reserved. 17
Payor mix - US
Private 69%
Medicaid 23%
Self pay 8%
Hospital births >age 35* Signed agreement with two large
national payors
Positive technology assessments from ACOG/SMFM, BCBS, ISPD and CTAF
Favorable national coverage decisions from Anthem/Wellpoint, Aetna, UnitedHealth, Cigna
Agreements covering 118 million lives (May 1, 2014), negotiations with others ongoing
Reduced Medicaid to 14% of total volume in Q4 2013 from 25% in Q1 2013; increased to 16% in Q1 2014
* Source: NHDS 2008
© 2014 Sequenom. All rights reserved. 18
Sequenom Laboratories collections progress Diagnostics revenue is recorded primarily on a cash basis
Coding change effective
January 1, 2013 caused
significant payment challenges
which appeared in Q213
Amounts do not include
estimated accounts receivable
of $42 to $46 million as of
March 31, 2014
$M
$.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14
Collections for services in prior periods
Collections and revenue accrued for services in the period
© 2014 Sequenom. All rights reserved. 19
MaterniT21™ PLUS LDT Market leadership
The first product to market in this category
Estimated >60%* unit share in high-risk pregnancy testing without the
benefits of our patents being recognized
>250,000 commercial samples
Unparalleled accuracy with short turn-around time (<7 days)
Industry leading content
Growing base of new and repeat physicians
Expanding international presence
Robust infrastructure, network and logistics
– > 2,000 draw sites
– Distribution agreements with hospitals, regional labs and draw
centers
* Market research, June 2013
© 2014 Sequenom. All rights reserved. 20
Financial highlights $ Millions
* Includes cash & marketable securities. Net proceeds from convertible note
offering in September 2012 increased cash balances by $124.7M. The term
loans mature May 1, 2015 and the convertible notes mature October 1, 2017.
** Q1 14 cash burn includes annual royalty payments of $4.8 million and semi-
annual debt service payments of $3.3 million.
*** Revenues adjusted to exclude Sequenom Bioscience, a discontinued
operation
Revenue and cash burn do not reflect unrecorded accounts receivable
estimated at $42 to $46 million as of March 31, 2014.
Revenues*** Available cash*
Cash burn
$135.5
$84.2
$175.9
$70.9 $55.6
$0
$50
$100
$150
$200
2010 2011 2012 2013 Q1 2014
Available Cash
$26
$44
$23
$14 $16
$
$10
$20
$30
$40
$50
Q1 13 Q2 13 Q3 13 Q4 13 Q1 14
Burn (QTR)
**
3 8
46
120
37
$0
$20
$40
$60
$80
$100
$120
$140
2010 2011 2012 2013 2014 Q1
Sequenom Laboratories
© 2014 Sequenom. All rights reserved. 21
Achieve quarterly break-even
and positive cash flow Q4 2014
Expand the NIPT menu with the
development of a low cost test
on an alternative platform by
year-end
– Facilitates international
access and potential future
entry into the low-risk market
SEQUENOM
THE NEW FRONTIERS
© 2014 Sequenom. All rights reserved. 22
TO UNLOCK THE SECRETS OF THE
HUMAN GENOME TO BENEFIT ALL
Actualizing the genetics revolution for commercial success
Innovating progressive concepts and tools for healthcare
Improving the quality of life for millions around the globe
© 2014 Sequenom. All rights reserved.
CONTACT:
PAUL V. MAIER, CFO
INVESTORRELATIONS@SEQUENOM.COM
WWW.SEQUENOM.COM
©2014 Sequenom, Inc. All rights reserved. Sequenom®, MassARRAY® and SensiGene® are registered trademarks of Sequenom, Inc. MaterniT21™ PLUS, HerediT™, NextView™,
and IMPACT Dx™ are trademarks of Sequenom, Inc. All other trademarks are the property of their respective owners. The information herein is for informational purposes only and
represents the current view of Sequenom, Inc. as of the date of this presentation. Sequenom cannot guarantee the accuracy of any information provided after the date of this
presentation. Sequenom makes no warranties, express, implied or statutory, as to the information in this presentation.
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