How is prenatal sequencing selling?

The short answer: Well enough.

The long answer

The other day, I was reading Atul Gawande's excellent book Better: A Surgeon's Notes on Performance. The book examines different aspects of what makes a great physician, but also offers general lessons for the rest of us who are not doctors on how to improve whatever we do.

The book is so well written that I couldn't even put it down during dinner. Big mistake: The chapter on obstetrics and child birth, which describes some of the things that can go wrong during pregnancy and birth, caused me not to finish my meal.

A concern for things going wrong is probably the major reason why prenatal diagnostic tests of foetuses are so popular. These test include ultrasound, chorionic villus sampling, and amniocentesis. And for about a year now, also sequencing-based diagnostics.

I've described these tests beforeand will not do so again. Companies offering these diagnostics include Verinata, LifeCodexx, Ariosa, Natera, and Beijing Berry Genomics. However, the clear market leader is Sequenom.

When I last covered this topicin January, Sequenom had just started to sell it MateriT21 test. Back then, it wasn't clear whether it would sell well at all.

Now it is. The sales figures are in, and in the third quarter, Sequenom shifted an annualised 90,000 tests. No doubt they'll exceed their previous goal of 50,000 tests until the end of this year.

Initially, Sequenom charged $2,700 per test to insurers, which with 90,000 tests sold would be equivalent to annual revenues of $243 million. The cost of the tests probably has come down in the meantime, although it is not clear by how much, as this information to my knowledge isn't shared by insurers or by Sequenom.

Sequenom's reported quarterly revenues from diagnostic testing are however much lower than this, at $12.5 million (annualised $50 million). This suggests an income of less than $600 per test, which is much lower than I'd have expected.

It's likely that sales will keep rising, as there is still plenty room for expansion: Of the 4 million births in the United States each year, 750,000 are considered high risk, either because of maternal age or a family history of genetic problems. All of these pregnancies could potentially benefit from a prenatal sequencing test.