Sequenom Inc., which makes the MaterniT21 genetic test, said Monday that it is laying off 75 employees, or about 12 percent of its workforce, to cut costs as it struggles to collect revenue from insurers, Medicare and Medicaid.
Last month, the San Diego company posted disappointing second-quarter results as it ran nearly triple the number of tests, but had problems collecting revenue. It blamed billing code changes made by insurers and the Centers for Medicare and Medicaid Services for the delays. It also said some state Medicaid plans no longer cover its diagnostic tests.
Sequenom shares fell 7 cents, or 2.4 percent, to close at $2.91 Monday. Since peaking at a 52-week high of $5.36 at the start of this year, the shares have zigzagged lower and recently tumbled to a year-low of $2.86.
Sequenom said that it has notified most of the employees that will be affected and plans to inform the rest by Friday. The move will cost about $1.2 million in severance expenses during the third quarter, but Sequenom said in a regulatory filing that it will save about $10 million a year from the layoffs and other departures that occurred during July. The company had 594 workers as of March, according to its 10K filing.
Sequenom said it expects to see the benefit of its cost cuts during the fourth quarter.