10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             .

Commission File Number: 000-29101

SEQUENOM, INC.

(Exact name of Registrant as specified in its charter)

DELAWARE	77-0365889
(State or other jurisdiction or incorporation or organization)	(I.R.S. Employer Identification No.)
3595 John Hopkins Court San Diego, California	92121
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (858) 202-9000

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $.001 par value

(Title of class)

The Nasdaq Stock Market, LLC

(Name of Each Exchange on Which Registered)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes    x    No    ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes    ¨    No    x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes    x    No    ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (check one):

Large accelerated filer  ¨	Accelerated filer  x	Non-accelerated filer  ¨	Smaller reporting company filer  ¨
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

The aggregate market value of the voting stock held by non-affiliates of the registrant, based upon the closing sale price of the Common Stock on June 30, 2008 as reported on The Nasdaq Global Market, was approximately $586.6 million. Shares of Common Stock held by each executive officer and director and by each person who owns 10% or more of the outstanding Common Stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

As of February 2, 2009, there were 60,977,461 shares of the registrant’s Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates by reference information from the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission (the “Commission”) in connection with the solicitation of proxies for the registrant’s annual meeting of stockholders to be held on May 12, 2009. Such definitive proxy statement will be filed with the Commission no later than 120 days after December 31, 2008.

SEQUENOM, Inc.

FORM 10-K

For the Fiscal Year Ended December 31, 2008

Index

		Page
PART I
ITEM 1.	BUSINESS	1
ITEM 1A.	RISK FACTORS	15
ITEM 1B.	UNRESOLVED STAFF COMMENTS	33
ITEM 2.	PROPERTIES	33
ITEM 3.	LEGAL PROCEEDINGS	33
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	34
PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	35
ITEM 6.	SELECTED FINANCIAL DATA	37
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	38
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	52
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	54
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	54
ITEM 9A.	CONTROLS AND PROCEDURES	54
ITEM 9B.	OTHER INFORMATION	57
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	58
ITEM 11.	EXECUTIVE COMPENSATION	58
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	58
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	59
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	59
PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	60
SIGNATURES		64

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PART I

Item 1.    BUSINESS

All statements in this report that are not historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act. These forward-looking statements can generally be identified as such because the context of the statement will include words such as “may,” “will,” “intend,” “plans,” “believes,” “anticipates,” “expects,” “estimates,” “predicts,” “potential,” “continue,” “opportunity,” “goals,” or “should,” the negative of these words or words of similar import. Similarly, statements that describe our future plans, strategies, intentions, expectations, objectives, goals or prospects are also forward-looking statements. These forward-looking statements are or will be, as applicable, based largely on our expectations and projections about future events and future trends affecting our business, and so are or will be, as applicable, subject to risks and uncertainties including but not limited to the risk factors discussed in this report, that could cause actual results to differ materially from those anticipated in the forward-looking statements. We caution investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements. Our views and the events, conditions and circumstances on which these future forward-looking statements are based, may change. All forward statements are qualified in their entirety by this cautionary statement and we undertake no obligation to revise or update any such statements to reflect events or circumstances after the date hereof.

SEQUENOM^®, SpectroCHIP^®, iPLEX^® , and MassARRAY^® are registered trademarks and EpiTYPER™, SEQureDx™ , MassCLEAVE™, iSEQ™ and AttoSense™ are trademarks of Sequenom, Inc. This report may also refer to trade names and trademarks of other organizations.

Sequenom, Inc. was incorporated in 1994 under the laws of the State of Delaware. As used in this report, the words “we,” “us,” “our,” and “Sequenom” refer to Sequenom, Inc. and its wholly owned subsidiaries on a consolidated basis, unless explicitly noted otherwise.

Overview

We are a diagnostic testing and genetics analysis company committed to providing products, services, diagnostic testing, applications and genetic analysis products that translate the results of genomic science into solutions for biomedical research, translational research, molecular medicine applications, and agricultural, livestock, and other areas of research. Our development and commercialization efforts in various diagnostic areas include non-invasive prenatal diagnostics, oncology, infectious diseases, and other disorders.

Molecular Diagnostics and SEQureDx™ Technology

Molecular Diagnostics

We are researching, developing and pursuing the commercializion of various non-invasive molecular diagnostic tests for prenatal genetic disorders and diseases, oncology, infectious diseases, and other diseases and disorders. We have branded our diagnostic technology for prenatal diagnostics under the trademark SEQureDx. Our efforts in molecular diagnostics are focused on non-invasive diagnostics currently using our proprietary MassARRAY system, however, we may in the future employ other platforms with our applications as may be more suitable on a case-by-case basis considering optimum test performance and commercialization factors.

Currently, we are primarily focused on developing and commercializing prenatal screening and diagnostic tests using our non-invasive, circulating cell-free fetal (ccff) nucleic acid based assay technology. This technology is non-invasive to the womb using a simple maternal blood draw for prenatal diagnosis in order to provide more fundamental and reliable information about the fetus early in pregnancy. Our planned screening and diagnostic tests in areas of women’s health, oncology, and infectious disease are also non-invasive and are expected to use simple blood draws from patients rather than invasive procedures such as surgery.

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Supporting our initiatives in women’s health, oncology and infectious disease we entered into an agreement for the acquisition of the complete AttoSense portfolio of gene-based molecular tests and related assets from SensiGen LLC in January 2009. The acquisition includes highly-sensitive and specific tests for the detection and monitoring of human papillomavirus (HPV) (the primary cause of cervical and head and neck cancers), systemic lupus erythematosus (Lupus), chronic kidney disease (CKD), inflammatory bowel disease (IBD) and other tests, all of which utilize our proprietary MassARRAY platform. This acquisition was completed in February 2009.

Prenatal Diagnostics

Non-invasive prenatal diagnostic tests based on our foundational fetal nucleic acid analysis intellectual property are initially being developed on our MassARRAY platform for chromosomal aneuploidies including Trisomy 21 (Down syndrome), Trisomy 18 (Edwards syndrome), and Trisomy 13 (Patau syndrome), Rhesus D genotyping and gender determination for sex-linked disorders. Through our Clinical Laboratory Improvement Amendments (CLIA) licensed laboratory, the Sequenom Center for Molecular Medicine (SCMM), located in Grand Rapids, Michigan, laboratory developed tests (LDTs) will be developed, validated and commercialized. This is a common approach used for most molecular genetic tests. We have made substantial investments in our information technology infrastructure to enhance the capabilities of our CLIA laboratory to track samples and provide electronic ordering and reporting, and have put in place sample collection and transportation systems that can be readily scaled. We are also pursuing relationships with payors that will support our pricing structure and reimbursement opportunities.

We plan to launch through our CLIA laboratory a non-invasive prenatal screening LDT test for Rhesus D and a carrier screening test for Cystic Fibrosis during the second quarter of 2009. We expect to continue launching other tests including a non-invasive prenatal screening LDT test for trisomies (Trisomy 21 and potentially Trisomies 18 and 13) in June 2009 and a non-invasive prenatal screening LDT test for gender-linked disorders (our Fetal^xy screen) during the fourth quarter of 2009. Concurrent with our LDT commercialization activities, we plan to conduct the development, validation, and other activities necessary to file submissions with the Food and Drug Administration (FDA) seeking approval for selected diagnostic tests. We plan to file submissions with the FDA for our prenatal trisomy tests and Rhesus D genotyping in 2010.

In September 2008 we announced positive results from our Trisomy 21 prenatal test studies using our proprietary RNA-based ccff SEQureDx technology. We reported that data from blinded studies involving 399 clinical samples collected prospectively showed that our proprietary test for Down syndrome correctly identified 100% of all Down syndrome samples without any false-positive or false-negative outcomes. Our test demonstrated complete concordance with invasive procedures such as amniocentesis and chorionic villus sampling (CVS) in both first and second trimester samples.

In January 2009, we announced further positive results from additional Trisomy 21 prenatal test studies using our proprietary RNA-based ccff SEQureDX technology. We presented data for 459 new samples from prospective blinded studies, bringing the total number of samples studied to 858. The test correctly identified all 22 Down syndrome positive samples in the data set including eight first-trimester and 14 second-trimester Down syndrome samples (i.e. 100% sensitivity or detection rate) with a single false positive and no false negatives, as confirmed by CVS or amniocentesis. We also announced an enhancement to our non-invasive SEQureDx trisomy technology utilizing a DNA-based approach. This method demonstrated universal ethnic coverage, high sensitivity and specificity, and the ability to detect Trisomy 21 (Down syndrome), Trisomy 18 (Edwards syndrome) and Trisomy 13 (Patau syndrome) in a single test. The DNA-based test may potentially be used in parallel to the RNA-based method or as a front-line test in its own right. The DNA-based method correctly detected the one homozygous positive Down syndrome sample that the RNA-based method did not resolve (i.e., that had been deemed “inconclusive”). When compared to amniocentesis or CVS, the new DNA-based method correctly identified all 68 homozygotes tested including inconclusive Down syndrome samples and inconclusive Edwards syndrome samples. While we are still working on increasing population coverage for the test, we currently anticipate that the population coverage for the launched test should increase to greater than 95% of the United States population.

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Based on the results from the 858 total study samples, our SEQureDx RNA-based technology demonstrated:

• Specificity of 99.9% (99.2%–100.0%) and 100% sensitivity (87.9%–100.0%) at a 95% confidence interval;

• The Positive Predictive Value is 96.6% (82.8%–99.8%) and the Negative Predictive Value of 100.0% (99.5%–100%) at a 95% confidence interval;

• The SEQureDx RNA test had a total of 106 unresolved results (“inconclusives”) due to homozygotes (94) and unacceptable RNA levels (12) or a total of 12.4%. (The DNA-based method, when applied, resolved the no calls of those samples which could be tested );

• SEQureDx is more accurate than commonly employed standard-of-care screening tests, which perform at a 70%-90% detection rate (i.e., sensitivity) with a 90%-95% specificity in practice. SEQureDx even compares favorably to current invasive procedures, such as amniocentesis (which has sensitivity and specificity of approximately 99.5%).

“Specificity” is the probability that the test will be negative if the patient does not have the disease or condition. “Sensitivity” is the probability that the test will be positive if the patient has the disease or condition. “Positive Predictive Value” is the probability that a patient has the disease or condition when his/her test is positive. “Negative Predictive Value” is the probability that a patient does not have the disease or condition when his/her test is negative. The ranges in parentheses are 95% confidence intervals which represent the statistical uncertainty associated with the results based on the sample data.

We have engaged third parties to further validate and to provide independent assessment of our prenatal trisomy test technology. These studies are important in order for us to obtain insurance payor coverage for our tests, to drive physician adoption and recommendation of our tests, and to facilitate commercialization of our products. Under our agreement with Obstetrix Medical Group (Obstetrix), Obstetrix will provide SCMM with samples for a study to further evaluate our non-invasive prenatal test for Down syndrome. Obstetrix is a national physician group practice of maternal-fetal medicine specialists that is affiliated with Pediatrix Medical Group. This prospective multi-center feasibility study is designed as a LDT validation study and is intended to evaluate samples from 3,000 to 5,000 pregnant women for Down syndrome as part of test validation prior to our planned commercial launch of the test in June 2009. Findings of this study are expected to be presented at a health conference in the first quarter of 2010.

A second study, an independent, prospective, multi-arm, multi-center observational study to document the performance of our non-invasive prenatal test for Down syndrome is currently underway for the evaluation of samples from up to 10,000 pregnant women in high-prevalence pregnancies. This independent study is led by Women & Infants Hospital of Rhode Island. A peer-reviewed publication of data from the first arm of the study evaluating second trimester samples is expected in the fourth quarter of 2009 and peer-reviewed publication of data from the first trimester arm is expected in the second quarter of 2010. Peer-reviewed publication is important for physician education and to drive test commercialization which relies upon physician recommendation and adoption of our tests.

We plan to pursue development of other non-invasive prenatal tests which are relevant to diagnosing disorders or conditions such as thalassemias, cardiac disorders, congenital disorders and autism, and also pursue development of tests for post-natal applications of interest. For example, in January 2009 we announced a collaboration with the Immune Tolerance Institute to develop an advanced newborn screening test for severe combined immunodeficiency (SCID), a rare disease affecting newborns that can be treated effectively if diagnosed early. The test is based on the pioneering work of Jennifer Puck, M.D. of the University of California, San Francisco. A successful feasibility study was recently completed demonstrating the adaptability of Dr. Puck’s real time polymerase chain reaction (RT-PCR) screening assay for SCID diagnosis to our MassARRAY platform.

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In addition to the technical and other progress on our trisomy tests described above, our key molecular diagnostics and SEQureDx technology developments during 2008 also included:

• We completed the acquisition of a CLIA-Certified, CAP accredited laboratory, the Michigan based Center for Molecular Medicine. As part of the acquisition, certain collaborative agreements with Spectrum Health and the Van Andel Research Institute were formalized. The CLIA laboratory was renamed the Sequenom Center for Molecular Medicine (SCMM);

• We initiated a multi-center fetal RhD study at centers affiliated with the North American Fetal Therapy Network (NAFTNet) using our MassARRAY System and SEQureDx Technology;

• We generated preliminary data using DNA markers indicating the ability of SEQureDX technology to determine fetal gender early in pregnancy, which could reduce the need for invasive prenatal procedures in women with fetuses at risk for X-link or sex-dependent genetic disorders;

• In a collaborative technology project with The Chinese University of Hong Kong and Boston University, we achieved breakthrough data supporting new technology for the non-invasive prenatal diagnosis of monogenic diseases as published online in the Early Edition of the Proceedings of the National Academy of Sciences. Monogenic diseases, which include cystic fibrosis, ß-thalassemia and sickle cell anemia, are currently definitively diagnosed prenatally only through invasive procedures following extensive carrier screening testing on both parents;

• We acquired exclusive worldwide rights (excluding Hong Kong) to digital PCR and other non-invasive prenatal diagnostic intellectual property including “shotgun sequencing” technology from The Chinese University of Hong Kong;

• We acquired exclusive rights to fundamental patent rights for digital PCR technologies and methods through a licensing agreement with Genomic Nanosystems, LLC, a wholly owned subsidiary of the Cytonix Corporation; and

• We entered into an exclusive licensing agreement with Xenomics, Inc, for exclusive rights to patents for prenatal research and diagnostic products developed using fetal nucleic acids found in maternal urine.

Prenatal Diagnostics Licenses

We have exclusively in-licensed patent rights (U.S. Patent No. 6,250,540 and its foreign equivalents) to use cell-free fetal nucleic acids for diagnostic testing of serum and plasma samples obtained from pregnant women from Isis Innovation Ltd. (ISIS) a wholly owned subsidiary of the University of Oxford. Our exclusive license rights, which are platform independent and not limited to mass spectrometry, cover the general diagnostic use of cell-free fetal nucleic acids derived from maternal plasma or serum in territories including the United States, Europe, Australia, Canada, Hong Kong and Japan as well as non-exclusive rights in China.

In October 2005, and as amended thereafter, we entered into the agreement with ISIS, pursuant to which ISIS granted us an exclusive royalty-bearing license in the United States, Canada, France, Germany, Great Britain and other countries in Europe, to develop, use and market products covered by the patent claims of U.S. Patent No. 6,250,540 and its foreign equivalents, licensed under the ISIS Agreement (the Licensed Products), except for the field of Rhesus D blood typing by RT-PCR amplification platforms in Europe. The licensed technology, including improvements made by the inventors prior to the ISIS Agreement, covers non-invasive prenatal genetic diagnostic testing on fetal nucleic acids.

In October 2006 we entered into an amendment to the ISIS Agreement pursuant to which, in exchange for an upfront payment by us and entitlement to milestone and royalty payments, ISIS granted us an expanded exclusive license including the field of prenatal gender determination for social or lifestyle purposes and an expanded territory for the field of gender determination for social or lifestyle purposes including Japan and Australia. In November 2007, we entered into a second amendment to the ISIS Agreement pursuant to which, in exchange for an upfront payment by us, a right to a milestone fee upon completion of a specified event, and

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royalty payments on sales, ISIS granted us an expanded licensed territory to include Japan, Australia, and Hong Kong, excluding in the case of Hong Kong the field of gender determination for social or lifestyle purposes.

We also have an exclusive option to negotiate a further license of any improvements made by ISIS inventors. Subject to the license rights granted under the ISIS Agreement, intellectual property rights created in connection with improvements made to the licensed technology will belong to the party developing the improvements. We also granted to ISIS a perpetual royalty-free license to the University of Oxford to use and publish material relating to the licensed technology and any of our improvements solely for non-commercial use. The University of Oxford’s right to publish is subject to our right to delay publication of information to protect the licensed technology or our improvements.

We have agreed to make up-front payments to ISIS and pay to ISIS royalties on net sales of Licensed Products, including specified minimum royalty amounts, and milestone payments upon commercial events with respect to Licensed Products for particular indications.

The ISIS Agreement will remain in force for the life of any patent issued in connection with the patent application covering the licensed technology, subject to earlier termination by either party upon uncured material breach or other specified circumstances. ISIS may terminate the ISIS Agreement if we file a petition to wind-up or dissolve or upon 30 days written notice if we were to challenge the validity of the patent rights covering the licensed technology or fail to make the up-front payments as provided in the ISIS Agreement. After the third anniversary of the ISIS Agreement, we may terminate the ISIS Agreement for any reason with six months advance written notice. In the event we fail to achieve certain milestone requirements with respect to particular indications, ISIS may convert the exclusive license into a non-exclusive license with respect to those indications.

We have also exclusively in-licensed patent rights from the Chinese University of Hong Kong, and Xenomics Inc., covering the general use, on any technology platform, of fetal nucleic acids derived from maternal plasma, serum, urine, and in some cases whole blood, for non-invasive prenatal genetic diagnostic testing, including genetic, expression and epigenetic-based assays and tests.

Our license agreement with Xenomics, Inc. provides us with exclusively licensed patent rights (including United States Patent Nos. 6,251,638; and RE 39,920) for the use of fetal nucleic acids obtained from maternal urine. The license provides us with the exclusive global right to use transrenal fetal DNA in maternal urine for non-invasive prenatal diagnostics and analysis on a technology-independent basis for all uses, excluding the limited field of fetal gender determination solely by the presence of Y chromosome. This intellectual property for urine-based tests provides us with additional options for test development and commercialization. The licensed intellectual property includes issued patents in the United States and Europe and is part of our continuing strategy to expand and protect our SEQureDx franchise through the identification and licensing of new technologies and sampling methodologies.

We also hold exclusive rights to issued patents and pending patent applications providing fundamental patent rights for digital PCR technologies and methods through a licensing agreement with Genomic Nanosystems, LLC, a wholly owned subsidiary of the Cytonix Corporation. The issued patents are United States Patent Nos. 6,143,496; 6,391,559; and 7,459,315 and will expire in 2017. The license provides us with the exclusive right to use patented and patent pending digital PCR methods on any platform for non-invasive prenatal diagnostics and analysis for any sample (for example, fetal cells, amniocentesis fluids, plasma, urine, etc.). We also secured the exclusive right to use digital PCR methods in conjunction with mass spectrometry for any commercial, diagnostic or research purpose, excluding second generation sequencing.

In January 2007, as part of our platform independent commercialization strategy, we announced our first commercial partnership with Lenetix Medical Screening Laboratory, Inc., on a non-exclusive basis, who has developed a CLIA validated test for Rhesus D blood incompatibility using real time polymerase chain reaction RT-PCR (the “Lenetix Agreement”). In December 2007, Lenetix received New York State approval of a

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non-invasive prenatal LDT performed on a real-time PCR (RT-PCR) platform to detect Rhesus D incompatibility, based on our technology licensed and the work performed under the Lenetix Agreement. Commercial sales of the test by Lenetix commenced in January 2008. We have not and do not expect to derive significant revenues from the Lenetix Agreement in the future.

Molecular Diagnostics Market

The United States molecular diagnostics testing market represents the fastest growing and most profitable area of the $51.7 billion clinical laboratory industry in the United States. In the United States the molecular diagnostics market segment is estimated to be $5.8 billion at a growth rate of 19% per year. When looking at the different segments of the molecular diagnostics market, infectious disease represents 73%, oncology 12% and genetic testing is 12%. With our SEQureDx technology for prenatal diagnostics, the Attosense HPV technology acquired from SensiGen, and our evolving oncology suite of products, we are positioning Sequenom for short and long-term leadership roles in the molecular diagnostics market.

In the near term, we are targeting a $2 billion prenatal screening opportunity with our prenatal Down syndrome and Rhesus D genotyping products. Cystic fibrosis carrier screening, which is often ordered when Down syndrome screening is performed is estimated to be a market worth an additional $250 to $750 million based on the different product offerings available in the United States today.

Genetic Analysis

Our proprietary MassARRAY system, comprised of hardware, software applications, consumable chips and reagents, is a high performance (in speed, accuracy and cost efficiency) nucleic acid analysis platform that quantitatively and precisely measures genetic target material and variations. Our platform is widely accepted as a leading high-performance DNA analysis platform for the fine mapping genotyping market and is gaining traction in newer developing markets, such as epigenomics and clinical microbiology. Our customers include premier clinical research laboratories, bio-agriculture, bio-technology and pharmaceutical companies, academic institutions, various government agencies worldwide, as well as our CLIA certified lab, Sequenom Center for Molecular Medicine. To provide customer support for our expanding user base and in an effort to maximize market penetration, we have established direct sales and support personnel serving North America, Europe, India, Australia and Asia, in addition to regional distribution partners in France, Israel, Russia, Eastern Europe, South Korea, New Zealand, Singapore, Taiwan, Kuwait, Saudi Arabia and Turkey.

Our MassARRAY system provides reliable results for a wide range of DNA/RNA analysis applications including single nucleotide polymorphism, or SNP, genotyping detection of mutations, analysis of copy number variants and other structural genome variations. In addition, the system is valuable in providing quantitative gene expression analysis, quantitative methylation marker analysis, comparative sequence analysis of haploid organisms, SNP discovery, and oligonucleotide quality control. These applications are provided through proprietary application software that operates on the MassARRAY platform and through the purchase of consumable chips and reagent kits. While the MassARRAY system is versatile across many applications, it is a robust and cost-effective genotyping solution for fine mapping projects enabled through our iPLEX multiplexing assay reagents and chips which permits multiplexed SNP analysis using approximately the same amount of reagents and chip surface area as is used for a single sample analysis.

Our research and development efforts in genetic analysis are committed to producing new and improved components and applications for the MassARRAY system that deliver greater system versatility and excellent data quality at a competitive price per data point. These research and development activities and new applications also facilitate and support our diagnostics initiatives. Our genetics analysis business product offerings and developments during 2008 included the following:

• iSEQ Comparative Sequence Analysis – We launched a new MassARRAY application that enables accurate, high throughput identification and typing of microbes, viruses, and other haploid organisms.

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The iSEQ application is based on our proprietary MassCLEAVE biochemistry, enabling automatic sample identification, sample grouping and mutation detection by comparison with user-defined reference sequence sets. This product expands our genomic and genetic analysis portfolio and is intended for use by the research community in various fields including epidemiological and surveillance monitoring, biodefense, agricultural and food science applications, forensics and basic clinical research. The application (available through software and reagents) offers a cost-efficient and less labor intensive alternative and is ideally suited for automating and developing new microbial typing and monitoring strategies. The iSEQ application provides an open format for sequence inputs and allows for an easy adoption of the technology for comparative sequence analysis.

• Copy Number Variation (CNV) – We introduced an application that supports the analysis of CNVs. CNV refers to the genetic trait of differences in the number of copies of a particular gene or gene region present in the genome of an individual. Since CNVs often encompass genes that may have important roles both in human disease and drug response, understanding the mechanisms of CNV formation may also help scientists better understand human genome evolution. CNVs can also play a significant role in the etiology of cancer and the response of a tumor to specific drugs.

• Epigenomics Applications and Panels – We launched a new EpiDesigner application as well as four new pre-validated content panels for commonly studied genes in cancer drug discovery and development, including a Standard Epi-Panel, Imprinting, Cancer and Mouse EpiPanels. Epigenomics refers to the study of heritable factors that can cause an organism’s genes to behave (or “express themselves”) differently, even though the gene sequence itself may not change. Our Cancer EpiPanel can be used for high-throughput methylation profiling of DNA samples over hundreds of validated cancer-associated genes. Using our proprietary EpiTYPER technology, the pre-designed Cancer EpiPanel offers a first-of-its-kind simplified method of rapid and quantitative methylation profiling of commonly studied cancer-related genes. We believe these enhancements to our EpiTYPER application will aid researchers in identifying those genes that have mutated or have been influenced by environmental or other factors.

• OncoCarta Mutation Panel – We introduced a new research use only panel for identifying mutation patterns of genes associated with the development of specific cancers. The panel consists of 238 somatic mutations from 19 oncogenes, for the discovery of singular and co-occurring mutations. This panel is available to customers in the form of ready-made reagents and oligonucleotide mixes to enable immediate characterization of archived samples. This panel has the potential to be used for genetically typing tumor biopsies and is part of our oncology and molecular diagnostics development efforts.

• Closed Tube Assay – We completed feasibility testing of a closed tube assay format, which is aimed at simplifying workflow and providing overall assay improvement and cost and will continue these efforts, including liquid handling automation, during 2009.

Genetic Analysis Markets

Biomedical Research and Molecular Medicine

Approximately 250 MassARRAY systems have been placed in academic, pharmaceutical, and clinical research institutions across the global biomedical research market to identify genetic markers with potential clinical utility. Whole-genome population studies are conducted for general research purposes to create SNP maps and to determine allele frequencies in different ethnicities or species. Whole genome association studies and linkage studies are conducted for genetic discovery purposes. In general, these studies are high throughput studies that analyze a small number of samples against a high number of SNPs. Candidate gene and candidate region association studies typically follow whole-genome population genetics studies, whole genome association studies, and linkage studies. Once target regions are identified and connections to disease are made, these institutions then typically perform fine mapping genotyping studies, which are conducted in an effort to apply genetics to diseases. Institutions conducting fine mapping genotyping studies use the MassARRAY system to perform candidate gene and candidate region association studies. Candidate gene association studies demonstrate that underlying genetic defects reside in specific biological pathways. From there, biomarker discovery efforts can potentially lead to clinical validation and use.

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Oncology and Translational Research

Cancer is fundamentally a genetic disease and although the understanding of the genes, pathways, and signaling networks has increased exponentially over the past few decades, relatively little of this information has resulted in significant improvements in cancer mortality rates. The gap between the understanding of cellular and biological processes as they relate to tumor initiation and progression and improvements in patient survival may be due to an inability to comprehensively and systematically approach each cancer as an individual disease. The emerging field of translational medicine is directed at addressing this inability by integrating research inputs from the basic sciences and translating the results of clinical trials into changes in clinical practice. The molecular characterization of tumors is one of the areas of cancer research where science has made great strides in understanding the genetic changes associated with tumor initiation and progression and where it has lead to demonstrable improvements in patient care. Although we are early in the process of development and commercialization, we aim to provide key research tools for translational medical research targeted at oncology. These tools will allow evaluation of genomic alterations and mutations, which include base substitutions that inactivate tumor suppressor genes or cause constitutive activation of proto-oncogenes, large genomic deletions, large and small intragenic deletions, chromosomal translocations, as well as aberrant promoter methylation and other epigenetic events.

Clinical Research, Public Health, Biodefense

Our iSEQ Comparative Sequencing Analysis application is directed to the clinical research market (with its focus on public health issues), healthcare industries, pharmaceutical sectors and homeland defense initiatives. In these areas nucleic acid based detection and identification of bacteria and viruses, especially pathogens of public health interest, have become reliable alternatives to classical detection methods. DNA based analyses are of increasing importance for pathogen typing and antibiotic resistance profiling. A large number of sequencing efforts in the past decade have provided reference sequences for massive parallel comparative sequencing of individuals to ascertain variations within populations and to identify informative genomic markers for routine DNA based microbial and viral typing and monitoring. This continuing effort requires accurate, reproducible, high-throughput technologies for large-scale comparative sequencing in extensive archives of microbes. The automation, throughput, accuracy, data portability and reproducibility of the MassARRAY iSEQ Comparative Sequence Analysis application serves these needs.

Agricultural and Livestock

Widespread livestock testing is partly being driven by government mandate. With growing requests for farm-of-origin verification, country-of-origin verification, age-verification, and national ID programs, the market for traceability analysis is expanding. These programs rely upon accurate traceability analysis for their success. The MassARRAY platform is widely recognized as one of the most accurate and cost effective platforms for providing traceability testing in this context. Additionally, there is market demand for genetic testing as it relates to trait selection and feedlot management. There is also growing demand for genetic analysis of crops, including maize, rice, and others for potentially growing agricultural products with enhanced traits, such as nutritional quality, disease resistance, and crop yields.

Our MassARRAY platform is widely accepted by livestock-focused service providers in the United States and Europe for genotyping, due to its suitability for routine testing of a large number of DNA samples with modest numbers of SNPs. Beginning with our first MassARRAY system placement with the U.S. Department of Agriculture in 1999, we have provided genotyping solutions for livestock customers. We serve the livestock market through product sales, panel development and optimization, and by providing services, including back-up testing, over-flow, and quality control. Our competitive advantage in the livestock market is based upon the capability of the MassARRAY system to perform high-volume routine testing. While other genetic analysis platform companies have been successful in the whole genome mapping segment of the market, their platforms are not optimal for routine tests involving tens to hundreds of SNPs.

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Strategic Direction

In our molecular diagnostics business we are focusing on developing and commercializing various non-invasive prenatal diagnostic tests and developing tests in other women’s health and disease areas, including oncology and infectious disease. In addition to our CLIA laboratory development of diagnostic tests for non-invasive prenatal diagnostics, we are pursuing partnering opportunities for the development and adaptation of the MassARRAY system for commercialization for molecular diagnostics in general. Our genetic analysis strategy focuses on leveraging our technology, intellectual property, and other assets to expand deeper into and beyond the fine mapping segment of the genetic analysis market, to more aggressively target pharmaceutical companies and other for-profit institutions, particularly in areas of translational research and molecular medicine, and capitalizing on our potential in molecular diagnostics markets. In our core genetic analysis business, we are focusing on prioritizing key product and service initiatives that we believe will drive growth and create value.

Our strategy includes the following initiatives:

• Developing and commercializing non-invasive prenatal diagnostic assays and other proprietary tests for women’s health, oncology, infectious disease, and other areas, both through our CLIA laboratory, internal development, and potential partnership with others;

• Focusing on meeting customer needs in the fine mapping segment of the genetic analysis market and adding pharmaceutical, biotechnology, agricultural, and molecular diagnostic companies to our research customer base;

• Creating a sustainable competitive advantage by launching applications, and new products such as our closed tube assay currently under development, our biomarker panels for oncology research and other research, and other applications for genotyping, comparative sequencing, quantitative gene expression, methylation pattern analysis, and other analyses; and

• Adapting the MassARRAY platform for use in molecular diagnostics, potentially including development of in-vitro diagnostic solutions.

Intellectual Property

To establish and protect our proprietary technologies and products, we rely on a combination of patent, copyright, trademark and trade secret laws, as well as confidentiality provisions in our contracts.

We have implemented a diligent patent strategy, including in-licensing, designed to facilitate our research and development and commercialization of current and future products. Our patent portfolio, including in-licensed patent rights, includes 349 issued patents and 275 pending patent applications, in the United States and other major industrial nations throughout the world.

Our prenatal diagnostic patent portfolio includes numerous in-licensed issued patents and in-licensed pending patent applications. The issued patents include United States Patent Nos. 6,250,540, 6,927,028, and 6,664,056, and foreign equivalents for portions of the portfolio that include Canada and Europe. These patents will expire between 2017 and 2022. Most of the patent applications that are in-licensed are in the early stages of patent prosecution and it is difficult to predict when patents will issue from those applications, if at all. These patents and patent applications cover methods of analyzing fetally-derived nucleic acids in maternal serum or plasma, methods of analyzing the methylation status of fetal nucleic acid to differentiate it from maternal nucleic acid, and various DNA and RNA markers which may be useful in detecting and diagnosing various fetal disorders, such as Down syndrome or maternal disorders, such as preeclampsia. We in-licensed United States Patent No. 6,250,540 and its foreign equivalents from ISIS in the United Kingdom. The European counterpart patent to U.S. Patent No. 6,250,540 is European Patent No. 994963. The 994963 Patent was the subject of an Opposition proceeding in the European Patent Office (the “EPO”), which was brought against ISIS by Ravgen, Inc. The Opposition concluded with the EPO’s decision to affirm the grant of the European 994963 Patent,

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however, with amended claims consistent with the issued claims of its counterpart United States Patent. Ravgen has appealed the EPO’s decision (Appeal No. T146/07-334) and the appeal remains currently pending before the EPO.

The majority of our issued United States patents pertaining to mass spectrometry-based nucleic acid analysis methods and technology will expire between 2013 and 2017. United States Patent Nos. 6,500,621, 6,300,076, 6,258,538, and 5,869,242 and European Patent No. EP 0815261 each claim nucleic acid analysis by mass spectrometry methods, including methods that may be performed using our MassARRAY system. Each of these patents expires in 2015.

Through our exclusive license agreement with Xenomics, Inc, we hold exclusive rights to patents for prenatal research and diagnostic uses and products using fetal nucleic acids found in maternal urine. The licensed patent rights include United States Patent Nos. 6,251,638; and RE 39,920, and foreign equivalents in Europe. These patents will expire between 2017 and 2018. The license provides us with exclusive rights to use transrenal fetal nucleic acids in maternal urine for noninvasive prenatal diagnostics and analysis on a platform and technology-independent basis for all uses, excluding fetal gender determination solely by the presence of Y chromosome.

Through our exclusive license agreement with Genomic Nanosystems, LLC, we hold exclusive rights to issued patents and pending patent applications providing fundamental rights for digital PCR technologies and methods. The issued patents are United States Patent Nos. 6,143,496; 6,391,559; and 7,459,315. These patents will expire in 2017. The license provides us with the exclusive right to use the technology on any platform for noninvasive prenatal diagnostics and analysis for any sample (for example, fetal cells, amniocentesis fluids, plasma, urine, etc.) and also in conjunction with mass spectrometry for any commercial, diagnostic or research purpose, excluding second generation sequencing.

Our success depends to a significant degree upon our ability to continue to develop proprietary products and technologies, to identify and validate useful genetic markers and to thoroughly understand their associations with disease, and to in-license desirable or necessary intellectual property as appropriate. We intend to continue to file patent applications as we develop new products and methods for nucleic acid analysis, and as we develop diagnostic and molecular medicine related technology and products. Patents provide some degree of protection for our intellectual property. However, the assertion of patent protection involves complex legal and factual determinations and is therefore uncertain. The laws governing patentability and the scope of patent coverage continue to evolve, particularly in the areas of genetics, molecular biology, and prenatal and molecular diagnostics that are of interest to us. There can be no assurance that patents will issue from any of our patent applications. The scope of any of our issued patents including U.S. Patent No. 6,250,540, may not be sufficiently broad to offer meaningful protection.

Our issued patents may be successfully challenged, invalidated, circumvented or declared unenforceable so that our patent rights would not create an effective competitive barrier. The laws of some foreign countries may not permit such assignments or may not protect our proprietary rights to the same extent, as do the laws of the United States. In view of these factors, our intellectual property positions bear some degree of uncertainty.

We also rely in part on trade secret protection and confidentiality agreements for protection of our intellectual property. We attempt to protect our trade secrets and confidential information by entering into confidentiality agreements with outside parties and with our employees and consultants. Our employees also sign agreements requiring that they assign to us their intellectual property interests in work performed for us as a part of their employment. The laws of some foreign countries may not permit such assignments or may not protect our proprietary rights to the same extent, as do the laws of the United States. All employees sign an agreement not to compete unfairly with us during their employment and upon termination of their employment, through the misuse of confidential information, soliciting employees, soliciting customers, and the like. It is possible that these agreements may be breached or invalidated and if so, there may not be an adequate corrective remedy available. Parties may breach the confidentiality provisions in our contracts or infringe or misappropriate our

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patents, copyrights, trademarks, trade secrets, confidential information, and other proprietary rights. Outside parties may independently discover or invent competing technologies or reverse engineer our trade secrets or other technology. The measures we are taking to protect our proprietary rights may not be adequate due to factors beyond our control.

In the future, parties may file claims asserting that our technologies or products infringe on their intellectual property. We cannot predict whether parties will assert such claims against us, or whether those claims will harm our business. If we are forced to defend against such claims, we will face costly litigation and diversion of management’s attention and resources. As a result of such disputes, we may have to develop costly non-infringing technology or enter into licensing agreements. These agreements, if necessary, may be unavailable on terms acceptable to us, which could seriously harm our business and financial condition.

Competition

We face competition from various companies offering nucleic acid analysis systems and services, from various companies developing and commercializing diagnostic assays, and from various companies researching and developing prenatal diagnostic technology.

In the molecular diagnostic business, including the non-invasive prenatal diagnostic market, we plan to develop LDT and diagnostic use tests based on detection of circulating cell-free fetal nucleic acid in maternal serum or plasma. Our exclusive license to the intellectual property surrounding the use of free fetal nucleic acids, combined with the precision and accuracy of our MassARRAY system will provide us with a competitive advantage in this space. In addition to invasive techniques, our competition arises from alternative methods of non-invasive prenatal diagnostics such as fetal cell purification from maternal blood and trophoblast purification from cervical swabs, fetal cell approaches, and potentially from sequencing approaches. Potential competitors include Ikonysis, Inc., Artemis Health, Inc., and Fluidigm Corp.

In the nucleic acid analysis marketplace, our MassARRAY system competes with alternative technology platforms that differ in cost per data point, throughput, sample amplification, analysis process, sample separation or method of DNA detection, turnaround time and quality of results. Most competitive technologies do not rely on direct detection methods such as mass spectrometry, but instead use indirect sample detection methods, such as hybridization or labeling. Competitive technologies are offered by Life Technologies, Corp. (formerly Applied Biosystems, Inc.) Beckman Coulter, Inc., Illumina, Inc., Biotage AB, Fluidigm, Corp., Ibis Biosciences, Inc. (now Abbott), and others.

Research and Development

We believe that investment in research and development is essential to establishing a long-term competitive position as a provider of genetic analysis tools and as a provider or an enabler of diagnostic tests. Our research and development expenses for the years ended December 31, 2008, 2007, and 2006, were $27.5 million, $14.4 million, and $11.9 million, respectively.

During 2008 we conducted most of our research and development activities at our facilities in the United States. Our research and development is augmented by advisory and collaborative relationships with others.

Our research and development efforts are primarily focused on expanding the applications for our MassARRAY technology, research and development of diagnostic assays, and research and development of other prenatal diagnostic methods and technologies that are relevant to diagnosing disorders or conditions such as thalassemias, cardiac disorders, congenital disorders and autism, as well as for oncology and infectious diseases and certain other diseases, including the sample preparation step of enriching fetal nucleic acid for subsequent analysis.

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Government Regulation

Regulation by governmental authorities in the United States and other countries will be a significant factor in the development, testing, production and marketing of diagnostic products, including tests that may be developed by us or our corporate partners, collaborators or licensees. Certain diagnostic products developed by us or our collaborators may require regulatory approval by governmental agencies prior to commercialization. Products that we develop in the diagnostic markets, depending on their intended use, will be regulated as medical devices by the FDA and comparable agencies of other countries and require either premarket approval, or PMA, or 510(k) clearance from the FDA prior to marketing. The 510(k) clearance pathway usually takes from three to six months from submission, but can take significantly longer. The premarket approval pathway is much more costly, lengthy, uncertain and generally takes from nine months to one year or longer from submission. The receipt and timing of regulatory clearances or approvals for the marketing of such products may have a significant effect on our future revenues. Human diagnostic products are subject to rigorous testing and other approval procedures by the FDA in the United States and similar health authorities in foreign countries. Various federal and state statutes and regulations also govern or influence the manufacturing, safety, labeling, storage, record keeping and marketing of diagnostic products.

Obtaining these approvals and the subsequent compliance with these regulations require the expenditure of substantial resources over a significant period of time, and there can be no assurance that any approvals will be granted. Any such delay in obtaining or failure to obtain such approvals could adversely affect our ability to earn sales revenues, royalties or other license-based fees. Current governmental regulations may change as a result of future legislation or administrative action and cannot be predicted.

As mentioned above, our strategy focuses on capitalizing on our potential in molecular diagnostics markets by commercializing various non-invasive diagnostic tests and laboratory platform systems. Our approach involves initial commercialization, through partnering with CLIA certified laboratories, of LDTs for screening. This approach involves transferring basic technology to the laboratory. The laboratory is solely responsible for the development, validation and commercialization of the assay. Such LDT testing is currently under the purview of CMS and State agencies that provide oversight of the safe and effective use of LDTs. To date, FDA has exercised its regulatory discretion not to regulate LDTs as LDTs are developed and used by a single laboratory. FDA and the U.S. Department of Health and Human Services have been reviewing their approach to regulation in the area of genetic testing and LDTs, and the laws and regulations may undergo change in the near future. Although recent reforms and enforcement actions have focused on them, we have no current plans to utilize analyte specific reagents (ASRs) or In-Vitro Diagnostic Multivariate Index Assay (IVDMIAs) in our LDT strategy so the effect on us of any of these specific changes in FDA policy is currently considered remote to our business.

Our research and development activities involve the controlled use of hazardous materials and chemicals, however, the concentration and volumes of these chemicals are limited. We are subject to federal, state and local laws and regulations governing the use, storage, handling and disposal of such materials and chemicals, as well as certain waste products.

Employees

As of February 2, 2009, we employed 248 persons, of whom 48 hold Ph.D. or M.D. degrees and 47 hold other advanced degrees. Our success will depend in large part upon our ability to attract and retain employees. We face competition in this regard from other companies, research and academic institutions, government entities, and other organizations.

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Executive Officers

Our executive officers, their positions with us, and their ages as of February 2, 2009 are as follows:

Name	Age	Position
Executive Officers
Harry Stylli, Ph.D., M.B.A.	47	President, Chief Executive Officer and Director
Charles R. Cantor, Ph.D.	66	Chief Scientific Officer and Director
Elizabeth Dragon, Ph.D.	60	Senior Vice President, Research and Development
Paul Hawran.	56	Chief Financial Officer
Michael Monko, M.B.A.	49	Senior Vice President, Sales and Marketing
Larry Myres	50	Vice President, Operations
Clarke Neumann, J.D.	45	Vice President and General Counsel
Steven Owings	56	Vice President of Commercial Development, Prenatal Diagnostics
Karsten Schmidt, Ph.D.	47	Vice President, Business Development
Dereck Tatman, Ph.D., M.B.A.	36	Vice President, Business Development
Allan Bombard, M.D.	56	Chief Medical Officer
Gary Riordan	50	Vice President, Regulatory Affairs and Quality

Harry Stylli, Ph.D., M.B.A. Dr. Stylli joined us in June 2005 as President and Chief Executive Officer and a director. From November 2004 to February 2005, Dr. Stylli served as President and Chief Executive Officer of Xencor, Inc., a next-generation antibody platform company. From May 2002 to July 2003, Dr. Stylli served as President and Chief Executive Officer for CovX Pharmaceuticals, a biopharmaceutical company that he co-founded, which was acquired by Pfizer. From 1995 to 2001, Dr. Stylli served in various capacities, including President, for Aurora Biosciences Corporation, a drug discovery systems company of which Dr. Stylli was a co-founder. Dr. Stylli currently serves as a director of Molecular Insight Pharmaceuticals, Inc., and Micropharma Ltd., and is an advisor to Nanosyn, a medicinal chemistry company. Dr. Stylli received his Ph.D. from London University’s Faculty of Medicine and an M.B.A. from the United Kingdom’s Open University.

Charles R. Cantor, Ph.D. Dr. Cantor joined us as Chief Scientific Officer and Chairman of the Scientific Advisory Board in August 1998 and has served as our director since 1998. Dr. Cantor is also Chief Executive Officer of DiThera, Inc., a biotechnology company that he founded in 2007. Since 1992, Dr. Cantor has served as a professor in the Department of Biomedical Engineering and Co-Director of the Center for Advanced Biotechnology at Boston University. Prior to that time, Dr. Cantor held positions at Columbia University and the University of California, Berkeley. He was also Director of the Human Genome Center of the Department of Energy at Lawrence Berkeley Laboratory. Dr. Cantor published the first textbook on genomics, The Science and Technology of the Human Genome Project, and remains active in the Human Genome Project through his membership in a number of the project’s advisory committees and review boards. Dr. Cantor is a member of the National Academy of Sciences. He is also a scientific advisor to 12 biotechnology and life science companies and one venture capital firm. Dr. Cantor currently serves as a director of ExSAR, Inc., Human BioMolecular Research Institute, and Retrotrope, Inc. Dr. Cantor received his Ph.D. in Chemistry from the University of California, Berkeley.

Elizabeth Dragon, Ph.D. Dr. Dragon joined us as Senior Vice President, Research and Development in May 2006. From 1990 to May 2006, Dr. Dragon served in various leadership roles in diagnostics research and development at Roche Molecular Systems, Inc., a molecular diagnostics company and member of the Roche Group. Her most recent positions at Roche Molecular Systems was Senior Vice President of Global Standardization and Vice President of Diagnostics Development. Dr. Dragon received her Ph.D. in Virology and Cell Biology from Albert Einstein College of Medicine of Yeshiva University.

Paul W. Hawran. Mr. Hawran joined us as Chief Financial Officer in April 2007. He served as a director from August 2006 until February 2007. Mr. Hawran served as Chief Financial Officer of Neurocrine Biosciences, Inc., a biopharmaceutical company, from 1993 until September 2006. He previously had served as

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Vice President and Treasurer at SmithKline Beecham Corporation, as well as in various financial positions at Warner Communications. He is a member of the American Institute of Certified Public Accountants, the California and Pennsylvania Institutes of Certified Public Accountants and the Financial Executives Institute. Mr. Hawran is a director of Cytori Therapeutics, Inc. He received an M.S. in taxation from Seton Hall University.

Michael Monko, M.B.A. Mr. Monko joined us as Senior Vice President, Sales and Marketing in August 2006. Mr. Monko served as Vice President of Sales for the organization that is now the diagnostics strategic business unit of Millipore, a bioscience research and biopharmaceutical manufacturing supplier, from 2005 to July 2006. Previously, he served 19 years in various sales roles at Invitrogen Corporation, a biotechnology tools company. Mr. Monko received his M.B.A. from Babson College.

Larry Myres. Mr. Myres joined us as Vice President, Operations in November 2005. Mr. Myres was Vice President of Operations for DexCom, Inc., a medical device company, from 2000 to 2005 and Precision Vascular Systems, a medical device company, from 1997 to 2000.

Clarke Neumann, J.D. Mr. Neumann joined us in 1999 and has served as Vice President, General Counsel and Assistant Secretary since 2001. Prior to joining us, Mr. Neumann was an attorney at Lyon & Lyon, LLP, specializing in intellectual property litigation, strategic counseling, business litigation and transactional matters. Mr. Neumann holds a J.D. from Loyola Law School, Los Angeles.

Steven Owings. Mr. Owings joined us as Vice President, Commercial Development, Prenatal Diagnostics, in February 2007. From 2004 to 2006, Mr. Owings served as President, North America, of Primagen Inc., a molecular diagnostics company. From 2003 to 2004, Mr. Owings served as a consultant and Director of Business Development to Epoch Biosciences, Inc., a genomics analysis products company that was acquired by Nanogen Inc. in 2004. From 1999 to 2002, Mr. Owings served as Vice President, Sales and Marketing for Visible Genetics Inc., a pharmacogenomics company that was acquired by Bayer Diagnostics in 2002.

Karsten Schmidt, Ph.D. Dr. Schmidt joined us in January 1999 as Director, Business Development and has served as Vice President, Business Development, since December 2005. He has also served previously as Managing Director of our German subsidiary, Vice President, European Operations, and Vice President, Operations. Before joining us, Dr. Schmidt held a senior management position at Rhône-Poulenc Rorer where he was responsible for all drug regulatory affairs activities in the asthma and allergy area. Dr. Schmidt is a trained pharmacist. He received his Ph.D. in pharmaceutical biology from the University in Bonn.

Dereck Tatman, Ph.D., M.B.A. Dr. Tatman joined us in 2000 as a Business Development Analyst and has served as Vice President, Business Development since July 2004. Prior to joining us, Dr. Tatman was employed at Dow Agrosciences in the biotechnology business development group. Dr. Tatman holds a Ph.D. from Arizona State University and a M.S. in Management from Krannert School of Business at Purdue University.

Allan Bombard, M.D. Dr. Bombard joined us as Chief Medical Officer in January 2009. From October 2008 to January 2009, Dr. Bombard was the Chief Executive Officer of Lenetix Medical Laboratory, which provides genetic screening and diagnostic testing for obstetricians, gynecologists, family practitioners, nurse midwives, laboratories, diagnostic facilities and other healthcare providers. From April 2005 to October 2008, Dr. Bombard was Chief Medical Officer of Sharp Mary Birch Hospital for Women. From 2002 to 2005, Dr. Bombard served as Senior Vice President, Chair, and Residency Program Director of the Department of Obstetrics and Gynecology at Lutheran Medical Center. Prior to Lutheran Medical Center, he served as the Western U.S. Medical Director for Women’s Health at Aetna. Since 1998, Dr. Bombard has been a clinical professor in the Department of Obstetrics and Gynecology & Women’s Health at the Albert Einstein College of Medicine and since 2004. Dr. Bombard received his M.D. from the George Washington University and his M.B.A. from the University of San Diego.

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Gary Riordan Mr. Riordan joined us in September 2008 as Vice President, Regulatory Affairs and Quality. Prior to joining us, Mr. Riordan served as Director, Regulatory Affairs at Ventana Medical Systems, Inc., a diagnostic systems supplier, from November 2004 to September 2008, and at Roche Molecular Systems, Inc., from December 1997 to October 2004. Mr. Riordan worked at the U.S. Food and Drug Administration from June 1990 to December 1997 where he evaluated regulatory submissions for antibody- and nucleic acid-based HIV and Hepatitis diagnostic assays and conducted inspections of in vitro diagnostic manufacturers.

Available Information

Copies of our public filings are available on our Internet website at http://www.sequenom.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. We will supply a copy of this annual report on Form 10-K, and any other periodic or current reports, without charge. To request a copy, please contact Investor Relations, Sequenom, Inc., 3595 John Hopkins Court, San Diego, CA, 92121, USA.

Item 1A.    RISK FACTORS

Before deciding to invest in us or deciding to maintain or increase your investment, you should carefully consider the risks described below, in addition to the other information contained in this report and in our other filings with the SEC. The risks and uncertainties described below and in our other filings are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business. If any of these known or unknown risks or uncertainties actually occurs, our business, financial condition and results of operations could be seriously harmed. In that event, the market price for our common stock could decline and you may lose your investment.

We have limited experience.

Many of our technologies, particularly our non-invasive prenatal and other molecular diagnostic technologies, are at an early stage of discovery and development. We continue to develop and commercialize new products and create new applications for our products. We are also researching, developing and pursuing the commercialization of various non-invasive molecular diagnostic tests for prenatal genetic disorders and other diseases and disorders for use on our MassARRAY platform and potentially other platforms and we have limited or no experience in these applications of our technology and operating in these markets. You should evaluate us in the context of the uncertainties and complexities affecting an early stage company developing products and applications for the life science industries and experiencing the challenges associated with entering into new markets that are highly competitive. We need to make significant investments to ensure our genetic analysis products and applications and our diagnostics tests perform properly and are cost-effective, and we or our partners will likely need to apply for and obtain certain regulatory approvals to sell our products for diagnostic applications and it is uncertain whether such approvals will be granted. Even if we develop products for commercial use and obtain all necessary regulatory approvals, we may not be able to develop products that are accepted in the genomic, diagnostic, noninvasive prenatal, clinical research, pharmaceutical, or other markets or the emerging field of molecular medicine and that can be marketed and sold successfully.

We may not be able to generate any revenue from noninvasive prenatal diagnostic tests or any other tests we may develop.

We have committed significant research and development resources to the development of research-use-only and diagnostic tests, particularly non-invasive prenatal tests, for use on our MassARRAY system and other platforms. Although our licensed partner launched the first research-use-only test, a test for RHD using a reverse transcription polymerase chain reaction (RT-PCR) platform in early 2008, there is no guarantee that our partner or we will successfully generate significant revenues from this or any other tests for any use. We plan to launch through our CLIA laboratory a non-invasive prenatal screening LDT test for Rhesus D and a carrier screening test for Cystic Fibrosis during the second quarter of 2009; a non-invasive prenatal

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screening LDT test for trisomies (Trisomy 21 and potentially Trisomies 18 and 13) in June 2009; and a non-invasive prenatal screening LDT test for gender-linked disorders (our Fetal^xy screen) during the fourth quarter of 2009 and to launch additional tests in the future. However, there is no guarantee that we will be able to successfully launch these or other diagnostic tests on the anticipated timelines or at all. We have no experience in licensing, manufacturing, selling, marketing or distributing our SEQureDx technology, or diagnostic or other tests. If we, or our partners, are not able to successfully market or sell noninvasive prenatal research-use-only or diagnostic tests or other tests we may develop for any reason, including the failure to obtain any required regulatory approvals, we will not generate any revenue from the sale of such tests. Even if we are able to develop noninvasive prenatal research-use-only or diagnostic or other tests for sale in the marketplace, a number of factors could impact our ability to generate any significant revenue from the sale of such tests, including the following:

• reliance on SCMM and third-party CLIA-certified laboratories, which are subject to routine governmental oversight and inspections for continued operation pursuant to CLIA, to process tests that we develop;

• reliance on SCMM and third parties to manufacture any noninvasive prenatal research-use-only or diagnostic or other tests that we may develop;

• our ability to establish and maintain adequate infrastructure to support the commercial launch and sale of our diagnostic tests through SCMM or a third-party CLIA-certified laboratory, including establishing adequate laboratory space, information technology infrastructure, sample collection and tracking systems, electronic ordering and reporting systems and other infrastructure and hiring adequate laboratory and other personnel;

• the availability of adequate study samples for validation studies for any diagnostic tests we develop, the success of such validation studies and our ability to publish study results in peer-reviewed journals;

• the availability of alternative and competing tests or products and technological innovations or other advances in medicine that cause our technologies to be less competitive;

• compliance with federal, state and foreign regulations governing laboratory testing and the sale and marketing of research-use-only or diagnostic or other tests, including noninvasive prenatal tests;

• the accuracy rates of such tests, including rates of false-negatives and/or false-positives;

• concerns regarding the safety or effectiveness or clinical utility of noninvasive prenatal or other tests;

• changes in the regulatory environment affecting health care and health care providers, including changes in laws regulating laboratory testing and/or device manufacturers and any laws regulating prenatal testing;

• the extent and success of our sales and marketing efforts and ability to drive adoption of our diagnostic tests;

• coverage and reimbursement levels by government payors and private insurers;

• the level of physician and customer adoption of any diagnostic tests we develop;

• pricing pressures and changes in third-party payor reimbursement policies;

• general changes or developments in the market for women’s and/or prenatal health diagnostics, or diagnostics in general;

• ethical and legal issues concerning the appropriate use of the information resulting from noninvasive prenatal diagnostic tests or other tests;

• the refusal by women to undergo such tests for moral, religious or other reasons, or based on perceptions about the safety or reliability of such tests;

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• our ability to promote and protect our SEQureDx brand and technology; and

• intellectual property rights held by others or others infringing our intellectual property rights.

Our operating results may fluctuate significantly.

Our revenues and results of operations may fluctuate significantly, depending on a variety of factors, including the following:

• our ability to manage costs and expenses and effectively implement our business strategy;

• our and our distributors’ success in selling, and changes in the demand for, our products and services including our MassARRAY Compact platform and iPLEX Gold multiplexing application and other applications and related consumables, and demand for products and services for genotyping, DNA methylation (epigenetic analysis) and QGE (gene expression analysis) applications;

• our success in selling genetic analysis contract research services;

• our success in depleting or reducing current product inventories in view of new or upcoming product introductions;

• the pricing of our products and services and those of our competitors;

• variations in the timing of payments from customers and collaborative partners and the recognition of these payments as revenues;

• the timing and cost of any new product or service offerings by us;

• our ability to develop new applications and products, such as noninvasive prenatal or other diagnostic assays and other diagnostic technologies, the success of such applications and products, and our ability to improve current products to increase demand for such products;

• the potential need to acquire licenses to new technology, including genetic markers that may be useful in diagnostic applications, or to use our technology in new markets, which could require us to pay unanticipated license fees and royalties in connection with licenses we may need to acquire;

• our research and development progress and how rapidly we are able to achieve technical milestones, including the milestone of sufficient fetal DNA enrichment and/or RNA based solutions with respect to our noninvasive prenatal technologies;

• the cost, quality and availability of our consumable chips, also known as SpectroCHIP bioarrays, oligonucleotides, DNA samples, tissue samples, reagents and related components and technologies;

• material developments in our customer and supplier relationships including our ability to successfully transition to new technologies to successfully maintain our relationships with our customers and suppliers;

• our ability to clinically validate any potential noninvasive prenatal or other diagnostic related products and obtain regulatory approval of any potential diagnostic products; and

• expenses related to, and the results of, any litigation or other legal proceedings.

Further, our revenues and operating results are difficult to predict because they depend on the number, timing, and type of MassARRAY system placements that we make during the year, the number, timing, and types of software licensed or sold, and the quantity and timing of consumables sales for the installed base of systems and the number, timing and type of contract research services agreements that we enter into. Changes in the relative mix of our MassARRAY system and consumables sales and service agreements can have a significant impact on our gross margin, as consumable sales and service agreements typically have margins significantly different than MassARRAY system sales. Our revenues and operating results are also difficult to

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predict because they depend upon the activities of our distributors. The absence of or delay in generating revenues could cause significant variations in our operating results from year to year and could result in increased operating losses.

We believe that period-to-period comparisons of our financial results will not necessarily be meaningful. You should not rely on these comparisons as an indication of our future performance. If our operating results in any future period fall below the expectations of securities analysts and investors, our stock price will likely fall.

We may need additional capital to support our growth, which will result in additional dilution to our stockholders.

Our business may require additional investment that we have not yet secured. As of December 31, 2008, we had available cash and cash equivalents and marketable securities of approximately $98.3 million. We also had approximately $5.7 million of auction rate securities, or ARS, investments classified as noncurrent marketable securities at December 31, 2008.

We believe our cash and cash equivalents will be sufficient to fund our operating expenses and capital requirements through 2010. The actual amount of funds that we will need will be determined by many factors, some of which are beyond our control, and we may need funds sooner than currently anticipated. These factors include but are not limited to:

• the size of our future operating losses;

• the level of our and our distributors’ success in selling our MassARRAY products and services;

• the terms and conditions of sales contracts, including extended payment terms;

• our ability to introduce and sell new products and services and successfully reduce inventory levels of earlier products;

• the level of our selling, general and administrative expenses;

• the extent of our investment in diagnostic technology, including prenatal genetic analysis technology, molecular diagnostics and noninvasive prenatal diagnostic technology, development, commercialization, and regulatory approval;

• our success in, and the expenses associated with, researching, developing and commercializing diagnostic products, alone or in collaboration with our partners, and obtaining any required regulatory approval for those products;

• the level of our success alone or in collaboration with our partners in launching and selling any diagnostic products and services;

• the extent of our research and development pursuits, including our level of investment in MassARRAY product research and development, and diagnostic assay and other technology research and development;

• the extent to which we enter into, maintain, and derive revenues from licensing agreements, including agreements to out-license our noninvasive prenatal analysis technology, research and other collaborations, joint ventures and other business arrangements;

• the level of our legal expenses, including those expenses associated with intellectual property protection and those expenses and any damages payments associated with litigation, including intellectual property litigation;

• the extent to which we acquire, and our success in integrating, technologies or companies;

• our ability to liquidate any ARS holdings;

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• the level of our expenses associated with the audit of our consolidated financial statements as well as compliance with other corporate governance and regulatory developments or initiatives; and

• regulatory changes and technological developments in our markets.

General market conditions or the market price of our common stock may not support capital raising transactions, such as an additional public or private offering of our common stock or other securities. In addition, our ability to raise additional capital may depend upon our stock being quoted on The NASDAQ Global Market or upon obtaining shareholder approval. There can be no assurance that we will be able to satisfy the criteria for continued listing on NASDAQ or that we will be able to obtain shareholder approval if it is necessary. If we are unable to obtain additional funds on a timely basis or on terms favorable to us, we may be required to cease or reduce further commercialization of our products, to cease or reduce certain research and development projects, to sell, license or otherwise dispose of some or all of our technology or assets or business units or to merge all or a portion of our business with another entity. If we raise additional funds by selling shares of our capital stock, the ownership interest of our current stockholders will be diluted. Insufficient funds may require us to delay, scale back, or eliminate some or all of our activities.

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 plan to validate LDT assays and commercialize them through SCMM, our CLIA-licensed laboratory located in Grand Rapids, Michigan. We only recently acquired SCMM in 2008 and as a result have little experience operating a CLIA-licensed laboratory. Because there is substantial distance between SCMM and us, we may have logistical and operational challenges in effectively managing and operating SCMM. If we are unable to successfully transfer our diagnostic technology and tests to SCMM for validation or if SCMM is unable to successfully validate any LDT or other tests that we intend to commercialize through SCMM, we may not be able to successfully commercialize such tests on the anticipated timelines or at all. Although we have invested substantially in SCMM’s infrastructure, it is possible that we may not have adequate infrastructure in place for the commercial launch and sale of our diagnostic tests through SCMM. Our ability to successfully develop and commercialize diagnostic tests will depend on our ability to successfully operate SCMM and obtain and maintain required regulatory approvals.

SCMM as a clinical laboratory is subject to CLIA, which is designed to ensure the quality and reliability of clinical laboratories by mandating specific standards in the areas of personnel qualifications, administration and participation in proficiency testing, patient test management, quality control, quality assurance and inspections. The sanction for failure to comply with CLIA requirements may be suspension, revocation or limitation of a laboratory’s CLIA certificate, which is necessary to conduct business, as well as significant fines and/or criminal penalties. SCMM is also subject to regulation of laboratory operations under state clinical laboratory laws. State clinical laboratory laws may require that laboratories and/or laboratory personnel meet certain qualifications, specify certain quality controls or require maintenance of certain records. Certain states, including Florida, Maryland, New York, Pennsylvania and Rhode Island, each require that you obtain licenses to test specimens from patients residing in those states and additional states may require similar licenses in the future. If we are unable to obtain licenses from these states or there is delay in obtaining such licenses, we will not be able to process any samples from patients located in those states until we have obtained the requisite licenses. Potential sanctions for violation of these statutes and regulations include significant fines and the suspension or loss of various licenses, certificates and authorizations, which could adversely affect our business and results of operations.

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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 licensed laboratories with respect to diagnostic products.

Products that we or our collaborators develop in the molecular medicine, diagnostic, noninvasive prenatal diagnostic, or other markets, depending on their intended use, may be regulated as medical devices by the FDA and comparable agencies of other countries and require either premarket approval, or PMA, or 510(k) clearance from the FDA, prior to marketing. The 510(k) clearance process usually takes from three to six months from submission, but can take significantly longer. The PMA process is much more costly, lengthy, uncertain, and generally takes from nine months to one year or longer from submission. In addition, commercialization of any diagnostic or other product that our licensees or collaborators or we develop would depend upon successful completion of preclinical testing and clinical trials. Preclinical testing and clinical trials are long, expensive, and uncertain processes, and we do not know whether we, our licensees, or any of our collaborators, would be permitted or able to undertake clinical trials of any potential products. It may take us or our licensees or collaborators many years to complete any such testing, and failure could occur at any stage. Preliminary results of trials do not necessarily predict final results, and acceptable results in early trials may not be repeated in later trials. A number of companies in the diagnostics industry, including biotechnology companies, have suffered significant setbacks in advanced clinical trials, even after promising results in earlier trials. Delays or rejections of potential products may be encountered based on changes in regulatory policy for product approval during the period of product development and regulatory agency review. If our projects reach clinical trials, we or our licensees or collaborators could decide to discontinue development of any or all of these projects at any time for commercial, scientific, or other reasons.

We initially plan to validate assays and commercialize them in the form of laboratory developed tests (LDTs) through SCMM or a third-party CLIA-certified laboratory. Although LDT testing is currently solely under the purview of CMS and state agencies who provide oversight of the safe and effective use of LDTs, the FDA and the U.S. Department of Health and Human Services have been reviewing their approach to regulation in the area of genetic testing and LDTs, and the laws and regulations may undergo change in the near future. Although we have no current plans to utilize in our LDT strategy analyte specific reagents (ASRs) or In Vitro Diagnostic Multivariate Index Assay (IVDMIAs), which have been the focus of recent reforms and enforcement actions by the FDA, we cannot predict the extent of the FDA’s future regulation and policies with respect to LDTs. Concurrently with our LDT commercialization activities, we plan to conduct the development, validation, and other activities necessary to file submissions with the FDA seeking approval for selected diagnostic tests. If we are unable to successfully launch any diagnostic tests as LDTs or if we are otherwise required to obtain FDA premarket clearance or approval prior to commercializing any diagnostic tests, our ability to generate revenue from the sale of such tests may be delayed and we may never be able to generate significant revenues from sales of 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.

To date, long-term safety and efficacy have not yet been demonstrated in clinical trials for any of our diagnostic product candidates. Favorable results in our early studies or trials may not be repeated in later studies or trials that will be required to obtain either PMA or 510(k) clearance from the FDA prior to marketing any of our product candidates. Our product candidates may fail to demonstrate positive results in clinical trials despite having progressed through earlier-stage trials. In particular, the limited results that we have obtained for our prenatal diagnostic tests may not predict results from studies in larger numbers of subjects drawn from more diverse populations over a longer period of time. Unfavorable results from ongoing preclinical studies or clinical trials could result in delays, modifications or abandonment of ongoing or future clinical trials, or abandonment of a product development program. Preclinical and clinical results are frequently susceptible to varying interpretations that may delay, limit or prevent regulatory approvals or commercialization.

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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.

In October 2005, we entered into an exclusive license to noninvasive prenatal diagnostic rights (United States Patent No. 6,258,540 and foreign equivalents) with ISIS which we amended in October 2006 and in November 2007 to also include exclusive rights to intellectual property for noninvasive prenatal gender determination testing for social and lifestyle purposes. We intend to use the rights that we acquired under the license to develop noninvasive prenatal nucleic acid based tests, including gender determination tests. If there is any dispute between us and ISIS regarding our rights under the license agreement, or we do not achieve certain commercial launch milestones, in a timely manner, our ability to exclusively commercialize these diagnostic tests may be adversely affected and could delay or completely terminate our product development and commercialization efforts for these diagnostic tests.

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.

Development of diagnostic or other products by us, our licensees, or our collaborators including assays, are subject to risks of failure inherent in the development and commercial viability of any such product, such as demand for such product. These risks further include the possibility that such product would:

• be found to be ineffective, unreliable, or otherwise inadequate or otherwise fail to receive regulatory approval;

• be difficult or impossible to manufacture on a commercial scale;

• be uneconomical to market;

• fail to be successfully commercialized if adequate reimbursement from government health administration authorities, private health insurers, and other organizations for the costs of these products is unavailable;

• be impossible to commercialize because they infringe on the proprietary rights of others or compete with products marketed by others that are superior; or

• fail to be commercialized prior to the successful marketing of similar products by competitors.

If a licensee discovers or develops diagnostic products or we or a collaborator discover or develop diagnostic or other products using our technology, products, services, or discoveries, we may rely on that licensee or collaborator (hereafter referred to as “partner”) for product development, regulatory approval, manufacturing, and marketing of those products before we can realize revenue and some or all of the milestone payments, royalties, or other payments we may be entitled to under the terms of the licensing or collaboration agreement. If we are unable to successfully achieve milestones or our partners fail to develop successful products, we will not earn the revenues contemplated and we may also lose exclusive (as in the case of our license agreement with Isis Innovation Ltd, or ISIS, under which we in-license our fundamental noninvasive prenatal diagnostic technology) or non-exclusive license rights to intellectual property that are required to commercialize such products. Our agreements may allow our partners significant discretion in electing whether to pursue any of these activities. We cannot control the amount and timing of resources our partners may devote to our programs or potential products. As a result, we cannot be certain that our partners will choose to develop or commercialize any products or will be successful in doing so. In addition, if a partner is involved in a business combination, such as a merger or acquisition, or changes its business focus, its performance under its agreement with us may suffer and, as a result, we may not generate any revenues or only limited revenues from the royalty, milestone, and similar payment provisions contained in our agreement with that partner.

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Our ability to compete in the market may decline if we lose or may not obtain some of our intellectual property rights.

Our success will depend on our ability to obtain and protect patents on our technology, to protect our trade secrets, and to maintain our rights to licensed intellectual property or technologies. Our patent applications or those of our licensors may not result in the issue of patents in the United States or other countries. Our patents or those of our licensors may not afford meaningful protection for our technology and products. Others may challenge our patents or those of our licensors in litigation or by proceedings such as interference, oppositions and reexaminations, as is the case with the appeal pending before the European Patent Office with respect to the patent rights that we in-licensed from ISIS for prenatal diagnostics (United States Patent No. 6,258,540 and European Patent No. 994963), and as a result, our patents or those of our licensors could be narrowed or invalidated or become unenforceable. Competitors may develop products similar to ours that do not conflict with our patents or patent rights. Others may develop noninvasive prenatal tests or other diagnostic tests or products, technologies or methods in violation of our patents or those of our licensors, or by operating around our patents or license agreements, which could reduce sales of our consumables or reduce or remove our noninvasive prenatal and other diagnostic commercialization opportunities. To protect or enforce our patent rights, we may initiate interference proceedings, oppositions, reexaminations or litigation against others. However, these activities are expensive, take significant time and divert management’s attention from other business concerns. We may not prevail in these activities. The patent position of biotechnology companies generally is highly uncertain and involves complex legal and factual questions that are often the subject of litigation. No consistent policy has emerged from the U.S. Patent and Trademark Office, the offices of foreign countries or the courts regarding the breadth of claims allowed or the degree of protection afforded under biotechnology patents. There is a substantial backlog of biotechnology patent applications at the U.S. Patent and Trademark Office and of the equivalent offices around the world and the approval or rejection of patent applications may take several years.

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.

From time to time, companies have asserted, and may again assert, patent, copyright and other intellectual proprietary rights against our products or products using our technologies. These claims have resulted and may in the future result in lawsuits being brought against us. For example, we are named as a defendant in a lawsuit brought by Beckman Coulter Inc. and Orchid Cellmark Inc. In this lawsuit, Beckman Coulter and Orchid Cellmark have alleged that by making and selling our iPLEX products and teaching our customers how to use these products, we are infringing, contributing, and inducing others to infringe three patents owned by Orchid Cellmark. We may not prevail in this litigation or any future lawsuits alleging patent infringement given the complex technical issues and inherent uncertainties in intellectual property litigation. If any of our products, technologies or activities, in particular our iPLEX products from which we derive a substantial portion of our revenues, were found to infringe on another company’s intellectual property rights, we could be subject to an injunction that would force the removal of our products from the market or we could be required to redesign our products, which could be costly. We could also be ordered to pay damages or other compensation, including punitive damages and attorneys’ fees to such other company. A negative outcome in any such litigation could also severely disrupt the sales of our marketed products to our customers or their customers, which in turn could harm our relationships with our customers, our market share and and/or product revenues. Even if we are ultimately successful in defending any intellectual property litigation, such litigation is expensive and time consuming to address, will divert our management’s attention from our business and may harm our reputation.

Other companies or entities also may commence actions seeking to establish the invalidity of our patents. In the event that one or more of our patents are challenged, a court may invalidate the patent(s) or determine that the patent(s) is not enforceable, which could harm our competitive position. For example, we recently filed a patent infringement lawsuit against defendant Ibis Biosciences, Inc., a subsidiary of Isis Pharmaceuticals, Inc. in the United States District Court for the District of Delaware. We believe that the sale and offer for sale of Ibis products and technology infringes three Sequenom patents related to nucleic acid analysis by mass spectrometry.

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We are seeking a permanent injunction enjoining defendant from further infringement and monetary damages. Defendant may challenge the validity of our patents as part of the lawsuit. If one or more of our patents are invalidated, or if the scope of the claims in any of these patents is limited by a court decision, we could lose certain market exclusivity afforded by patents owned or in-licensed by us and potential competitors could more easily bring products to the market that directly compete with our own. Such adverse decisions may negatively impact our revenues.

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 require our employees, consultants, advisors, and collaborators to execute confidentiality agreements and in certain cases, assignment or license agreements. We cannot guarantee that these agreements will provide us with adequate intellectual property ownership or protection against improper or unauthorized use or disclosure of confidential information or inventions. In some situations, these agreements may conflict with or be subject to the rights of others with whom our employees, consultants, advisors, or collaborators have prior employment or consulting relationships. In some situations, as is the case with our employees in Germany, these types of agreements or relationships are subject to foreign law, which provides us with less favorable rights or treatment than under U.S. law. Others may gain access to our inventions, trade secrets or independently develop substantially equivalent proprietary materials, products, information, and techniques.

We have a history of generating a large percentage of our revenue at the end of each quarterly accounting period.

Due to the manner in which many customers in our target markets allocate and spend their budgeted funds for acquisition of our products, a large percentage of our sales are booked at the end of each quarterly accounting period. Because of this timing of our sales, we may not be able to reliably predict order volumes and our quarterly revenues. A sales delay of only a few days may significantly impact our quarter-to-quarter comparisons. If our quarterly revenues fall below the expectations of securities analysts and investors, our stock price may decline. Similarly, if we are unable to ship our customer orders on time, or if extended payment terms are required, there could be a material adverse effect on revenues for a given quarter.

A reduction in revenues from sales of MassARRAY products would harm our business.

The demand for MassARRAY systems and consumables and contract research services has changed over time, and any decline in demand will reduce our total revenues. We expect that sales of MassARRAY systems and consumables will account for most of our total revenues for the foreseeable future. Also, our competitors have offered low priced fee-for-service genotyping services and technologies to the DNA analysis marketplace. These factors and the following factors, among others, would reduce the demand for MassARRAY products and services:

• competition from other products and service providers or failure of our products or applications or services;

• changes in fiscal policies and the economy which negatively impact customer buying decisions; and

• negative publicity or evaluations, particularly with respect to product warranty and repair and troubleshooting services provided to existing customers and with respect to our license rights to perform gender testing for social or lifestyle purposes.

Our revenues are subject to the risks faced by biotechnology and diagnostic companies, pharmaceutical companies, and governmental and other research institutions.

We expect that our revenues in the foreseeable future will be derived primarily from MassARRAY system products provided to academic institutions, biotechnology, diagnostic, and pharmaceutical companies,

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laboratories, companies and institutions that service the livestock industry, and governmental and other research institutions. Our operating results could fluctuate substantially due to reductions and delays in research and development expenditures by these customers. These reductions and delays could result from factors such as:

• changes in economic conditions and possible country-based boycotts;

• changes in government programs that provide funding;

• changes in the regulatory environment affecting health care and health care providers, and, for example, recent draft FDA guidance which, if effected, may impose additional restrictions on CLIA licensed laboratories performing laboratory diagnostic tests;

• pricing pressures and reimbursement policies;

• market-driven pressures on companies to consolidate and reduce costs;

• other factors affecting research and development spending; and

• uncertainty about our ability to fund operations and supply products and services to customers.

None of these factors are within our control. We have broadened the markets to which we sell our products and applications and continue to develop new applications and products for use in new markets. We are targeting customers in clinical research and clinical marker validation, the emerging field of molecular medicine, genetic service laboratories, and animal testing laboratories and diagnostic testing markets. We have limited or no experience operating in these potential markets and, as a result, may be unable to develop products and applications that allow us to penetrate these markets or successfully generate any revenue from sales in these markets. We will have limited ability to forecast future demand for our existing and any new products and applications in these markets.

We depend on sales of our consumable chips and other MassARRAY consumables for a significant portion of our revenues.

Sales of our consumable chips and other consumables for the MassARRAY system are an important source of revenue. Revenues from MassARRAY consumables totaled approximately 41% of our total revenues for the year ended December 31, 2008, compared to 40% of our total revenues for the year ended December 31, 2007, respectively. Factors which may limit the use of our consumable chips and other consumables or otherwise adversely affect our revenues from consumables include:

• the extent of our customers’ level of utilization of their MassARRAY systems;

• our ability to provide timely repair services and our ability to secure replacement parts, such as lasers, for our MassARRAY systems;

• the extent to which customers increase multiplexing levels using the iPLEX Gold or any next generation iPLEX applications;

• the availability and adoption of new technologies and applications provided by our competitors;

• failure to sell additional MassARRAY systems;

• the termination of contracts with or adverse developments in our relations with suppliers of our consumables;

• the training of customer personnel;

• the acceptance of our technology by our customers;

• the ability to maintain necessary quality standards and specifications for our SpectroCHIP products; and

• our inability to transition to new suppliers for components for our MassARRAY system and our ability to maintain such relationships.

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If our customers are unable to adequately prepare samples for our MassARRAY system, the overall market demand for our products may decline.

Before using the MassARRAY system, customers must prepare samples by following several steps that are subject to human error, including DNA isolation and DNA amplification. If DNA samples are not prepared appropriately, or the proposed assays are too complex, the MassARRAY system may not generate a reading or a correct reading. If our customers experience these difficulties, they might achieve lower throughput levels than specified for the system. If our customers are unable to generate expected levels of throughput, they might not continue to purchase our consumables, they could express their discontent with our products to others, or they could collaborate with others to jointly benefit from the use of our products. Any or all of these actions would reduce the overall market demand for our products. From time to time, we have experienced customer complaints regarding data quality and difficulty in processing more complex assays.

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.

The sales cycles for our MassARRAY system products are typically lengthy. Our sales and licensing efforts require the effective demonstration of the benefits, value, and differentiation and validation of our products and services, and significant education and training of multiple personnel and departments within a customer organization. We may be required to negotiate agreements containing terms unique to each prospective customer or licensee which would lengthen the sales cycle. We may expend substantial funds and management effort with no assurance that we will sell our products or services. In addition, this lengthy sales cycle makes it more difficult for us to accurately forecast revenue in future periods and may cause revenues and operating results to vary significantly in such periods.

We may not be able to successfully adapt our products for commercial applications.

A number of potential applications of our MassARRAY technology, including research-use-only and diagnostic applications for noninvasive prenatal and other molecular testing, may require significant enhancements in our core technology or the in-licensing of intellectual property rights or technologies. If we are unable to complete the development, introduction, or scale-up of any product, or if any of our products or applications, such as gene expression analysis, epigenetic analysis or iPLEX multiplexing, do not achieve a significant level of market acceptance, our business, financial condition and results of operations could be seriously harmed. Achieving market acceptance will depend on many factors, including demonstrating to customers that our technology and products are cost competitive or superior to other technologies and products that are available now or that may become available in the future. We believe that our revenue growth and profitability will substantially depend on our ability to overcome significant technological challenges and successfully introduce our newly developed products, applications, and services into the marketplace.

We have limited commercial production capability and experience and may encounter production problems or delays, which could result in lower revenue.

We partially assemble the MassARRAY system and partially manufacture our consumable chips and MassARRAY kits. To date, we have only produced these products in moderate quantities. We may not be able to maintain acceptable quality standards as we continue or ramp up production. For example, we have experienced crystallized matrix on some of our chips, which has interfered with chip performance. To achieve anticipated customer demand levels, we will need to scale-up our production capability and maintain adequate levels of inventory while manufacturing our products at a reasonable cost. We may not be able to produce sufficient quantities to meet market demand or manufacture our product at a reasonable cost. If we cannot achieve the required level and quality of production, we may need to outsource production or rely on licensing and other arrangements with third parties. This reliance could reduce our gross margins and expose us to the risks inherent in relying on others. We might not be able to successfully outsource our production or enter into licensing or other arrangements with these third parties, which would adversely affect our business.

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We depend on third-party products and services and limited sources of supply to develop and manufacture our products.

We rely on outside vendors to supply certain products and the components and materials used in our products. Some of these products, components and materials are obtained from a single supplier or a limited group of suppliers. Our MassARRAY system is comprised of several components, of which the following are currently obtained from a single supplier: Bruker Daltonics, Inc. supplies replacement components for our mass spectrometers, PSI, Inc. supplies our chips, Majer Precision Engineering, Inc. supplies the pins for the pin-tools and Paragon Medsystems LLC and Thermo Fischer Matrix who supply our nano dispenser liquid handling devices.

Our consumables also include components provided by sole suppliers, New England Biolabs, Epicentre, BioRad, and USB. In the event of any adverse developments with these vendors, our product supply may be interrupted, which would have an adverse impact on our business. In the past, we have experienced quality problems with and delays in receiving components used to produce our consumable chips, problems with laser reliability in our mass spectrometers supplied by Bruker and lengthy delays in obtaining lasers for replacement, problems with matrix crystallization on our chips, and also had technical difficulties with our pin-tool nanoliter dispenser device. We have also experienced software and operational difficulties with our MassARRAY Compact system. Our reliance on outside vendors generally and a sole or a limited group of suppliers in particular involves several risks, including:

• the inability to obtain an adequate supply of properly functioning, required products, components, and materials due to capacity constraints, product defects, a discontinuance of a product by a supplier, or other supply constraints;

• reduced control over quality and pricing of products, components, and materials; and

• delays and long lead times in receiving products, components, or materials from vendors.

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.

We have attempted to ensure that all clinical data and genetic and other biological samples that we receive from our subsidiaries and our clinical collaborators have been collected from volunteers who have provided our collaborators or us with appropriate consents for the data and samples provided for purposes which extend to include commercial diagnostic product development activities. We have attempted to ensure that data and samples that have been collected by our clinical collaborators are provided to us on an anonymous basis. We have also attempted to ensure that the volunteers from whom our data and samples are collected do not retain or have conferred on them any proprietary or commercial rights to the data or any discoveries derived from them. Our clinical collaborators are based in a number of different countries, and, to a large extent, we rely upon our clinical collaborators for appropriate compliance with the voluntary consents provided and with local law and regulation. That our data and samples come from and are collected by entities based in different countries results in complex legal questions regarding the adequacy of consents and the status of genetic material under a large number of different legal systems. The consents obtained in any particular country could be challenged in the future, and those consents could prove invalid, unlawful or otherwise inadequate for our purposes. Any findings against us, or our clinical collaborators, could deny us access to or force us to stop using some of our clinical or genetic resources, which would hinder our diagnostic product development efforts. We could become involved in legal challenges, which could consume a substantial proportion of our management and financial resources.

If we cannot obtain licenses to patented SNPs and genes, we could be prevented from obtaining significant revenue or becoming profitable.

The U.S. Patent and Trademark Office has issued and continues to issue patents claiming single nucleotide polymorphism, or SNP, and gene discoveries and their related associations and functions. If certain SNPs and

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genes are patented, we will need to obtain rights to those SNPs and genes to develop, use, and sell related assays and other types of products or services utilizing such SNPs and genes. Required licenses may not be available on commercially acceptable terms. If we were to fail to obtain licenses to certain patented SNPs and genes, we might never achieve significant revenue from our diagnostic product development.

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.

Some of the products we hope to develop involve new and unproven approaches or involve applications in markets that we are only beginning to explore. They are based on the assumption that information about genes and SNPs may help scientists better understand conditions or complex disease processes. Scientists generally have a limited understanding of the role of genes and SNPs in diseases, and few products based on gene discoveries have been developed. We cannot be certain that genetic information will play a key role in the development of diagnostics or other products in the future, or that any genetic-based findings would be accepted by diagnostic, pharmaceutical, or biotechnology companies or by any other potential market or industry segment. If we or our customers or collaborators are unable to generate valuable information that can be used to develop diagnostics or other products, the demand for our products, applications, and services will be reduced and our business will be harmed.

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.

We form research collaborations and licensing arrangements with collaborators to operate our business successfully. To succeed, we will have to maintain our existing relationships and establish additional collaborations and licensing arrangements. Our current strategy includes pursuing partnering opportunities with larger companies interested in or involved in the development of pharmaceutical and diagnostic products to potentially advance our disease gene discoveries and related targets toward drug or diagnostic development. Our strategy also includes obtaining licenses to third-party intellectual property rights and technologies, such as our exclusive license to noninvasive prenatal analysis rights that we acquired from ISIS (United States Patent No. 6,258,540 and foreign equivalents), to potentially expand our product portfolio and generate additional sources of revenue. If we do not achieve certain milestones in a timely manner, we risk losing our exclusive license rights from ISIS. We cannot be sure that we will be able to establish any additional research collaborations, licensing arrangements, or other partnerships necessary to develop and commercialize products or that we can do so on terms favorable to us. If we are unable to establish these collaborations or licensing arrangements, we may not be able to successfully develop any diagnostic or other products or applications and generate any milestone, royalty, or other revenue from sales of these products or applications. If our collaborations or licensing arrangements are not successful or we are not able to manage multiple collaborations successfully, our programs will suffer and we may never generate any revenue from sales of products based on licensed rights or technologies or under these collaborative or licensing arrangements. If we increase the number of collaborations or licensing agreements, it will become more difficult to manage the various relationships successfully and the potential for conflicts among the collaborators and licensees or licensors will increase. Conflicts with our collaborators, licensees or licensors, or other factors may lead to disputes over technology or intellectual property rights or product revenue, royalties, or other payments, which may adversely effect our business.

In addition, our government grants provide the government certain license rights to inventions resulting from funded work. Our business could be harmed if the government exercises those rights.

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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.

Our business strategy includes, in part, the development of noninvasive prenatal diagnostic and other products in collaboration with others, or utilizing the technology of others, and we intend to obtain commercialization or royalty rights to those products or technologies. If we are unable to obtain such rights, or are unable to do so on favorable financial terms, our revenue and profitability prospects could be substantially harmed. To date, we have initiated limited activities towards commercializing products developed in collaboration with, or utilizing the technology of, others. Even if we obtain commercialization rights, commercialization of products may require resources that we do not currently possess and may not be able to develop or obtain, or commercialization may be financially unattractive based upon the revenue-sharing terms offered by potential licensors or provided for in the relevant agreement.

Ethical, privacy, or other concerns about the use of genetic information could reduce demand for our products and services.

Genetic testing, including gender determination and Trisomy 21 (Down syndrome) testing, has raised ethical issues regarding privacy and the appropriate uses of the resulting information. For these reasons, governmental authorities may limit or otherwise regulate the use of genetic testing or prohibit testing for genetic predisposition to certain conditions, particularly for those that have no known cure. Such concerns may lead individuals to refuse to use genetics tests even if permitted. Any of these scenarios could reduce the potential markets for our products and services, which would seriously harm our business, financial condition, and results of operations.

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 have sourced or licensed components of our technology from other parties. For example, Bruker Daltonics supplies our replacement components for mass spectrometers, PSI, Inc. supplies our chips and Majer Precision Engineering supplies the pins for our present nanodispenser (pin-tool) product, and New England Biolabs, Epicentre and USB supply us with reagents used with our consumables. Our failure to maintain continued supply of such components, particularly in the case of sole suppliers, or the right to use these components would seriously harm our business, financial condition, and results of operations. As a result, in the event that demand for our products declines or does not meet our forecasts, we could have excess inventory or increased expenses or our margins could decrease which could have an adverse impact on our financial condition and business. In the event of any adverse developments with these vendors, our product supply may be interrupted, which would have an adverse impact on our business. Changes to or termination of our agreements or inability to renew our agreements with these parties or enter into new agreements with other suppliers could result in the loss of access to these aspects of our technology or other intellectual property rights or technologies that we may acquire from time to time and could impair, delay, or suspend our commercialization efforts. While we negotiate for agreement periods or notice of termination periods that provide us reasonable periods of time to secure alternative supplies, and require that such agreements may not be terminated without advance notice arbitrarily or without good reason, such as uncured breach or insolvency, such provisions may not provide us with adequate time to secure alternative supplies, provide us with access to alternative technologies on commercially acceptable terms, or otherwise provide us with adequate protection.

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 acquire additional businesses or technologies, or enter into other strategic transactions. For example, in November 2008, we completed the acquisition of the Center for Molecular Medicine, a CLIA licensed laboratory facility and in February 2009 we completed the acquisition of substantially all of the assets of SensiGen, LLC.

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Managing these and future acquisitions entails numerous operational and financial risks, including:

• the inability to retain key employees of any acquired businesses or hire enough qualified personnel to staff any new or expanded operations;

• the impairment of relationships with key customers of acquired businesses due to changes in management and ownership of the acquired businesses;

• the inability to sublease on financially acceptable terms excess leased space or terminate lease obligations of acquired businesses that are not necessary or useful for the operation of our business;

• the exposure to federal, state, local and foreign tax liabilities in connection with any acquisition or the integration of any acquired businesses;

• the exposure to unknown liabilities;

• higher than expected acquisition and integration expenses that would cause our quarterly and annual operating results to fluctuate;

• increased amortization expenses if an acquisition results in significant intangible assets;

• combining the operations and personnel of acquired businesses with our own, which would be difficult and costly;

• disputes over rights to acquired technologies or with licensors or licensees of those technologies; and

• integrating or completing the development and application of any acquired technologies, which would disrupt our business and divert management’s time and attention.

We may also attempt to acquire businesses or technologies or attempt to enter into strategic transactions that we are unable to complete. For example, in January 2009, we launched an exchange offer to acquire EXACT Sciences Corporation, but were not able to complete the transaction prior to EXACT Sciences selling and licensing a substantial portion of its assets and intellectual property to a third party. If we are unable to complete such transactions, we may expend substantial resources and ultimately not successfully complete the transaction. Such transactions may also distract management and result in other adverse effects on our business and operations.

We may not be able to successfully compete in the biotechnology and diagnostic industries.

The biotechnology and diagnostic industries are highly competitive. We expect to compete with a broad range of companies in the United States and other countries that are engaged in the development and production of products, applications, services, and strategies to analyze genetic information and strategies to develop and commercialize diagnostic, noninvasive prenatal diagnostic, and other products for customers in the clinical research and clinical marker validation and molecular medicine fields as well as diagnostic service laboratories, animal testing and food safety labs, and customers in other markets. They include:

• biotechnology, pharmaceutical, diagnostic, chemical, and other companies;

• academic and scientific institutions;

• governmental agencies; and

• public and private research organizations.

Many of our competitors have much greater financial, technical, research, marketing, sales, distribution, service, and other resources than we do. Our competitors may offer broader product lines and services and have greater name recognition than we do. Several companies are currently making or developing products that compete with our products. Our competitors may develop or market technologies or products that are more effective or commercially attractive than our current or future products, or that may render our technologies or products obsolete.

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We may potentially compete with our customers, which may adversely affect our business.

We have sold MassARRAY systems worldwide to pharmaceutical and biotechnology companies, academic research centers, and government laboratories. Some of our customers use our DNA analysis products to perform contract research services, or to perform genetics studies on their own disease populations for potential diagnostic and drug target identification in the same or similar manner as we have done. Although there are many potential contract research services opportunities and disease areas and diagnostic applications, our customers may seek service work or develop diagnostic assays or may target diseases areas that may overlap with those that we have chosen to pursue. In such cases we may potentially compete against our customers. Competition from our customers may adversely affect our services business or our ability to successfully commercialize diagnostic products.

If we cannot attract and retain highly-skilled personnel, our growth might not proceed as rapidly as we intend.

The success of our business will depend on our ability to identify, attract, hire, train, retain, maintain, and motivate highly skilled personnel, particularly sales, scientific, medical, and technical personnel, for our future success. Competition for highly skilled personnel is intense, and we might not succeed in attracting and retaining these employees. If we cannot attract and retain the personnel we require, we would not be able to expand our business as rapidly as we intend. In particular, if we lose any key member of our management team, we may not be able to find suitable replacements and our business may be harmed as a result. If our management team is not able to effectively manage us through these restructuring changes and transitions, our business, financial condition, and results of operations may be adversely affected. We do not carry “key person” insurance covering any of our officers or other employees.

If we do not effectively manage our business as it evolves, it could affect our ability to pursue opportunities and expand our business.

Evolution in our business has placed and may continue to place a significant strain on our personnel, facilities, management systems, and resources. We will need to continue to improve our operational and financial systems and managerial controls and procedures and train and manage our workforce. We will have to maintain close coordination among our various departments. If we fail to effectively manage the evolution of our business and the transition to also being a provider of diagnostic products as well as the significant restructuring changes that we have experienced, our ability to pursue business opportunities, expand our business, and sell our products and applications in new markets may be adversely affected.

We are subject to risks associated with our foreign operations.

We expect that a significant portion of our sales will continue to be made outside the United States. Approximately 50% of our sales were made outside of the United States during the year ended December 31, 2008, compared to 49% for the year ended December 31, 2007. A successful international effort will require us to develop relationships with international customers and collaborators, including distributors. We may not be able to identify, attract, retain, or maintain suitable international customers or collaborators. Expansion into international markets will require us to establish and grow foreign operations, hire additional personnel to run these operations, and maintain good relations with our foreign customers and collaborators or distributors. International operations also involve a number of risks not typically present in domestic operations, including:

• currency fluctuation risks;

• changes in regulatory requirements;

• costs and risks of deploying systems in foreign countries;

• licenses, tariffs, and other trade barriers;

• political and economic instability and possible country-based boycotts;

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• difficulties in staffing and managing foreign operations;

• potentially adverse tax consequences;

• the burden of complying with a wide variety of complex foreign laws and treaties; and

• different rules, regulations, and policies governing intellectual property protection and enforcement.

Our international operations are also subject to the risks associated with the imposition of legislation and regulations relating to the import or export of high technology products. We cannot predict whether tariffs or restrictions upon the importation or exportation of our products will be implemented by the United States or other countries.

If our production and laboratory facilities are damaged, our business would be seriously harmed.

Our only production facility for genetic analysis products is located in San Diego, California, where we also have laboratories. We also have laboratory facilities in Grand Rapids, Michigan. Damage to our facilities due to war, fire, natural disaster, power loss, communications failure, terrorism, unauthorized entry, or other events could prevent us from conducting our business for an indefinite period, could result in a loss of important data or cause us to cease development and production of our products. We cannot be certain that our limited insurance to protect against business interruption would be adequate or would continue to be available to us on commercially reasonable terms, or at all.

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 use controlled hazardous and radioactive materials in the conduct of our business, as well as biological materials that have the potential to transmit disease. The risk of accidental contamination or injury from these materials cannot be completely eliminated. If an accident with these substances occurs, we could be liable for any damages that result, which could seriously harm our business. Additionally, an accident could damage our research and manufacturing facilities and operations, resulting in delays and increased costs. Such damage and any expense resulting from delays, disruptions, or any claims may not be covered by our insurance policies.

We may not have adequate insurance if we become subject to product liability or other claims.

Our business exposes us to potential product liability and other types of claims and our exposure will increase as we and our partners and collaborators prepare to commercialize research-use-only or other types of molecular tests, including LDTs and diagnostics for prenatal and other applications. We have product and general liability insurance that covers us against specific product liability and other claims up to an annual aggregate limit of $5 million. Any claim in excess of our insurance coverage would have to be paid out of our cash reserves, which would have a detrimental effect on our financial condition. It is difficult to determine whether we have obtained sufficient insurance to cover potential claims. Also, we cannot assure you that we can or will maintain our insurance policies on commercially acceptable terms, or at all.

Negative conditions in the global credit markets may impair the liquidity and value of a portion of our investment portfolio.

As of December 31, 2008, our marketable securities classified as noncurrent consist of $9.4 million, reduced by approximately $3.7 million reflecting the change in market value, of ARS issued primarily by municipalities and insurance companies that have experienced failed auctions due to lack of liquidity at the time their interest rates were to reset. The recent negative conditions in the global credit markets and the financial services industry have prevented some investors from liquidating their holdings, including their holdings of ARS. As a result, certain of these types of securities are not fully liquid and we could be required to hold them until they are redeemed by the issuer or to maturity. In the event we need to access the funds that are in an illiquid state, we

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will not be able to do so without a loss of principal until a future auction on these investments is successful, the securities are redeemed by the issuer or they mature. Although the ARS have continued to pay interest according to their stated terms, based on valuation models and an analysis of other-than-temporary impairment factors, recognized losses of approximately $2.6 million and $1.1 million have been recorded for the years ended December 31, 2008 and 2007, respectively, reflecting the portion of ARS holdings that we have concluded have an other-than-temporary decline in value. If the credit ratings of the security issuers deteriorate or if uncertainties in these markets continue and any decline in market value is determined to be other-than-temporary, we would be required to further adjust the carrying value of the investment through an impairment charge, which could negatively affect our financial condition, cash flow and reported earnings. There is no guarantee that we will be able to liquidate our remaining ARS or might have to incur further recognized losses. It is possible that our ARS investments may be subject to credit rating downgrades, which could also affect the value of the securities and any ability we may have to liquidate these securities in the future.

The uncertainty of the current economic and political conditions could harm our revenues and operating results.

Current domestic and global economic conditions are uncertain and have continued to be volatile and deteriorate over the past several months. The recent turmoil in the economic environment in many parts of the world may continue to put pressure on global economic conditions. Our revenues and operating results may be affected by uncertain or changing economic and market conditions, including the recent crisis in the credit markets and financial services industry and general conditions in the global capital markets. If global economic and market conditions, or economic conditions in the United States or other key markets, remain uncertain or persist, spread, or deteriorate further, we may experience material impacts on our business, operating results, and financial condition.

Our cash asset-backed loan line are maintained with financial institutions which given the current financial crisis may not be fully insured or available.

We maintain significant amounts of cash and cash equivalents at financial institutions that are in excess of federally insured limits. Given the current instability of the financial services industry, there is no guarantee that we will not experience losses on our cash deposits or that our asset-backed loan line will be available for borrowing, or that we will be able to obtain future lines of credit.

Our stock price has been and may continue to be volatile, and your investment could suffer a decline in value.

The trading price of our common stock has been volatile and could be subject to wide fluctuations in price in response to various factors, many of which are beyond our control, including but not limited to:

• actual or anticipated variations in quarterly and annual operating results;

• announcements of technological innovations, clinical study results, or research and development progress or setbacks by us or our competitors;

• our success in entering into, and the success in performing under, licensing and product development and commercialization agreements with others;

• securities analysts’ earnings projections or securities analysts’ recommendations; and

• general market conditions, including the recent crisis in global financial markets.

The stock market in general, and The NASDAQ Global Market and the market for life sciences companies in particular, have experienced extreme price and volume fluctuations that may have been unrelated or disproportionate to the operating performance of the listed companies. There have been dramatic fluctuations in

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the market prices of securities of biotechnology companies. These price fluctuations may be rapid and severe and may leave investors little time to react. Broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance. Sharp drops in the market price of our common stock expose us to securities class-action litigation. Such litigation could result in substantial expenses and a diversion of management’s attention and resources, which would seriously harm our business, financial condition, and results of operations.

Item 1B.    UNRESOLVED STAFF COMMENTS

None.

Item 2.    PROPERTIES

We are headquartered in San Diego, California, with wholly-owned subsidiaries located in Hamburg, Germany, and Cambridge, England, New Delhi, India, Hong Kong, Grand Rapids, Michigan and Tokyo, Japan. We also have offices in Queensland, Australia, Beijing, China and Newton, Massachusetts. Collectively, we lease approximately 133,000 square feet under leases that expire at various dates through September 2015, each of which contains laboratory, office, manufacturing, or storage facilities.

The San Diego site is our company headquarters and houses our selling, general, and administrative offices, research and development facilities and manufacturing operations. The sites in Hamburg and Newton are used to support sales and distribution in Europe and the United States, respectively. The Newton site was acquired through our merger with Gemini Genomics in 2001 and is partially subleased. The site in Cambridge, England is used for sales and support activities performed in Europe. The site in Grand Rapids, Michigan houses our CLIA laboratory, SCMM. We believe our facilities are adequate for our current needs.

Item 3.    LEGAL PROCEEDINGS

In November 2001, we and certain of our current or former officers and directors were named as defendants in a class action shareholder complaint filed by Collegeware USA in the U.S. District Court for the Southern District of New York (now captioned In re Sequenom, Inc. IPO Securities Litigation) Case No. 01-CV-10831. Similar complaints were filed in the same District Court against hundreds of other public companies that conducted initial public offerings of their common stock in the late 1990s and 2000. In the complaint, the plaintiffs allege that our underwriters, certain of our officers and directors and we violated the federal securities laws because our registration statement and prospectus contained untrue statements of material fact or omitted material facts regarding the compensation to be received by and the stock allocation practices of the underwriters. The plaintiffs seek unspecified monetary damages and other relief. In October 2002, our officers and directors were dismissed without prejudice pursuant to a stipulated dismissal and tolling agreement with the plaintiffs. In February 2003, the District Court dismissed the claim against us brought under Section 10(b) of the Securities Exchange Act of 1934, without giving the plaintiffs leave to amend the complaint with respect to that claim. The District Court declined to dismiss the claim against us brought under Section 11 of the Securities Act of 1933.

In September 2003, pursuant to the authorization of a special litigation committee of our board of directors, we approved in principle a settlement offer by the plaintiffs. In September 2004, we entered into a settlement agreement with the plaintiffs. In February 2005, the District Court issued a decision certifying a class action for settlement purposes and granting preliminary approval of the settlement subject to modification of certain bar orders contemplated by the settlement. In August 2005, the District Court reaffirmed class certification and preliminary approval of the modified settlement. In February 2006, the District Court dismissed litigation filed against certain underwriters in connection with the claims to be assigned to the plaintiffs under the settlement. In April 2006, the District Court held a final fairness hearing to determine whether to grant final approval of the settlement. In December 2006, the U.S. Court of Appeals for the Second Circuit vacated the District Court’s

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decision certifying as class actions the six lawsuits designated as “focus cases.” Thereafter the District Court ordered a stay of all proceedings in all of the lawsuits pending the outcome of plaintiffs’ petition to the Second Circuit for rehearing en banc. In April 2007, the Second Circuit denied plaintiffs’ rehearing petition, but clarified that the plaintiffs may seek to certify a more limited class in the District Court. Accordingly, the settlement as originally negotiated was terminated pursuant to stipulation and will not receive final approval. Plaintiffs filed amended complaints in the six focus cases in August 2007. Sequenom is not one of the focus case issuers. In September 2007, Sequenom’s named officers and directors again extended the tolling agreement with the plaintiffs. Also in September 2007, the plaintiffs moved to certify the classes alleged in the focus cases and to appoint class representatives and class counsel in those cases. The focus case issuers filed motions to dismiss the claims against them in November 2007 and an opposition to plaintiffs’ motion for class certification in December 2007. The District Court denied the motions to dismiss in March 2008. On October 2, 2008, the plaintiffs withdrew their class certification motion. A deadline for the focus case defendants to answer the amended complaints has not been set.

On June 5, 2008, we were named as a defendant in a complaint filed by plaintiffs Beckman Coulter Inc. and Orchid Cellmark Inc. in the United States District Court for the Southern District of California. In the complaint, the plaintiffs allege that we are infringing three patents owned by Orchid Cellmark Inc. and licensed to Beckman Coulter Inc. by making and selling our iPLEX products and teaching our customers how to use the products. The plaintiffs seek a permanent injunction enjoining us from further infringement, and unspecified monetary damages, including lost profits, enhanced damages pursuant to 35 U.S.C. § 284, costs, attorneys’ fees and other relief as the court deems just and proper. On August 15, 2008, we filed an answer and counter claims against plaintiffs seeking declaratory judgments that the patents are not infringed and are invalid and/or unenforceable. Discovery is currently in progress. We believe that the plaintiffs’ claims are without merit and will vigorously defend against the claims advanced in the complaint.

On October 30, 2008, we filed a patent infringement suit against Ibis Biosciences, Inc., a subsidiary of Isis Pharmaceuticals, Inc. The complaint was served on the defendant in February 2009. Ibis has been acquired by Abbott Molecular. The lawsuit was filed in the United States District Court for the District of Delaware. The lawsuit alleges that the sale or offer for sale of the Ibis T5000 Biosensor System and related technology infringes three U.S. patents: 6,300,076, 6,500,621 and 7,419,787. We are seeking a permanent injunction enjoining the defendant from further infringement and monetary damages, including enhanced damages pursuant to 35 U.S.C. § 284, costs, attorneys’ fees and other relief as the court deems just and proper.

In addition, from time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business.

Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders during the fourth quarter of 2008.

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PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

(a) Our common stock is traded on The Nasdaq Global Market under the symbol “SQNM.” The following tables set forth the high and low sales prices for the Company’s common stock as reported on The Nasdaq Global Market for the periods indicated.

	High		Low
Year Ended December 31, 2008:
Fourth Quarter	$	26.72	$	12.71
Third Quarter		27.76		16.28
Second Quarter		15.96		5.07
First Quarter		9.40		5.06
Year Ended December 31, 2007:
Fourth Quarter	$	11.25	$	7.80
Third Quarter		7.19		4.33
Second Quarter		4.96		2.99
First Quarter		5.44		3.61

There were approximately 118 holders of record of our common stock as of February 2, 2009. We have not paid any cash dividends to date and do not anticipate any being paid in the foreseeable future.

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Performance Measurement Comparison*

The following graph compares the cumulative total stockholder return on our common stock between December 31, 2003 and December 31, 2008 with the cumulative total return of (i) the NASDAQ Composite Index (NASDAQ Index) and (ii) the NASDAQ Biotechnology Index (the NASDAQ Biotech Index), over the same period. This graph assumes the investment of $100.00 on December 31, 2003 in common stock, the NASDAQ Index and the NASDAQ Biotech Index, and assumes the reinvestment of any dividends.

* This Section is not “soliciting material” is not deemed “filed” with the SEC and is not to be incorporated by reference in any of our filing under the Securities Act of 1933 or the Securities Exchange Act of 1934 whether made before or after the date hereof without regard to any general incorporation language in any such filing.

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Item  6.    SELECTED FINANCIAL DATA

The following selected consolidated financial data is derived from our audited consolidated financial statements and should be read in conjunction with the consolidated financial statements and the notes to such statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this report. Historical results are not necessarily indicative of the results to be expected in the future.

	Years ended December 31,
	2008			2007			2006			2005			2004
	(In thousands, except per share data)
Consolidated statements of operations data
Revenues:
Consumables, MassARRAY and other product related	$	42,259		$	37,365		$	27,051		$	19,070		$	21,026
Services		4,817			3,524			1,023			—			199
Research and other		73			113			422			351			1,224
Total revenues		47,149			41,002			28,496			19,421			22,449
Costs and expenses:
Cost of consumables, product and services revenue		19,590			18,077			11,887			10,370			11,361
Research and development		27,455			14,352			11,939			11,930			18,627
Selling and marketing, general and administrative		42,735			31,148			22,425			22,382			23,328
Restructuring and long-lived asset impairment charge		—			—			10			593			2,207
Amortization of acquired intangibles		—			—			1,511			2,014			3,075
Total costs and expenses		89,780			63,577			47,772			47,289			58,598
Loss from operations		(42,631	)		(22,575	)		(19,276	)		(27,868	)		(36,149	)
Other income (expense):
Interest income		1,592			1,781			906			633			773
Interest expense		(139	)		(17	)		(20	)		(325	)		(434	)
Loss on marketable securities		(2,584	)		(1,071	)		—			—			—
Other (expense) income, net		(181	)		(101	)		191			94			33
Loss before income taxes		(43,943	)		(21,983	)		(18,199	)		(27,466	)		(35,777	)
Income tax (expense) benefit		(211	)		—			622			929			1,152
Net loss	$	(44,154	)	$	(21,983	)	$	(17,577	)	$	(26,537	)	$	(34,625	)
Net loss per share, basic and diluted	$	(0.83	)	$	(0.57	)	$	(0.71	)	$	(2.00	)	$	(2.62	)
Weighted average shares outstanding, basic and diluted		53,129			38,865			24,842			13,276			13,219

	As of December 31,
	2008		2007		2006		2005		2004
	(In thousands)
Consolidated balance sheet data
Cash, cash equivalents, marketable securities and restricted cash	$	99,700	$	52,150	$	26,330	$	8,678	$	37,944
Working capital		103,246		52,690		23,651		5,403		28,479
Total assets		140,484		76,046		39,881		24,436		58,486
Total long-term obligations		4,779		5,744		3,525		1,363		5,700
Total stockholders’ equity		116,213		54,265		25,450		11,743		38,072

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We are a diagnostic testing and genetics analysis company committed to providing products, services, diagnostic testing, applications and genetic analysis products that translate the results of genomic science into solutions for biomedical research, translational research, molecular medicine applications, and agricultural, livestock, and other areas of research. Our development and commercialization efforts in various diagnostic areas include non-invasive prenatal diagnostics, oncology, infectious diseases, and other disorders.

Our proprietary MassARRAY system, comprised of hardware, software applications, consumable chips and reagents, is a high performance (in speed, accuracy and cost efficiency) nucleic acid analysis platform that quantitatively and precisely measures genetic target material and variations. Our platform is widely accepted as a leading high-performance DNA analysis platform for the fine mapping genotyping market and is gaining traction in newer developing markets, such as epigenomics and clinical microbiology. Our customers include premier clinical research laboratories, bio-agriculture, bio-technology and pharmaceutical companies, academic institutions, various government agencies worldwide, as well as our CLIA certified lab, Sequenom Center for Molecular Medicine. To provide customer support for our expanding user base and in an effort to maximize market penetration, we have established direct sales and support personnel serving North America, Europe, India, Australia and Asia, in addition to regional distribution partners in France, Israel, Russia, Eastern Europe, South Korea, New Zealand, Singapore, Taiwan, Kuwait, Saudi Arabia and Turkey.

We are researching, developing and pursuing the commercializion of various non-invasive molecular diagnostic tests for prenatal genetic disorders and diseases, oncology, infectious diseases, and other diseases and disorders. We have branded our diagnostic technology for prenatal diagnostics under the trademark SEQureDx. Our efforts in molecular diagnostics are focused on non-invasive diagnostics currently using our proprietary MassARRAY system, however, we may in the future employ other platforms with our applications as may be more suitable on a case-by-case basis considering optimum test performance and commercialization factors.

Currently, we are primarily focused on developing and commercializing prenatal screening and diagnostic tests using our non-invasive, circulating cell-free fetal (ccff) nucleic acid based assay technology, which is non-invasive to the womb, using a simple maternal blood draw, for prenatal diagnosis, in order to provide more fundamental and reliable information about the fetus early in pregnancy. Our planned screening and diagnostic tests in areas of women’s health, oncology, and infectious disease are also non-invasive and are expected to use simple blood draws from patients rather than invasive procedures such as surgery.

Supporting our initiatives in women’s health, oncology and infectious disease, in January 2009, we entered into an agreement for the acquisition of the complete AttoSense portfolio of gene-based molecular tests and related assets from SensiGen LLC. The acquisition includes highly-sensitive and specific tests for the detection and monitoring of human papillomavirus (HPV) (the primary cause of cervical and head and neck cancers), systemic lupus erythematosus (Lupus), chronic kidney disease (CKD), inflammatory bowel disease (IBD) and other tests, all of which utilize our proprietary MassARRAY platform. This acquisition was completed in February 2009.

We plan to launch through our CLIA laboratory a non-invasive prenatal screening LDT test for Rhesus D and a carrier screening test for Cystic Fibrosis during the second quarter of 2009; a non-invasive prenatal screening LDT test for trisomies (Trisomy 21 and potentially Trisomies 18 and 13) in June 2009; and a non-invasive prenatal screening LDT test for gender-linked disorders (our Fetal^xy screen) during the fourth quarter of 2009. Concurrent with our LDT commercialization activities, we plan to conduct the development, validation, and other activities necessary to file submissions with the Food and Drug Administration (FDA) seeking approval for selected diagnostic tests. We plan to file submissions with the FDA for our prenatal trisomy tests and Rhesus D genotyping in 2010.

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Our MassARRAY technology is accepted as a leading high-performance DNA analysis system for the fine mapping genotyping market. We derive revenue primarily from sales of our MassARRAY hardware, software and consumable products. Our standard MassARRAY system combines the following basic components, which contributes to the high level of performance in terms of speed, accuracy and cost efficiency:

• a MALDI-TOF mass spectrometer, which uses an established analytical method that we have adapted for DNA analysis;

• proprietary biochemical reagents for sample preparation, coated silicon chips known as the SpectroCHIP^®, liquid handling hardware to prepare DNA for analysis, and dispensing hardware to dispense analyte onto the SpectroCHIP carrier; and

• bioinformatics software that records, calculates, and reports the data generated by the mass spectrometer.

Our MassARRAY system provides reliable results for a wide range of DNA/RNA analysis applications including single nucleotide polymorphism, or SNP, genotyping detection of mutations, analysis of copy number variants and other structural genome variations, quantitative gene expression analysis, quantitative methylation marker analysis, comparative sequence analysis of haploid organisms, SNP discovery, and oligonucleotide quality control. These applications are provided through proprietary application software that operates on the MassARRAY platform and through the purchase of consumable chips and reagent kits. While the MassARRAY system is versatile across many applications, it is a robust and cost-effective genotyping solution for fine mapping projects enabled through our iPLEX multiplexing assay reagents and chips which permits multiplexed SNP analysis using approximately the same amount of reagents and chip surface area as is used for a single sample analysis.

Our research and development efforts in genetic analysis are committed to producing new and improved components and applications for the MassARRAY system that deliver greater system versatility and excellent data quality at a competitive price per data point. These research and development activities and new applications also facilitate and support our diagnostics initiatives.

We have targeted customers conducting quality genotyping and performing fine mapping studies, candidate gene studies, comparative sequencing, gene expression analysis, and epigenetic analysis in the molecular medicine market. Epigenetic analysis is an important part of cancer and other research areas. DNA methylation analysis is the most frequently studied epigenetic change, and examines changes in the presence or absence of methyl groups in specific areas of the DNA.

We are targeting customers for our genetic analysis technology and products across four segments: biomedical research and molecular medicine; oncology and translational research; clinical research, public health and biodefense; and agriculture and livestock. We believe the market and opportunities for growth for fine mapping genotyping are increasing as more researchers are completing their larger genomic studies such as whole genome scans. Epigenetic analysis is an emerging market that, along with gene expression analysis, is increasingly being utilized by researchers in conjunction with genotyping to attempt to fully understand genetic cause and effect.

As of December 31, 2008, our revenues consisted of sales of MassARRAY hardware, software, consumables, maintenance agreements, and from services contracts through our genetic analysis contract research services business. The impact of our product offerings and contract research services business on future revenues, margins, expenses, and cash flows remains uncertain and depends on many factors as described in Item 1A of this report under the caption “Risk Factors.”

We expect revenues from molecular diagnostics through out-licensing and commercialization of our non-invasive prenatal diagnostics technology, including technology for Rhesus D incompatibility using a real-

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time polymerase chain reaction platform, to be minimal for the foreseeable future. To the extent that revenues are realized from our molecular diagnostic tests, including non-invasive prenatal diagnostics technology or from our prior disease gene discoveries, if at all, they may fluctuate significantly as revenues will be based upon the occurrence of certain milestones, our reliance upon and the progress made by our collaborative partners, successful product development and commercialization, and product demand, all of which are uncertain and difficult to predict. As a result, our entitlement to, and the timing and amounts of, any revenues from molecular diagnostic products licensing and milestone payments and royalty or revenue sharing payments on future diagnostic or other product sales are uncertain and difficult to predict. To achieve such revenues we will likely be dependent upon the efforts, resources and success of present and future collaborators and licensees who may need to invest significant dollar amounts in research and development efforts, commercialization efforts, clinical trials, and obtaining regulatory approvals over several years. Such revenues, if any, are uncertain and also depend on many factors as described in Item 1A of this report under the caption “Risk Factors.”

We have a history of recurring losses from operations and have an accumulated deficit of $526.3 million as of December 31, 2008. Our capital requirements to sustain operations, including research and development projects, have been and will continue to be significant. As of December 31, 2008, we had available cash and cash equivalents and current marketable securities totaling $98.3 million and working capital of $103.2 million.

On July 1, 2008, we closed an underwritten public offering of our common stock totaling 5,500,000 shares of our common stock at $15.50 per share, with the underwriters exercising their option to purchase an additional 825,000 shares on July 8, 2008. Including the additional shares, the offering resulted in aggregate net proceeds of approximately $91.8 million after deducting underwriting discounts, commissions and estimated transaction expenses.

During 2007, we closed a $20.0 million registered direct offering of our common stock to several new and existing investors, as well as a $30.5 million private placement of our common stock. Under the terms of the registered direct offering we issued and sold 6,666,666 shares of our common stock at $3.00 per share, with aggregate net proceeds of approximately $18.3 million after deducting placement agents’ fees and transaction expenses. Under the terms of the private placement we issued and sold 3,383,335 shares of our common stock at $9.00 per share, with aggregate net proceeds of approximately $28.1 million after deducting placement agents’ fees and estimated transaction expenses.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and related notes. Certain of these accounting policies that we believe are the most critical to our investors’ understanding of our financial results and conditions are discussed below. Our significant accounting policies are more fully described in Note 2 to our Consolidated Financial Statements included elsewhere in this report. In preparing these financial statements, management uses its judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Management considers many factors in selecting appropriate financial accounting policies and controls and in developing the estimates and assumptions that are used in the preparation of the consolidated financial statements. Management must apply significant judgment in this process. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an assessment that falls within the range of reasonable estimates. The application of these accounting policies involves the exercise of judgment and use of estimates and assumptions as to future uncertainties and, as a result, actual results could differ from these estimates.

Revenue Recognition

We recognize revenue in accordance with current accounting rules, which primarily include the Securities and Exchange Commission’s Staff Accounting Bulletin, or SAB, No. 104, “Revenue Recognition” (SAB 104). In

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accordance with SAB 104, revenues are recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed and determinable, and collectibility is reasonably assured. We consider Emerging Issues Task Force No. 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables,” (EITF 00-21) and for MassARRAY system sales, the arrangement consideration is allocated among the separate units of accounting based on their relative fair values. The separate units of accounting are typically the system and software itself and maintenance contracts sold at the time of the system sale. Revenue is deferred for fees received before earned. Revenues from sales of consumables are recognized generally upon shipment and transfer of title to the customer. Revenue from sales of MassARRAY systems with standard payment terms of net 30 days are recognized upon shipment and transfer of title to the customer or when all revenue recognition criteria are met. Our contracts do not contain refund or cancellation clauses. Revenues from the sale or licensing of our proprietary software are recognized upon transfer of title to the customer or the duration of the software license. We recognize revenue on maintenance services for ongoing customer support over the maintenance period. Revenues from genetic services are recognized at the completion of key stages in the performance of the service, which is generally delivery of SNP assay information. Grant revenue is recorded as the research expenses relating to the grants are incurred, provided that the amounts received are not refundable if the research is not successful. Amounts received that are refundable if the research is not successful would be recorded as deferred revenue and recognized as revenue upon the grantor’s acceptance of the success of the research results.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates are as follows:

• Accrued acquisition and integration costs. To the extent that exact amounts were not determinable at the time of acquisition, we estimated amounts for direct costs of the acquisition of Gemini Genomics and Axiom Biotechnologies and the related integration costs in accordance with EITF 95-3, “Recognition of Liabilities in Connection with a Purchase Business Combination” and Statement of Financial Accounting Standards No. 141, “Business Combinations” (SFAS 141). Amounts incurred relating to acquisition and integration costs totaled $27.4 million and as of December 31, 2008 and 2007, approximately $0.5 million and $0.7 million remained accrued, respectively. The amount accrued at December 31, 2008, represents our remaining lease payments, net of estimated sublease income of $0.5 million from existing subleased space. If we do not receive all the amounts due to us under non-cancelable subleases, we will incur additional expense.

• Goodwill and impairment of long-lived assets. The purchase price allocation for acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values. Additionally, we must determine whether an acquired entity is considered to be a business or a set of net assets, because a portion of the purchase price can only be allocated to goodwill in a business combination. Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to annual impairment tests. The amounts and useful lives assigned to other intangible assets impact future amortization. Determining the fair values and useful lives of intangible assets requires the use of estimates and the exercise of judgment. These judgments can significantly affect our net operating results.

We periodically re-evaluate the original assumptions and rationale utilized in the establishment of the carrying value and estimated lives of our long-lived assets. The criteria used for these evaluations include management’s estimate of the asset’s continuing ability to generate income from operations and

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positive cash flows in future periods as well as the strategic significance of any intangible assets in our business objectives. If assets are considered to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value of the assets. No impairment of long-lived assets was recorded in 2008, 2007 or 2006. Intangible assets totaled $0.1 million, net of accumulated amortization, at December 31, 2008.

• Allowance for Doubtful Accounts. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. We evaluate the collectability of our accounts receivable balance based on a combination of factors. We regularly analyze customer accounts, review the length of time receivables are outstanding and review the historical loss rates if the financial condition of our customers were to deteriorate additional allowances could be required.

• Reserves for obsolete and slow-moving inventory. We operate in an industry characterized by rapid improvements and changes to technology and products. The introduction of new products by us or our competitors can result in our inventory being rendered obsolete or requiring us to sell items at a discount to cost. We estimate the recoverability of our inventory by reference to our internal estimates of future demands and product life cycles. If we incorrectly forecast demand for our products or inadequately manage the introduction of new product lines, we could materially impact our financial statements by having excess inventory on hand. Our future estimates are subjective and could be incorrect. During 2008, slow-moving inventory reserves of $0.7 million were charged against cost of goods sold and the total reserve was $1.8 million at December 31, 2008.

• Income taxes. In accordance with SFAS No. 109, “Accounting for Income Taxes,” (SFAS 109), the provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for the expected future tax benefit to be derived from tax loss and credit carryforwards. Deferred tax assets and liabilities are determined using the enacted tax rates in effect for the years in which those tax assets are expected to be realized. A valuation allowance is established when it is more likely than not the future realization of all or some of the deferred tax assets will not be achieved. The evaluation of the need for a valuation allowance is performed on a jurisdiction by jurisdiction basis, and includes a review of all available positive and negative evidence. As of December 31, 2007, we have maintained a valuation allowance against U.S. and foreign deferred tax assets that we concluded have not met the “more likely than not” threshold required under SFAS 109.

Due to the adoption of SFAS No. 123(R) “Share-Based Payment,” we recognize excess tax benefits associated with share-based compensation to stockholders’ equity only when realized. When assessing whether excess tax benefits relating to share-based compensation have been realized, we follow the with-and-without approach, excluding any indirect effects of the excess tax deductions. Under this approach, excess tax benefits related to share-based compensation are not deemed to be realized until after the utilization of all other tax benefits available to us.

Effective January 1, 2007, we adopted FASB Interpretation No. (FIN) 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109,” (FIN 48) which clarifies the accounting for uncertainty in tax positions. FIN 48 requires that we recognize the impact of a tax position in our financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Any interest and penalties related to uncertain tax positions will be reflected in income tax expense.

• Stock-based compensation. We account for stock-based compensation in accordance with SFAS No. 123(R), “Share-Based Payment,” (SFAS 123(R)). Under the provisions of SFAS 123(R), stock-based compensation cost is estimated at the grant date based on the award’s fair-value as calculated by the Black-Scholes option valuation model (BSM) and is recognized as expense over the requisite service period. The BSM model requires various highly judgmental assumptions including volatility, forfeiture rates, and expected option life. If any of these assumptions used in the BSM model

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change significantly, stock-based compensation expense may differ materially in the future from that recorded in the current period.

Recent Accounting Pronouncements

In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (SFAS 162). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements that are presented in conformity with generally accepted accounting principles in the United States SFAS 162 was effective November 15, 2008 and the adoption of this pronouncement did not have a material impact on our consolidated financial statements.

In April 2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of Intangible Assets” (FSP 142-3). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS 142. This change is intended to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141R and U.S. GAAP. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The requirements for determining useful lives must be applied prospectively to intangible assets acquired after the effective date and the disclosure requirements must be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date. FSP 142-3 could have a material impact on the useful life determination of any intangible asset acquisitions completed in future periods.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (SFAS 161). This statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. This statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The adoption of SFAS 161 is not expected to have a material impact on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of Accounting Research Bulletin No. 51” (SFAS 160). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 is effective for fiscal years beginning after December 15, 2008. We do not expect the adoption of SFAS 160 to have a material effect on our consolidated results of operations and financial condition.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (SFAS 157). This statement establishes a common definition for fair value to be applied to GAAP requiring use of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. SFAS 157 is effective for financial assets and financial liabilities for fiscal years beginning after November 15, 2007. Issued in February 2008, FSP 157-1 “Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13,” removed leasing transactions accounted for under SFAS No. 13 and related guidance from the scope of SFAS 157. FSP 157-2 “Partial Deferral of the Effective Date of

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Statement 157” (FSP 157-2), deferred the effective date of SFAS 157 for all nonfinancial assets and nonfinancial liabilities to fiscal years beginning after November 15, 2008. The implementation of SFAS 157 for financial assets and financial liabilities, effective January 1, 2008, did not have a material impact on our consolidated financial statements. See Note 3, “Marketable Securities and Fair Value Measurements” for further discussion on our financial assets.

SFAS No. 141(R), “Business Combinations” (SFAS 141(R)), was issued in December 2007. SFAS 141(R) established principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree. SFAS 141(R) also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141(R) will become effective for fiscal years beginning after December 15, 2008. The impact of adopting SFAS 141(R) on our consolidated financial statements will depend on the economic terms of any future business combination transactions.

On January 1, 2008, we adopted the provision SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS 159). SFAS 159 allows certain financial assets and liabilities to be recognized, at our election, at fair market value, with any gains or losses for the period recorded in the statement of income. SFAS 159 includes available-for-sales securities in the assets eligible for this treatment. Currently, we record the gains or losses for the period in comprehensive income and in the equity section of the balance sheet. At this time, we have not elected to account for any available-for-sale securities using the provisions of SFAS 159.

On January 1, 2008 we adopted EITF Issue No. 07-1, “Accounting for collaborative Arrangements Related to the Development and Commercialization of Intellectual Property” (EITF 07-1). Companies may enter into arrangements with other companies to jointly develop, manufacture, distribute, and market a product. Often the activities associated with these arrangements are conducted by the collaborators without the creation of a separate legal entity (that is, the arrangement is operated as a “virtual joint venture”). The arrangements generally provide that the collaborators will share, based on contractually defined calculations, the profits or losses from the associated activities. Periodically, the collaborators share financial information related to product revenues generated (if any) and costs incurred that may trigger a sharing payment for the combined profits or losses. The consensus requires collaborators in such an arrangement to present the result of activities for which they act as the principal on a gross basis and report any payments received from (made to) other collaborators based on other applicable GAAP or, in the absence of other applicable GAAP, based on analogy to authoritative accounting literature or a reasonable, rational, and consistently applied accounting policy election. Since our collaborative arrangements do not incorporate such revenue- and cost-sharing arrangements, the adoption of EITF 07-1 did not have an impact on our financial statements.

In June 2007, the FASB ratified EITF No. 07-3, “Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities” (EITF 07-3). EITF 07-3 requires that nonrefundable advance payments for goods and services that will be used or rendered in future research and development activities pursuant to executory contractual arrangements be deferred and recognized as an expense in the period that the related goods are delivered or services are performed. We adopted EITF 07-3 as of January 1, 2008, and its adoption did not have a material impact on our consolidated financial statements.

Results of Operations

Years ended December 31, 2008 and 2007

Revenues

Total revenues were $47.1 million and $41.0 million for the years ended December 31, 2008 and 2007, respectively. MassARRAY and other product related revenues are derived from the sale of MassARRAY systems, consumables, sales and licensing of our proprietary software, maintenance contracts, and license fees from end-users.

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Consumable sales increased to $19.5 million in 2008 from $16.5 million in 2007. The increase in 2008 compared to 2007 was a result of an increase in our installed base of MassARRAY Compact systems as well as increased demand for our iPLEX genotyping assay.

MassARRAY and other product related revenue increased to $22.7 million in 2008 from $20.8 million in 2007. The increase of $1.9 million was primarily due to an increase in MassARRAY system hardware and software revenue to $19.5 million in 2008 from $18.4 million in 2007, which was attributable to an increase in our selling price during 2008. Revenue from other product sales, including MassARRAY system maintenance contracts, license fees and royalties for the years ended December 31, 2008 and 2007 was $3.2 million and $2.5 million, respectively. Maintenance revenue increased by approximately $0.7 million from the comparative period due to higher service contracts in effect over our installed base.

We recorded genetic analysis service revenues of $4.8 million for the year ended December 31, 2008, compared to $3.5 million in service revenues for the year ended December 31, 2007. The increase from 2007 is attributable to growth in our contract research service business primarily in the commercial, clinical analysis and the academic research markets.

Research and other revenue was $0.1 million in 2008 and $0.1 million 2007. The timing of research revenues depends upon our expenditures on grant research and the receipt of the grant funding from the sponsoring agencies. We expect grant revenue to be minimal going forward.

Domestic and non-U.S. revenues were $23.8 million and $23.3 million, respectively, for the year ended December 31, 2008, and $22.2 million and $18.8 million, respectively, for the year ended December 31, 2007.

Our revenues have historically fluctuated from period to period and likely will continue to fluctuate substantially in the future based upon the unpredictable sales cycle for the MassARRAY system, revenue recognition criteria, economic conditions, the overall acceptance and demand for our new and existing commercial products and services as well as the future adoption rates of our diagnostics assays.

Cost of Product and Service Revenues and Gross Margins

Cost of product revenues were $15.1 million and $14.6 million and gross margins were 64% and 61% for the years ended December 31, 2008 and 2007, respectively. The increase in gross margin for product revenues in 2008 compared to 2007 is attributable to increased consumable sales that generally have higher average gross margins compared to systems sales, along with a favorable mix of new systems at higher selling prices with additional software at higher margins.

Cost of service revenues were $4.5 million and $3.5 million and gross margins were 7.0% and 1.2% for the years ended December 31, 2008 and 2007, respectively. Our genetic analysis contract research service business incurred higher expenses, primarily in salaries and related personnel expenses, as operations increased in scale to accommodate a higher volume of research contracts. Gross margins on contract research service revenues are dependent on the particular market the services are being performed, the size of the projects and the pricing terms.

Our overall gross margins were 58% and 56% for the years ended December 31, 2008 and 2007, respectively. The increase in overall gross margin in 2008 is attributable to increased consumables sales at a higher gross margin, a higher average selling price for new system sales and higher margins in contract research services due to a higher volume of activity.

We believe that gross margin in future periods will be affected by, among other things, the selling price for systems and consumables, consumable sales per MassARRAY system sold, the mix of products and contract research services sold, the mix of systems and consumables sold, competitive conditions, costs of goods, sales volumes, discounts offered, sales through distributors, payor contracts for diagnostics tests, the volume of

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diagnostics tests sold and adoption rates of our diagnostic tests, inventory reserves and obsolescence charges required and royalty payment obligations on in-licensed technologies.

Research and Development Expenses

Research and development costs were $27.5 million and $14.4 million for the years ended December 31, 2008 and 2007, respectively. These expenses consist primarily of salaries and related personnel expenses, improvements to our existing products, validation of products under development, and expenses relating to work performed under research contracts.

The increase in research and development expenses of $13.1 million for 2008 compared to 2007 primarily resulted from increased headcount and travel costs of $3.8 million, operating supplies of $2.8 million, clinical sample collection, consulting and collaboration costs of $2.9 million related to our non-invasive prenatal technology development, headcount based overhead allocation expense of $2.5 million, share-based compensation expense of $1.1 million, as well as depreciation and office expenses of $1.0 million. These increases were offset by $1.0 million in the absorption of research and development expenses to cost of service revenue.

We expect our research and development expenses to increase in 2009 compared to 2008, as we increase our investment in the development of non-invasive prenatal nucleic acid based tests and as we continue to invest in new products and applications for our MassARRAY platform.

Sales and Marketing Expenses

Sales and marketing costs were $24.3 million and $17.0 million for the years ended December 31, 2008 and 2007, respectively. These expenses consist primarily of salaries and related expenses for sales and marketing, customer support, and business development personnel and their related department expenses.

The increase in selling and marketing expenses of $7.3 million for 2008 compared to 2007 primarily resulted from increased headcount and travel of $3.1 million, $1.6 million for higher share-based compensation expense, $0.9 million for higher headcount-based overhead allocation charges, $0.4 million for higher advertising, trade shows and public relations expenses, $0.3 million of consultant expenses for sales and marketing projects associated with diagnostic operations, $0.3 million in bad debt expense related to accounts receivable write-offs, $0.3 million for higher operating supplies, $0.3 million for higher office operating expenses and $0.1 million for higher sales bonus compensation.

We expect our sales and marketing headcount and associated expenses to increase in 2009 compared to 2008, as we strengthen our sales force and continue building our commercial development team for our non-invasive prenatal diagnostic technology.

General and Administrative Expenses

General and administrative costs were $18.4 million and $14.1 million for the years ended December 31, 2008 and 2007, respectively. These expenses consist primarily of salaries and related expenses for legal, finance, and human resource personnel, and their related department expenses.

The increase in general and administrative expenses of $4.3 million for 2008 compared to 2007 primarily resulted from increased legal expense of $2.9 million related to ongoing litigation, share-based compensation of $1.6 million, headcount and travel expense of $1.4 million, audit and tax related fees and expenses of $0.9 million, information technology expenses of $0.8 million for computers and software licenses, consultant expenses of $0.3 million and depreciation and other office expenses of $0.3 million. These increases were partially offset by reduced headcount-based overhead allocation of $3.3 million as well as higher absorption of overhead costs of $0.6 million.

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We expect general and administrative costs to increase in 2009 compared to 2008, as we build our infrastructure in order to support our anticipated growth as well as continued increases in legal costs due to ongoing litigation.

Interest Income

Interest income was $1.6 million in 2008 compared to $1.8 million in 2007. The decrease in 2008 compared to 2007 was due to a change in our investment policy, which restricted our marketable securities investments exclusively to U.S. Government backed financial instruments that yield a lower overall return compared to our prior investment portfolio, despite higher cash balances following our public offering in July 2008.

Loss on Marketable Securities

Loss on marketable securities was $2.6 million in 2008 compared to $1.1 million in 2007. The recognized loss was due to an other-than-temporary impairment in our investments in auction rate securities. The increase in recognized losses in 2008 compared to 2007 is due to additional declines in the market value of these auction rate securities due to ongoing difficulties in global credit markets. If the credit ratings of the security issuers deteriorate or if uncertainties in these markets continue and any decline in market value of our remaining auction rate security investments is determined to be other-than-temporary, we would be required to adjust the carrying value of the investment through additional impairment charges.

Interest Expense

Interest expense was $139,000 and $17,000 for 2008 and 2007, respectively. The increase in 2008 compared to 2007 is due to higher balances on our asset-backed loan commencing in September 2007.

Income Tax Expense

Income tax expense of $211,000 for the year ended December 31, 2008 was primarily due to statutory tax liabilities resulting from our foreign operations. There was no comparable income tax expense for the year ended December 31, 2007.

Results of Operations

Years ended December 31, 2007 and 2006

Revenues

Total revenues were $41.0 million and $28.5 million for the years ended December 31, 2007 and 2006, respectively. MassARRAY and other product related revenues are derived from the sale of MassARRAY systems, consumables, sales and licensing of our proprietary software, maintenance contracts, and license fees from end-users.

Consumable sales increased to $16.5 million in 2007 from $12.9 million in 2006. The increase in 2007 compared to 2006 was a result of an increase in our installed base of MassARRAY Compact systems as well as demand for our iPLEX genotyping assay.

MassARRAY and other product related revenue increased to $20.8 million in 2007 from $14.1 million in 2006. The increase of $6.7 million was primarily due to an increase in MassARRAY system hardware and software sales to $18.4 million in 2007 from $11.9 million in 2006. Revenue from other product sales, including MassARRAY system maintenance contracts, license fees and royalties, for the years ended December 31, 2007 and 2006 was $2.5 million and $2.2 million, respectively.

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We recorded genetic analysis service revenues of $3.5 million for the year ended December 31, 2007, compared to $1.0 million in service revenues for the year ended December 31, 2006. The increase from 2006 is attributable to growth in our contract research service business primarily in the clinical analysis and academic research markets.

Research and other revenue was $0.1 million in 2007 and $0.4 million 2006. During the year ended December 31, 2006, we recognized $0.3 million of revenue related to the license of certain proprietary genetic content to a third party. The timing of research revenues depends upon our expenditures on grant research and the receipt of the grant funding from the sponsoring agencies. We expect grant revenue to be minimal going forward.

Domestic and non-U.S. revenues were $22.2 million and $18.8 million, respectively, for the year ended December 31, 2007, and $16.0 million and $12.5 million, respectively, for the year ended December 31, 2006.

Cost of Product and Service Revenues and Gross Margins

Cost of product revenues was $14.6 million and $11.4 million and gross margins were 61% and 58% for the years ended December 31, 2007 and 2006, respectively. The increase in gross margin for product revenues in 2007 compared to 2006 is attributable to higher systems sales with a favorable mix of new systems at higher margins versus trade-ins and strategic system placements at lower margins, as well as increased consumable sales that generally have higher average gross margins compared to systems sales.

Cost of service revenues was $3.5 million and $0.5 million and gross margins were 1.2% and 49%, respectively, for the years ended December 31, 2007 and 2006. Our genetic analysis contract research service business incurred higher expenses, primarily in salaries and related personnel expenses, as operations continue to become fully functional in anticipation of service contract requirements. Gross margins on contract research service revenues are dependent on the particular contract terms of the work undertaken.

Our overall gross margin was 56% and 58% for the years ended December 31, 2007 and 2006, respectively. The decrease in overall gross margin in 2007 is attributable to lower margins within contract research services as we increase operations to become fully functional, offset by an overall increase in consumables sales that sell at higher average gross margins.

Research and Development Expenses

Research and development costs were $14.4 million and $11.9 million for the years ended December 31, 2007 and 2006, respectively. These expenses consist primarily of salaries and related personnel expenses, improvements to our existing products, validation of products under development, and expenses relating to work performed under research contracts.

The increase in research and development expenses of $2.5 million for 2007 compared to 2006 primarily resulted from increased headcount and travel costs of $2.2 million, consultant and collaboration costs of $1.8 million related to our non-invasive prenatal technology development and MassARRAY product development, operating supplies of $0.9 million, share-based compensation costs of $0.3 million, headcount-based overhead allocation expense of $0.2 million and office expenses of $0.1 million. These increases were offset by $3.0 million in the absorption of cost of service revenue as our contract research service operations became fully functional during 2007.

Sales and Marketing Expenses

Sales and marketing costs were $17.0 million and $11.0 million for the years ended December 31, 2007 and 2006, respectively. These expenses consist primarily of salaries and related expenses for sales and marketing, customer support, and business development personnel and their related department expenses.

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The increase in selling and marketing expenses of $6.0 million for 2007 compared to 2006 primarily resulted from increased headcount and travel of $4.0 million, $0.6 million of consultant expenses for sales and marketing projects associated with our non-invasive prenatal diagnostics technology, $0.5 million for advertising and public relations expenses, $0.4 million for higher share-based compensation expense, $0.4 million for higher headcount-based overhead allocation charges and $0.4 million for higher office and operating expenses. These increases were offset by a reduction in start-up costs in 2007 compared to 2006 of $0.3 million related to our China office.

General and Administrative Expenses

General and administrative costs were $14.1 million and $11.4 million for the years ended December 31, 2007 and 2006, respectively. These expenses consist primarily of salaries and related expenses for legal, finance, and human resource personnel, and their related department expenses.

The increase in general and administrative expenses of $2.7 million for 2007 compared to 2006 primarily resulted from increased headcount and travel expense of $1.0 million, share-based compensation of $1.2 million, legal expense of $0.5 million related to our patent portfolio, consultant expenses of $0.4 million, insurance costs and other office expenses of $0.2 million. These increases were partially offset by reduced headcount-based overhead allocation of $0.2 million, lower administrative expenses of $0.1 million and higher absorption of overhead costs of $0.5 million.

Asset Impairment and Restructuring Charges

During 2005, we introduced a cost reduction plan that included a reduction of existing headcount by approximately 30 across all departments by the end of 2005. We incurred a charge of $0.8 million in 2005 relating to severance and related expenses in connection with this headcount reduction. At December 31, 2005, we had an accrued balance of $0.3 million in respect of the restructuring charges representing the remaining payout of severance costs with the remaining charges incurred during 2006. During 2007, the Company incurred no charges related to this restructuring and does not anticipate to incur any further expenses related to this cost reduction plan.

Amortization of Acquired Intangibles

In connection with the acquisition of Gemini Genomics, plc in 2001, we acquired approximately $18.7 million of intangible assets, including clinical data collections and patent rights that were being amortized over three to five years. No amortization was recorded in 2007 and $1.5 million was recorded as amortization in 2006. As of December 31, 2006, these intangible assets were fully amortized.

Interest Income

Interest income was $1.8 million in 2007 compared to $0.9 million in 2006. The increase in 2007 compared to 2006 was due to higher cash, cash equivalents and short-term investment balances as a result of our registered direct offering of our common stock with net aggregate proceeds of approximately $18.3 million after deducting placement agents’ fees and transaction expenses in April 2007 and the private placement of our common stock with net aggregate proceeds of approximately $28.1 million after deducting placement agents’ fees and transaction expenses in October 2007.

Loss on Marketable Securities

Realized loss on marketable securities was $1.1 million compared to no realized loss in 2006. The realized loss was due to an other-than-temporary impairment on one of our investments in auction rate securities. If the credit ratings of the security issuers deteriorate or if uncertainties in these markets continue and any decline in

49

market value is determined to be other-than-temporary in our remaining auction rate security investments, we would be required to adjust the carrying value of the investment through additional impairment charges.

Interest Expense

Interest expense was $17,000 and $20,000 for 2007 and 2006, respectively. Our interest expense balance remains lower due to the payoff of credit facilities and capital leases after our private placement funding in June 2006, offset by the utilization of our asset-backed loan commencing in September 2007.

Income Tax Benefit

The deferred tax benefit of $0.6 million for the year ended December 31, 2006 was primarily due to the amortization on the intangible assets, including clinical data collections and patent rights, acquired from Gemini Genomics. There was no comparable benefit for the year ended December 31, 2007.

Liquidity and Capital Resources

As of December 31, 2008, cash, cash equivalents and current marketable securities totaled $98.3 million, compared to $50.8 million at December 31, 2007. Our cash equivalents and current marketable securities are held in U.S. Government securities with ratings of AAA and repurchase agreements collateralized by U.S. Government securities with ratings of AAA.

As of December 31, 2008, we have $5.7 million of auction rate securities, which reflects a $3.7 million adjustment to the principal value of $9.4 million. Additional discussion with respect to the risks and uncertainties associated with our auction rate securities is included in the “Risk Factors” in Item 1A of this report, in “Quantitative and Qualitative Disclosures about Market Risk” in Item 7A of this report and in the notes to our consolidated financial statements included elsewhere in this report.

We have a history of recurring losses from operations and have an accumulated deficit of $526.3 million as of December 31, 2008. Our capital requirements to sustain operations, including research and development projects, have been and will continue to be significant. As of December 31, 2008 and 2007, we had working capital of $103.2 million and $50.8 million, respectively.

On July 1, 2008, we closed an underwritten public offering of our common stock totaling 5,500,000 shares of our common stock at $15.50 per share, with the underwriters exercising their option to purchase an additional 825,000 shares on July 8, 2008. Including the additional shares, the offering resulted in aggregate net proceeds of approximately $91.8 million after deducting underwriting discounts, commissions and estimated transaction expenses.

During 2007, we closed a $20.0 million registered direct offering of our common stock to several new and existing investors, as well as a $30.5 million private placement of our common stock. Under the terms of the registered direct offering we issued and sold 6,666,666 shares of our common stock at $3.00 per share, with aggregate net proceeds of approximately $18.3 million after deducting placement agents’ fees and transaction expenses. Under the terms of the private placement we issued and sold 3,383,335 shares of our common stock at $9.00 per share, with aggregate net proceeds of approximately $28.1 million after deducting placement agents’ fees and estimated transaction expenses.

We consider the material drivers of our cash flow to be sales volumes, working capital, inventory management and operating expenses. Our principal sources of liquidity are our cash, cash equivalents and current marketable securities. Cash used in operations for the year ended December 31, 2008 was $34.6 million compared to $17.4 million for 2007. The use of cash was primarily a result of the net loss of $44.2 million for the year ended December 31, 2008, increased by $6.5 million from inventory balances due to greater on-hand

50

systems for anticipated systems sales, $0.1 million from accounts receivable, $0.3 million from other current asset and prepaid expenses, as well as $0.4 million in deferred rent. Cash usages were partially offset by stock-based compensation of $7.3 million, non-cash depreciation and amortization of $2.9 million, a recognized loss on our auction rate securities of $2.6 million, adjustment to our bad debt provision resulting in an expense of $0.4 million, restricted stock charges of $0.2 million, a loss on disposals of fixed assets of $0.2 million, $2.5 million from higher accounts payable and accrued expense balances due to increased operations during 2008, change in deferred revenue of $0.7 million and other changes in our operating assets and liabilities of $0.1 million. At our current and anticipated level of operating loss, we expect to continue to incur an operating cash outflow for the next several years.

Investing activities, other than the net changes in our current marketable securities and restricted cash that provided $1.2 million, consists of purchases for capital equipment that used $4.9 million in cash during the year ended December 31, 2008, compared to $3.5 million and $1.2 million for the same periods in 2007 and 2006, respectively. Additionally, we paid $0.4 million in cash related to our acquisition of CMM that closed in November 2008.

Net cash provided by financing activities was $93.8 million during the year ended December 31, 2008. Financing activities during the year ended December 31, 2008, included net receipts of $91.8 million from the issuance of common stock from our July 2008 underwritten public offering. Additionally, $0.6 million was received on fundings from our asset-backed loan and $2.0 million from the exercise of warrants, stock options and from employee contributions under our employee stock purchase plan, offset by approximately $0.6 million in payments on our asset-backed loan.

The following table summarized our contractual obligations as of December 31, 2008 (in thousands):

Contractual obligations	Total		Less Than 1 Year		1-3 Years		After 3 Years
Open purchase orders	$	4,435	$	4,435	$	—	$	—
Long-term debt obligation		1,221		647		574		—
Collaborations		24,178		6,254		2,798		15,125
Operating leases		35,994		6,791		11,838		17,364
Total contractual obligations	$	65,828	$	18,127	$	15,210	$	32,489

Future operating lease commitments for leases have not been reduced by future minimum sublease rentals to be received through December 2010 aggregating $0.5 million. Open purchase orders are primarily for inventory items and research and development supplies. Collaborations primarily consist of agreements with institutions to conduct sponsored research and clinical study agreements.

In September 2005, we entered into an amendment to our lease for our corporate headquarters in San Diego. The lease amendment provides for the deferral of approximately $3.2 million of the monthly rent payments by reducing the monthly payments through September 30, 2007 and increasing the aggregate monthly payments by the deferred amount for the remaining term of the lease, from October 1, 2007 to September 30, 2012. The total obligation under the lease remains unchanged. The contractual obligation table above reflects the deferral of these rent payments.

Long-term debt obligations include the associated interest payable on this borrowing. Other commitments and contingencies that may result in contractual obligations to pay are described in the notes to our consolidated financial statements included elsewhere in this report.

Based on our current plans, we believe our cash, cash equivalents and current marketable securities, will be sufficient to fund our operating expenses and capital requirements through 2010. However, the actual amount of

51

funds that we will need will be determined by many factors, some of which are beyond our control, and we may need funds sooner than currently anticipated. These factors include but are not limited to:

• the size of our future operating losses;

• the level of our and our distributors’ success in selling our MassARRAY products and services and LDT services through SCMM;

• the terms and conditions of sales contracts, including extended payment terms;

• our ability to introduce and sell new products and services and successfully reduce inventory levels of earlier products;

• the level of our selling, general and administrative expenses;

• the extent of our investment in diagnostic technology, including prenatal genetic analysis technology, molecular diagnostics and noninvasive prenatal diagnostic technology, development, commercialization, and regulatory approval;

• our success in, and the expenses associated with, researching, developing and commercializing diagnostic products, alone or in collaboration with our partners, and obtaining any required regulatory approval for those products;

• the level of our success alone or in collaboration with our partners in launching and selling any diagnostic products and services;

• the extent of our research and development pursuits, including our level of investment in MassARRAY product research and development, and diagnostic assay and other technology research and development;

• the extent to which we enter into, maintain, and derive revenues from licensing agreements, including agreements to out-license our noninvasive prenatal analysis technology, research and other collaborations, joint ventures and other business arrangements;

• the level of our legal expenses, including those expenses associated with intellectual property protection and those expenses and any damages payments associated with litigation, including intellectual property litigation;

• the extent to which we acquire, and our success in integrating, technologies or companies;

• our ability to liquidate any ARS holdings;

• the level of our expenses associated with the audit of our consolidated financial statements as well as compliance with other corporate governance and regulatory developments or initiatives; and

• regulatory changes and technological developments in our markets.

At December 31, 2008, we had outstanding stand-by letters of credit with financial institutions totaling $1.1 million related to our building and operating leases, which will remain in place until the expiration of our Newton, Massachusetts building lease agreement in December 2010.

Item 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Marketable Securities

The primary objective of our investment activities is to preserve principal while at the same time maximizing the income we receive from our investments without significantly increasing risk. Some of the securities that we invest in may have market risk. This means that a change in prevailing interest rates may cause the fair value of the principal amount of the investment to fluctuate. For example, if we hold a security that was issued with a fixed interest rate at the then-prevailing rate and interest rates later rise, the fair value of the principal amount of our investment will probably decline. To minimize this risk in the future, we revised our

52

investment policy in April 2008 to maintain our portfolio of cash equivalents and marketable securities in a variety of securities, including U.S. Government securities with ratings of AAA, and repurchase agreements collateralized by U.S. Government securities with ratings of AAA. Our investment policy includes a minimum quality rating for all new investments, as well as limits the amount of credit exposure to only issuances from the U.S. Government. If an investment we hold falls below this level, we research the reasons for the fall and determine if we should continue to hold the investment in order to minimize our exposure to market risk of the investment.

We account for our marketable securities in accordance with SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” and originally classified these securities as “available-for-sale.” Consistent with our investment policy guidelines in effect when originally purchased, the auction rate security (ARS) investments held by us all had AAA/AA credit ratings at the time of purchase. At December 31, 2008, $9.4 million of principal was invested in ARS. The ARS held are private placement securities with various long-term nominal maturities with interest rates reset through a dutch auction each month, except for one ARS that resets every 92 days. The monthly auctions historically have provided a liquid market for these securities. The investments in ARS represent interests in collateralized debt obligations supported by insurance securitizations and other structured credits, including corporate bonds and to a lesser degree, pools of residential and commercial mortgages. With the liquidity issues experienced in global credit and capital markets, the ARS held at December 31, 2008 have experienced multiple failed auctions as the amount of securities submitted for sale has exceeded the amount of purchase orders.

Due to changes in the underlying assumptions utilized in our discounted cash flow analyses and that our holdings of ARS are not required for operational purposes through 2010, which allows time for the securities to return to full value, we have classified all ARS investments as noncurrent assets on the consolidated balance sheet at December 31, 2008 of $5.7 million. Although the ARS continue to pay interest according to their stated terms, based on changes in assumptions and input from our valuation models and an analysis of other-than-temporary impairment factors, a recognized loss of approximately $2.6 million and $1.1 million was recorded for the years ended December 31, 2008 and 2007, respectively, of which $1.1 million represented the reclassification of previously recorded unrealized losses in other comprehensive income during 2008 and reflects the portion of ARS holdings that we have concluded have an other-than-temporary decline in value. The $2.6 million and $1.1 million impairment charges did not have a material impact on our liquidity or financial flexibility. Any future fluctuation in fair value related to our ARS investments would be recorded as a charge to operations as appropriate.

Since there is a lack of observable market quotes on our investment portfolio of marketable securities in ARS, we utilize valuation models including those that are based on expected cash flow streams and collateral values, including assessments of counterparty credit quality, default risk underlying the security, discount rates and overall capital market liquidity. The valuation of our investment portfolio is subject to uncertainties that are difficult to predict. Factors that may impact our valuation include changes to credit ratings of the securities as well as to the underlying assets supporting those securities, rates of default of the underlying assets, underlying collateral value, discount rates, counterparty risk and ongoing strength and quality of market credit and liquidity. In the event we need to access the ARS investments that are in an illiquid state, we will not be able to do so without the possible loss of principal, until a future auction for these investments is successful or they are redeemed by the issuer or they mature. The market value of these securities may decline.

Foreign currency rate fluctuations

We have foreign subsidiaries whose functional currencies are the Great British Pound, or GBP, the Japanese Yen, or Yen, and the Euro, or EUR. The subsidiaries’ accounts are translated from the relevant functional currency to the U.S. dollar using the current exchange rate in effect at the balance sheet date, for balance sheet accounts, and using the average exchange rate during the period for revenues and expense accounts. The effects of translation are recorded as a separate component of stockholders’ equity. Our

53

subsidiaries conduct their business with customers in local currencies. Additionally, we occasionally invoice Australian customers in their local currency. Exchange gains and losses arising from these transactions are recorded using the actual exchange differences on the date of the transaction. We have not taken any action to reduce our exposure to changes in foreign currency exchange rates, such as options or futures contracts, with respect to transactions with our subsidiaries or transactions with our customers where the invoicing currency is not the U.S. dollar.

The table below sets forth our currency exposure (i.e., those transactional exposures that give rise to the net currency gains and losses recognized in the income and expenditure account) on our net monetary assets and liabilities. These exposures consist of our monetary assets and liabilities that are not denominated in the functional currency used by us or our subsidiary having the asset or liability.

Functional currency of operations	As of December 31, 2008 Net foreign monetary assets/(liabilities)
	AUS dollars		Euro
	($ in millions)
USD	$	0.5	$	(0.1	)

A movement of 10% in the U.S. dollar to Australian dollar exchange rate would create an unrealized gain or loss of approximately $38,000. A movement of 10% in the U.S. dollar to Euro exchange rate would create an unrealized gain or loss of approximately $19,000. We had no off balance sheet, or unrecognized, gains and losses in respect of financial instruments used as hedges at the beginning or end of the year ended December 31, 2008. We had no deferred gains or losses during the years ended December 31, 2008, 2007 or 2006.

Inflation

We do not believe that inflation has had a material adverse impact on our business or operating results during the periods presented.

Item 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our consolidated financial statements and the Reports of Ernst & Young LLP, our Independent Registered Public Accounting Firm, are included in this report on Pages F-l through F-28.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A.    CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the timelines specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the year covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2008 to ensure that (a) the information required to be disclosed by us in the reports that we file or submit under the Securities

54

Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (b) such information is accumulated and communicated to our management, including our principal executive officer and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management have concluded that the disclosure controls and procedures are effective at the reasonable assurance level. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.

Management’s Report on Internal Control Over Financial Reporting

Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:

(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Management is responsible for establishing and maintaining adequate internal control over financial reporting for the company, as defined in Exchange Act Rules 13a-15(f).

Management has used the framework set forth in the report entitled Internal Control-Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of our internal control over financial reporting as of December 31, 2008. Based on our assessment, management, including our Chief Executive Officer and Chief Financial Officer has concluded that our internal controls over financial reporting was effective as of December 31, 2008. The effectiveness of our internal control over financial reporting as of December 31, 2008 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Changes in Internal Control Over Financial Reporting

An evaluation was also performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of any change in our internal control over financial reporting that occurred during our last fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. That evaluation did not identify any change in our internal control over financial reporting that occurred during our latest fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Report of Independent Registered Public Accounting Firm

on Internal Control Over Financial Reporting

The Board of Directors and Stockholders of Sequenom, Inc.

We have audited Sequenom, Inc.’s internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Sequenom Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Sequenom, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008 based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the accompanying consolidated balance sheets of Sequenom, Inc. as of December 31, 2008 and 2007, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2008 of Sequenom, Inc. and our report dated March 6, 2009 expressed an unqualified opinion thereon.

/s/    ERNST & YOUNG LLP

San Diego, California

March 6, 2009

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Item 9B.    OTHER INFORMATION

None

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PART III

Certain information required by Part III is omitted from this report because we will file with the Securities and Exchange Commission a definitive proxy statement within 120 days after the end of our fiscal year for our annual meeting of stockholder (the “Proxy Statement”), and the information included in the Proxy Statement is incorporated herein by reference.

Item 10.    DIRECTORS, AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item is incorporated by reference to our Proxy Statement under the heading “Election of Directors.” Information regarding executive officers is set forth in Item 1 of Part I of this report and is incorporated herein by reference.

We have adopted a code of business conduct and ethics for directors, officers (including our principal executive, financial and accounting officers) and all employees, which we refer to as our Code of Business Conduct and Ethics. The Code of Business Conduct and Ethics is available on our website at http://www.sequenom.com. Stockholders may request a free copy of our Code of Business Conduct and Ethics from:

Sequenom, Inc.

Attention: Investor Relations

3595 John Hopkins Court

San Diego, CA 92121-1331

(858) 202-9000

If we make any substantive amendments to the code of business conduct and ethics or grant any waiver from a provision of the code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website. We will promptly disclose on our website (i) the nature of any amendment to the policy that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and (ii) the nature of any waiver, including an implicit waiver, from a provision of the policy that is granted to one of these specified individuals, the name of such person who is granted the waiver and the date of the waiver.

Section 16(a) Beneficial Ownership Reporting Compliance

Item 405 of Regulation S-K calls for disclosure of any known late filing or failure by an insider to file a report required by Section 16 of the Exchange Act. This disclosure is incorporated by reference from the information in the section entitled “Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement.

Item 11.    EXECUTIVE COMPENSATION

The information required by this item is incorporated herein by reference from the information in the section entitled “Executive Compensation” in the Proxy Statement.

Item 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT    AND RELATED STOCKHOLDER MATTERS

The information required by this item is incorporated herein by reference from the information in the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Securities Authorized for Issuance under Equity Compensation Plans” in the Proxy Statement.

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Item 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR    INDEPENDENCE

The information required by this item is incorporated herein by reference from the information in the sections entitled “Certain Transactions” and “Independence of the Board of Directors” in the Proxy Statement.

Item 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated herein by reference from the information in the section entitled “Principal Accountant Fees and Services” in the Proxy Statement.

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PART IV

Item 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

The financial statements of Sequenom, Inc. are included herein as required under Item 8 of this report. See Index to Financial Statements on page F-l.

(a)(2) Financial Statement Schedules

Schedule II—Valuation and Qualifying Accounts. The other financial statement schedules have been omitted because they are either not required, not applicable, or the information is otherwise included.

    (3) Exhibits

The exhibits listed below are required by Item 601 of Regulation S-K. Each management contract or compensatory plan or arrangement required to be filed as an exhibit to this report has been identified.

Exhibit Number	Description of Document
3.1(11)	Restated Certificate of Incorporation of the Registrant.
3.2(15)	Restated bylaws of Registrant, as amended.
3.3(27)	Registrant’s Certificate of Designation of Series A Junior Participating Preferred Stock.
4.1(11)	Specimen common stock certificate.
4.2(27)	Rights Agreement dated as of March 3, 2009, between the Registrant and American Stock Transfer and Trust Company, LLC.
4.3(27)	Form of Right Certificate.
10.1(1)	Form of Warrant Agreement between the Registrant and holders of the Series C Preferred Stock warrants.
10.2(11)	Form of Indemnification Agreement between the Registrant and each of its officers and directors.
10.3(1)#	1994 Stock Plan.
10.4(1)#	1994 Stock Plan Form of Non-Qualified Stock Option Grant.
10.5(1)#	1994 Stock Plan Form of Incentive Stock Option Grant.
10.6(1)#	1994 Stock Plan Form of Stock Restriction Agreement.
10.7(1)#	1998 Stock Option/Stock Issuance Plan.
10.8(1)#	1998 Stock Option/Stock Issuance Plan Form of Notice of Grant of Stock Option.
10.9(1)#	1998 Stock Option/Stock Issuance Plan Form of Stock Option Agreement.
10.10(1)#	1998 Stock Option/Stock Issuance Plan Form of Stock Purchase Agreement.
10.11(1)#	1998 Stock Option/Stock Issuance Plan Form of Stock Issuance Agreement.
10.12(22)#	1999 Stock Incentive Plan, as amended.
10.13(1)#	1999 Employee Stock Purchase Plan.
10.14(1)#	1999 Stock Incentive Plan Form of Notice of Grant of Stock Option.
10.15(1)#	1999 Stock Incentive Plan Form of Stock Option Agreement.
10.16(23)#	2006 Equity Incentive Plan, as amended.
10.17(11)#	2006 Equity Incentive Plan Form of Notice of Grant of Stock Option.

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Exhibit Number	Description of Document
10.18(11)#	2006 Equity Incentive Plan Form of Stock Option Agreement.
10.19(24)#	2006 Equity Incentive Plan Form of Exercise Notice.
10.20(26)#	2006 Equity Incentive Plan Form of Restricted Stock Unit Award Grant Notice.
10.21(26)#	2006 Equity Incentive Plan Form of Restricted Stock Unit Award Agreement.
10.22(2)	Business Loan Agreement, dated March 3, 2000, between the Registrant and Union Bank of California.
10.23(3)	Building Lease Agreement, dated March 29, 2000, between the Registrant and TPSC IV LLC, a Delaware limited liability company.
10.24(4)#	Employment Agreement between Registrant and Charles Cantor, Ph.D.
10.25(5)#	Exec-U-Care Plan.
10.26(14)#	Employment Agreement, dated July 19, 2004, by and between the Registrant and Clarke Neumann.
10.27(6)*	Diagnostic Platform Benchmarking Study and Evaluation, dated October 25, 2004, by and between the Registrant and Siemens AG.
10.28(6)#	Form of Stock Issuance Agreement under 1999 Stock Incentive Plan.
10.29#	Amended and Restated Employment Agreement, dated December 15, 2008, by and between the Registrant and Harry Stylli, Ph.D.
10.30(7)	Amendment Number One to Lease, dated March 29, 2000, by and between the Registrant and TPSC IV LLC dated September 9, 2005.
10.31(7)	Common Stock Warrant, dated September 9, 2005, issued to Kwacker, Ltd.
10.32(7)#	Employment Agreement Amendment, dated September 12, 2005, by and between the Registrant and Dr. Charles R. Cantor.
10.33(8)*	License Agreement, dated October 14, 2005, by and between the Registrant and Isis Innovation Limited.
10.34(9)	Amended and Restated Securities Purchase Agreement, dated March 30, 2006, by and among the registrant, ComVest Investment Partners II LLC, LB I Group Inc., Pequot Private Equity Fund IV, L.P. and Siemens Venture Capital GmbH.
10.35(9)	Form of Warrant issued pursuant to the Amended and Restated Securities Purchase Agreement dated March 30, 2006.
10.36(10)#	Letter agreement dated April 6, 2006, by and between the Registrant and John E. Lucas.
10.37(11)	Registration Rights Agreement dated June 6, 2006 by and between the Registrant, ComVest Investment Partners II LLC, LB I Group Inc., Pequot Private Equity Fund IV, L.P. and Siemens Venture Capital GmbH.
10.38(12)#	Letter agreement dated August 21, 2006, by and between the Registrant and Paul W. Hawran.
10.39(13)*	Amendment to Exclusive License of Technology Agreement dated October 19, 2006, by and between the Registrant and ISIS Innovation Limited.
10.40(13)*	Supply Agreement dated November 3, 2006, by and between the Registrant and Bruker Daltonics Inc.
10.41(16)#	Form of Restricted Stock Bonus Grant Notice under 2006 Equity Incentive Plan.
10.42(16)#	Form of Restricted Stock Bonus Agreement under 2006 Equity Incentive Plan.
10.43(17)	Letter agreement dated February 14, 2007, by and between the Registrant and Paul Hawran
10.44(17)*	Collaboration and License Agreement dated January 24, 2007, between the Registrant and Lenetix Medical Screening Laboratory, Inc.

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Exhibit Number	Description of Document
10.45(18)	Placement Agency Agreement dated April 25, 2007, between the Registrant and Lehman Brothers Inc.
10.46(19)	Letter agreement dated June 25, 2007, by and between the Registrant and Kathleen Wiltsey.
10.47(19)	Letter agreement dated July 2, 2007, by and between the Registrant and Richard Alan Lerner, M.D.
10.48(20)	Form of Purchase Agreement, dated October 25, 2007, by and between the registrant and the various purchasers of shares of the Registrant’s common stock.
10.49(21)*	Amendment to Exclusive License of Technology Agreement dated November 5, 2007, by and between the Registrant and ISIS Innovation, Limited.
10.50(25)#	2008 Executive Officer Bonus Program.
10.51#	Non-Employee Director Compensation Policy.
10.52#	Amended and Restated Change in Control Severance Benefit Plan.
10.53#	Deferred Compensation Plan, as amended.
21.1	Subsidiaries of the Registrant.
23.1	Consent of Independent Registered Public Accounting Firm.
31.1	Certification of Principal Executive Officer pursuant to Rule13a-14(a) and Rule 15d-14(a) of the Securities and Exchange Act, as amended.
31.2	Certification of Principal Financial Officer pursuant to Rule13a-14(a) and Rule 15d-14(a) of the Securities and Exchange Act, as amended.
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 # Management contract or compensatory plan.

 * Certain confidential portions of this Exhibit have been omitted pursuant to a request for confidential treatment. Omitted portions have been filed separately with the Securities and Exchange Commission.

(1) Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (No. 333-91665), as amended.

(2) Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999.

(3) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.

(4) Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (No. 333-91665), as amended, which exhibit is hereby supplemented with an additional Schedule A filed with the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000.

(5) Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2003.

(6) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004.

(7) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed September 14, 2005.

(8) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005.

(9) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed April 3, 2006.

(10) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed April 10, 2006.

(11) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed June 6, 2006.

(12) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed August 25, 2006.

62

(13) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006.

(14) Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2005.

(15) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed December 7, 2007.

(16) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed January 24, 2007.

(17) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.

(18) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed April 25, 2007.

(19) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007.

(20) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed October 26, 2007.

(21) Incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007.

(22) Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2006.

(23) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed June 2, 2008.

(24) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed June 6, 2006.

(25) Incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007.

(26) Incorporated by reference to the Registrant’s Registration Statement on Form S-8 (No. 333-152230) filed July 10, 2008.

(27) Incorporated by reference to the Registrant’s Current Report on Form 8-K filed March 4, 2009.

63

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: March 12, 2009

SEQUENOM, INC.
By:	/S/    HARRY STYLLI
	Harry Stylli, Ph.D. President and Chief Executive Officer

POWER OF ATTORNEY

Know all men by these presents, that each person whose signature appears below constitutes and appoints Harry Stylli and Paul Hawran, and each of them, as his attorneys-in-fact and agents, each with power of substitution in any and all capacities, to sign any amendments to this annual report on Form 10-K, and to file the same with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that the attorney-in-fact or his substitute or substitutes may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

Signature	Title	Date
/s/    HARRY STYLLI, PH.D.         Harry Stylli, Ph.D.	President and Chief Executive Officer and Director (Principal Executive Officer)	March 12, 2009
/s/    PAUL HAWRAN         Paul Hawran	Chief Financial Officer (Principal Financial and Accounting Officer)	March 12, 2009
/s/    CHARLES R. CANTOR, PH.D.         Charles R. Cantor, Ph.D.	Chief Scientific Officer and Director	March 12, 2009
/s/    HARRY F. HIXSON, JR., PH.D.         Harry F. Hixson, Jr., Ph.D.	Chairman of the Board of Directors	March 12, 2009
/s/    ERNST-GUNTER AFTING, PH.D., M.D.         Ernst-Gunter Afting, Ph.D., M.D.	Director	March 12, 2009
/s/    JOHN FAZIO         John Fazio	Director	March 12, 2009
/s/    RICHARD A. LERNER, M.D.         Richard A. Lerner, M.D.	Director	March 12, 2009
/s/    RONALD M. LINDSAY, PH.D.         Ronald M. Lindsay, Ph.D.	Director	March 12, 2009
/s/    KATHLEEN M.WILTSEY         Kathleen M. Wiltsey	Director	March 12, 2009

64

SEQUENOM, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2008 and 2007	F-3
Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006	F-4
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2008, 2007 and 2006	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006	F-6
Notes to Consolidated Financial Statements	F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Sequenom, Inc.

We have audited the accompanying consolidated balance sheets of Sequenom, Inc. as of December 31, 2008 and 2007, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2008. Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Sequenom, Inc. at December 31, 2008 and 2007, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Sequenom, Inc.’s internal control over financial reporting as of December 31, 2008, based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 6, 2009, expressed an unqualified opinion thereon.

/s/ ERNST & YOUNG LLP

San Diego, California

March 6, 2009

F-2

SEQUENOM, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share information)

	December 31,
	2008			2007
Assets
Current assets:
Cash and cash equivalents	$	68,338		$	13,116
Marketable securities		29,991			37,704
Restricted cash		1,371			1,330
Accounts receivable, net		10,642			10,957
Inventories, net		10,631			4,191
Other current assets and prepaid expenses		1,311			1,094
Total current assets		122,284			68,392
Equipment and leasehold improvements, net		9,195			5,959
Intangible assets		114			79
Goodwill		2,398			—
Marketable securities		5,748			929
Other assets		745			687
Total assets	$	140,484		$	76,046
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	8,321		$	8,408
Accrued expenses		8,389			5,760
Accrued acquisition and integration costs		237			237
Deferred revenue		1,444			873
Current portion of asset-backed loan		647			424
Total current liabilities		19,038			15,702
Deferred revenue, less current portion		454			335
Other long-term liabilities		3,958			4,437
Long-term portion of asset-backed loan		574			823
Long-term accrued acquisition and integration costs, less current portion		247			484
Commitments and contingencies
Stockholders’ equity:
Convertible preferred stock, par value $0.001; authorized shares—5,000,000, no shares issued or outstanding at December 31, 2008 or 2007, respectively.		—			—
Common stock, par value $0.001; authorized shares—185,000,000; issued and outstanding shares 60,943,469 and 44,888,656 at December 31, 2008 and 2007, respectively		61			44
Additional paid-in capital		641,098			536,022
Accumulated other comprehensive income		1,328			319
Accumulated deficit		(526,274	)		(482,120	)
Total stockholders’ equity		116,213			54,265
Total liabilities and stockholders’ equity	$	140,484		$	76,046

See accompanying notes.

F-3

SEQUENOM, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share information)

	Year ended December 31,
	2008			2007			2006
Revenues:
Consumables	$	19,535		$	16,530		$	12,930
MassARRAY and other product related		22,724			20,835			14,121
Services		4,817			3,524			1,023
Research and other		73			113			422
Total revenues		47,149			41,002			28,496
Costs and expenses:
Cost of consumables and products revenue		15,109			14,594			11,369
Cost of services revenue		4,481			3,483			518
Research and development		27,455			14,352			11,939
Selling and marketing		24,299			17,015			10,993
General and administrative		18,436			14,133			11,432
Restructuring and long-lived asset impairment charge		—			—			10
Amortization of acquired intangibles		—			—			1,511
Total costs and expenses		89,780			63,577			47,772
Loss from operations		(42,631	)		(22,575	)		(19,276	)
Interest income		1,592			1,781			906
Loss on marketable securities		(2,584	)		(1,071	)		—
Interest expense		(139	)		(17	)		(20	)
Other (expense) income, net		(181	)		(101	)		191
Loss before income tax		(43,943	)		(21,983	)		(18,199	)
Income tax (expense) benefit		(211	)		—			622
Net loss	$	(44,154	)	$	(21,983	)	$	(17,577	)
Net loss per share, basic and diluted	$	(0.83	)	$	(0.57	)	$	(0.71	)
Weighted average shares outstanding, basic and diluted		53,129			38,865			24,842

See accompanying notes.

F-4

SEQUENOM, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share information)

	Common Stock			Additional Paid-In Capital		Other Comprehensive Income			Accumulated Deficit			Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2006	13,409,542	$	13	$	453,823	$	467		$	(442,560	)	$	11,743
Net loss	—		—		—		—			(17,577	)		(17,577	)
Unrealized loss on available-for-sale securities	—		—		—		(1	)		—			(1	)
Translation adjustment	—		—		—		190			—			190
Comprehensive loss	—		—		—		—			—			(17,388	)
Share-based compensation	—		—		1,169		—			—			1,169
Exercise of stock options	13,434		—		45		—			—			45
Purchases under Employee Stock Purchase Plan	16,773		—		26		—			—			26
Issuance of common stock, net of issuance costs	19,999,885		20		29,835		—			—			29,855
Balance at December 31, 2006	33,439,634	$	33	$	484,898	$	656		$	(460,137	)	$	25,450
Net loss	—		—		—		—			(21,983	)		(21,983	)
Unrealized loss on available-for-sale securities	—		—		—		(804	)		—			(804	)
Translation adjustment	—		—		—		467			—			467
Comprehensive loss	—		—		—		—			—			(22,320	)
Share-based compensation	—		—		3,058		—			—			3,058
Exercise of stock options	165,536		—		446		—			—			446
Exercise of warrants	1,197,012		1		1,255		—			—			1,256
Purchases under Employee Stock Purchase Plan	36,473		—		102		—			—			102
Issuance of common stock, net of issuance costs	10,050,001		10		46,263		—			—			46,273
Balance at December 31, 2007	44,888,656	$	44	$	536,022	$	319		$	(482,120	)	$	54,265
Net loss	—		—		—		—			(44,154	)		(44,154	)
Unrealized gain on available-for-sale securities	—		—		—		898			—			898
Translation adjustment	—		—		—		111			—			111
Comprehensive loss	—		—		—		—			—			(43,145	)
Share-based compensation	—		—		7,276		—			—			7,276
Exercise of stock options and restricted stock	340,936		1		1,718		—			—			1,719
Exercise of warrants	9,093,302		9		139		—			—			148
Purchases under Employee Stock Purchase Plan	107,781		—		568		—			—			568
Issuance of common stock, net of issuance costs	6,512,794		7		95,375		—			—			95,382
Balance at December 31, 2008	60,943,469	$	61	$	641,098	$	1,328		$	(526,274	)	$	116,213

F-5

SEQUENOM, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Year ended December 31,
	2008			2007			2006
Operating activities
Net loss	$	(44,154	)	$	(21,983	)	$	(17,577	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		7,276			3,058			1,169
Depreciation and amortization		2,893			1,940			3,569
Loss on marketable securities		2,584			1,071			—
Loss on disposal of fixed assets		232			—			65
Bad debt expense		400			142			103
Restricted stock		161			—			—
Deferred taxes		—			—			(697	)
Deferred rent		(442	)		1,631			2,356
Other non-cash items		41			462			650
Changes in operating assets and liabilities:
Accounts receivable		(115	)		(6,044	)		(2,505	)
Inventories		(6,492	)		(1,565	)		1,710
Other current assets and prepaid expenses		(212	)		(396	)		83
Other assets		(56	)		(107	)		8
Accounts payable and accrued expenses		2,471			4,975			412
Deferred revenue		686			(554	)		202
Other liabilities		111			(52	)		(283	)
Net cash used in operating activities		(34,616	)		(17,422	)		(10,735	)
Investing activities
Purchase of equipment, leasehold improvements, and intangible assets		(4,878	)		(3,513	)		(1,229	)
Restricted cash		(41	)		75			1,243
Cash paid for acquisition		(400	)		—			—
Purchases of marketable securities		(44,483	)		(70,781	)		(32,160	)
Sales of marketable securities		24,012			(47,648	)		10,646
Maturities of marketable securities		21,683			5,621			2,676
Net cash used in investing activities		(4,107	)		(20,950	)		(18,824	)
Financing activities
Repayment of long-term debt		(637	)		(70	)		(200	)
Proceeds from long-term debt		610			1,318			—
Payments on capital lease obligations		—			—			(193	)
Proceeds from issuance of common stock, net of issuance costs		91,782			46,273			29,855
Proceeds from exercise of warrants, stock options and ESPP purchases		2,011			1,803			71
Net cash provided by financing activities		93,766			49,324			29,533
Net increase (decrease) in cash and cash equivalents		55,043			10,952			(26	)
Effect of exchange rate changes on cash and cash equivalents		179			232			73
Cash and cash equivalents at beginning of year		13,116			1,932			1,885
Cash and cash equivalents at end of year	$	68,338		$	13,116		$	1,932
Supplemental disclosure of cash flow information:
Interest paid	$	134		$	12		$	20
Supplemental disclosure of non cash investing activities:
Common stock issued for acquisition	$	3,600		$	—		$	—

See accompanying notes.

F-6

SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008

1. Nature of the Business

We are a diagnostic testing and genetics analysis company committed to providing products, services, diagnostic testing, applications and genetic analysis products that translate the results of genomic science into solutions for biomedical research, translational research, molecular medicine applications, and agricultural, livestock, and other areas of research. Our development and commercialization efforts in various diagnostic areas include non-invasive prenatal diagnostics, oncology, infectious diseases, and other disorders. Our proprietary MassARRAY system is a high performance DNA analysis platform that quantitatively and precisely measures the amount of genetic target material and variations therein. The system is able to deliver reliable and specific data from complex biological samples and from genetic target material that is available only in trace amounts. We have used our MassARRAY technology and our extensive collections of DNA samples from diseased and healthy individuals to identify disease-related genes that predispose significant portions of the population to major diseases. Based on our discoveries, we have developed diagnostic and therapeutic content for potential partner out-licensing and commercial development opportunities. We are researching, developing and pursuing the commercializion of various non-invasive molecular diagnostic tests for prenatal genetic disorders and diseases, oncology, infectious diseases, and other diseases and disorders.

2. Summary of Significant Accounting Policies and Significant Accounts

Reverse Stock Split

On May 31, 2006, in conjunction with our annual meeting of stockholders, our stockholders approved amendments to our certificate of incorporation to effect a reverse stock split of our common stock and to increase the number of authorized shares of common stock to 185,000,000. On June 1, 2006, we completed a 1-for-3 reverse stock split of our common stock. Accordingly, all share, warrant, option and per share information for all periods presented has been restated to account for the effect of the reverse stock split.

Basis of Presentation and Consolidation

The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) and include the accounts of Sequenom, Inc. and our wholly-owned subsidiaries located in the United States, Germany, the United Kingdom, Japan, Hong Kong and India. All significant intercompany accounts and transactions are eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Accrued Acquisition and Integration Costs

To the extent that exact amounts were not determinable at the time of acquisition, we estimated amounts for direct costs of the acquisition of Gemini Genomics and Axiom Biotechnologies and the related integration costs in accordance with Emerging Issues Task Force No 95-3, “Recognition of Liabilities in Connection with a Purchase Business Combination” (EITF 95-3). Amounts accrued relating to acquisition and integration costs totaled $27.4 million and as of December 31, 2008, approximately $0.5 million remained accrued. The amount accrued at December 31, 2008, represents all remaining lease payments, net of estimated income from subleased space. If we do not receive all the amounts due to us under non-cancelable subleases, we will incur additional expense.

F-7

SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

Goodwill and Purchased Intangible Assets

Goodwill is recorded when the consideration paid for an acquisition exceeds the fair value of the identified net tangible and intangible assets acquired. Other purchased intangible assets, including such items as lab accreditations, patent rights and licenses, are amortized on a straight-line basis over the estimated remaining useful lives of the respective assets, all of which have an estimated useful lives of five years.

In accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations,” (SFAS 141) and SFAS No. 142, “Goodwill and Other Intangible Assets” (SFAS 142), we annually evaluate our goodwill and purchased intangibles at the reporting unit level during the fourth quarter each fiscal year or more frequently if we believe indicators of impairment are present. SFAS 142 requires that goodwill and certain intangible assets be assessed for impairment using fair value measurement techniques. Specifically, goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. Goodwill is allocated to reporting units based upon the type of products under development by the acquired company, which initially generated the goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss. The second step of the goodwill impairment test compares the implied fair value of the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. The fair value is determined using a combination of the discounted cash flow analysis as well as market comparisons. The determination of fair values requires significant judgment and estimates. Due to the close of the acquisition of CMM during the fourth quarter of 2008, a separate evaluation for annual impairment was not performed.

We periodically re-evaluate the original assumptions and rationale utilized in the establishment of the carrying value and estimated lives of our long-lived assets in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” The criteria used for these evaluations include management’s estimate of the asset’s continuing ability to generate income from operations and positive cash flows in future periods as well as the strategic significance of any intangible assets in our business objectives. If assets are considered to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value of the assets.

Reserves for Obsolete and Slow-moving Inventory

We operate in an industry characterized by rapid improvements and changes to our technology and products. The introduction of new products by us or our competitors can result in our inventory being rendered obsolete or requiring us to sell items at a discount. We estimate the recoverability of our inventory by reference to our internal estimates of future demands and product life cycles. If we incorrectly forecast demand for our products or inadequately manage the introduction of new product lines, we could materially impact our consolidated financial statements by having excess inventory on hand. Our future estimates are subjective and could be incorrect. During 2008, slow-moving and obsolete inventory reserves of $0.7 million were charged against cost of goods sold and the total reserve was $1.8 million at December 31, 2008.

F-8

SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

Shipping and Handling Costs

Shipping and handling costs are included within cost of product revenue on the statement of operations.

Cash and Cash Equivalents

Cash equivalents consist of short-term, highly liquid investments with maturities at date of purchase of three months or less.

Marketable Securities

We account for marketable securities in accordance with SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.” We determined the appropriate classification of marketable securities was “available-for-sale” at the time of purchase. As such, at December 31, 2008 and 2007, all of our investments in marketable securities were reported at fair value. Fair value is determined based on observable market quotes or valuation models using assessments of counterparty credit worthiness, credit default risk or underlying security and overall capital market liquidity. Declines in fair value that are considered other-than-temporary are charged to earnings and those that are considered temporary are reported as a component of accumulated other comprehensive income (OCI) in stockholders’ equity. We use the specific identification method of determining the cost basis in computing realized gains and losses on the sale of its available-for-sale securities.

Historically we have invested in auction rate securities, commercial paper of prime quality, certificates of deposit, guaranteed bankers acceptance and U.S. Government instruments, and by policy, limit the amount of credit exposure to any one issuer. At December 31, 2008 and 2007, approximately $9.4 million and $20.9 million, respectively, of principal were invested in auction rate securities (ARS). The ARS held are private placement securities with various long-term nominal maturities with interest rates reset through a dutch auction each month, except for one ARS that resets every 92 days. The monthly auctions historically have provided a liquid market for these securities. The investments in ARS represent interests in collateralized debt obligations supported by insurance securitizations and other structured credits, including corporate bonds and to a lesser degree, pools of residential and commercial mortgages.

Consistent with our investment policy guidelines, the ARS investments held by us all had AAA/AA credit ratings at the time of purchase. With the liquidity issues experienced in global credit and capital markets, the $9.4 million principal value of ARS held by us at December 31, 2008 have experienced multiple failed auctions as the amount of securities submitted for sale has exceeded the amount of purchase orders and we have been unable to liquidate.

Restricted Cash

Restricted cash and investments of $1.4 million as of December 31, 2008 are held in interest bearing cash accounts with restrictions of withdrawal, in support of certain borrowing agreements and stand-by letters of credit. Restricted cash totaled $1.3 million at December 31, 2007.

Concentration of Risks

We grant credit generally on an unsecured basis to customers throughout North America, Europe, and Asia. We establish an allowance for doubtful accounts based upon factors surrounding the credit risk of specific

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December 31, 2008

customers, historical trends, and other information. To reduce credit risk, certain sales are secured by letters of credit from commercial banks. The regional concentration of accounts receivables were as follows:

Region	December 31, 2008		Percent of receivable balance		December 31, 2007		Percent of receivable balance
	(In thousands)
Europe	$	3,624	34	%	$	2,748	25	%
Asia		3,467	33	%		2,063	19	%
North America		3,551	33	%		6,146	56	%
Total	$	10,642	100	%	$	10,957	100	%

Our Asia-based major distributors represented $10.1 million and $7.9 million, or 24% and 22%, of our total product revenues during the year ended December 31, 2008 and 2007, respectively. At December 31, 2008, no customer had a year end accounts receivable balance greater than 10% of the total balance outstanding and no customer represented more than 10% of total world-wide revenue for the year ended December 31, 2008.

Our products incorporate components that are available from only one or a limited number of suppliers. Many of these components are manufactured with lead times, which can be significant. Shortages of various essential materials could occur due to interruption of supply. If we were unable to procure certain such components from suppliers or sub-contractors, it could affect our ability to meet demand for our products, which would have an adverse effect upon our results.

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market value. The components of inventories were as follows:

	December 31,
	2008		2007
	(In thousands)
Raw materials	$	7,560	$	3,053
Work in process		282		—
Finished goods		2,789		1,138
Total	$	10,631	$	4,191

Inventories are shown net of excess and obsolescence reserves of $1.8 million and $1.1 million at December 31, 2008 and 2007, respectively.

Equipment and Leasehold Improvements

Equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets (generally 3 to 5 years, or the lease term, whichever is shorter). Leasehold improvements are amortized using the straight-line method over the estimated useful life of the improvement or the remaining term of the lease, whichever is shorter. The maximum estimated useful life of any leasehold improvement is 15 years from the completion of the improvement. Maintenance and repairs are charged to operations as incurred. When assets are sold, or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operating expense.

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December 31, 2008

Equipment and leasehold improvements and related accumulated depreciation and amortization were as follows:

	December 31,
	2008			2007
	(In thousands)
Laboratory equipment	$	18,793		$	14,545
Leasehold improvements		4,537			4,470
Office furniture and equipment		7,670			6,261
		31,000			25,276
Less accumulated depreciation and amortization		(21,805	)		(19,317	)
	$	9,195		$	5,959

Depreciation expense for the years ended December 31, 2008, 2007 and 2006 was $2.8 million, $1.7 million, and $1.6 million, respectively.

Intangible Assets

Intangible assets consisted of the following:

	Weighted Average Life	December 31, 2008					December 31, 2007
		Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
		(In thousands)
Clinical data collections	5	$	13,552	$	(13,552	)	$	13,552	$	(13,552	)
Purchased patent rights and licenses	5		4,449		(4,449	)		4,449		(4,370	)
Lab accreditation	5		117		(3	)		—		—
Total		$	18,118	$	(18,004	)	$	18,001	$	(17,922	)

Intangible assets are amortized using the straight-line method over their estimated useful lives. Amortization of intangible assets for the years ended December 31, 2008, 2007 and 2006 was $0.1 million, $0.3 million, and $2.0 million, respectively.

Warranty Cost and Reserves

In accordance with Financial Accounting Standards Board (FASB) Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” we provide a warranty provision related to the sales of our MassARRAY equipment based on our experience of returns and repairs required under the warranty period.

We generally provide a one-year warranty on our MassARRAY Compact system and related equipment. We establish an accrual for estimated warranty expenses associated with system sales based on historical amounts. This expense is recorded as a component of cost of product revenue.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

Changes in our warranty liability during the three years ended December 31, 2008 are as follows (in thousands):

Balance as of December 31, 2005	$	405
Additions charged to cost of revenues		939
Repairs and replacements		(664	)
Balance as of December 31, 2006	$	680
Additions charged to cost of revenues		314
Repairs and replacements		(468	)
Balance as of December 31, 2007	$	526
Additions charged to cost of revenues		385
Repairs and replacements		(305	)
Balance as of December 31, 2008	$	606

Fair Value of Financial Instruments

Financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, are carried at cost, which management believes approximates fair value because of the short-term maturity of these instruments. The fair value of our asset-backed loan approximated their carrying value because the terms are equivalent to borrowing rates currently available to us for debt with similar terms and maturities.

Accounts Receivable

Trade accounts receivable are recorded at net invoice values. We consider receivables past due based on the contractual payment terms. We review our exposure to amounts receivable and reserves specific amounts if collectibility is no longer reasonably assured. We also reserve a percentage of our trade receivable balance based on collection history. We re-evaluate such reserves on a regular basis and adjust our reserves as needed. Amounts determined to be uncollectible are charged or written off against the reserve.

Revenue Recognition

We recognize revenue in accordance with current accounting rules, which primarily include the Securities and Exchange Commission’s Staff Accounting Bulletin No. 104, “Revenue Recognition” (SAB 104). In accordance with SAB 104, revenues are recognized, when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed and determinable and collectibility is reasonably assured. We consider EITF No. 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables,” and for MassARRAY system sales, the arrangement consideration is allocated among the separate units of accounting based on their relative fair values. The separate units of accounting are typically the system and software itself and maintenance contracts sold at the time of the system sale. Revenue is deferred for fees received before earned. Revenues from sales of consumables are recognized generally upon shipment and transfer of title to the customer. Revenue from sales of MassARRAY systems with standard payment terms of net 30 to 60 days are recognized upon shipment and transfer of title to the customer or when all revenue recognition criteria are met. Our contracts do not contain refund or cancellation clauses. Revenues from the sale or licensing of our proprietary software are recognized upon transfer of title to the customer. We recognize revenue on maintenance services for ongoing customer support over the maintenance period. Revenues from genetic services

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December 31, 2008

are recognized at the completion of key stages in the performance of the service, which is generally delivery of single nucleotide polymorphism (SNP) assay information. Grant revenue is recorded as the research expenses relating to the grants are incurred, provided that the amounts received are not refundable if the research is not successful. Amounts received that are refundable if the research is not successful would be recorded as deferred revenue and recognized as revenue upon the grantor’s acceptance of the success of the research results.

Research and Development Costs

Research and development costs are expensed as incurred. These costs include personnel expenses, fees paid to collaborators, laboratory supplies, facilities, miscellaneous expenses and allocation of corporate costs. These expenses are incurred during proprietary research and development activities, as well as providing services under collaborative research agreements and grants.

Foreign Currency Translation and Transactions

The financial statements of the our German, United Kingdom, Japan, Hong Kong and Indian subsidiaries are measured using, respectively, the Euro (“EUR”), Great British pound (“GBP”), the Japanese Yen (“JPY”), the Hong Kong Dollar (“HKD”) and Rupee (“INR”), as the functional currency. Assets and liabilities of these subsidiaries are translated at the rates of exchange at the balance sheet date. Income and expense items are translated at the average daily rate of exchange during the reporting period. Resulting remeasurement gains or losses are recognized as a component of other comprehensive income. Transactions denominated in currencies other than the local currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in transaction gains and losses, which are reflected in income as unrealized (based on period-end translations) or realized upon settlement of the transaction. Transaction gains or losses were not material for the years ended December 31, 2008, 2007, and 2006.

Income Taxes

In accordance with SFAS No. 109 “Accounting for Income Taxes,” (SFAS 109) the provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for the expected future tax benefit to be derived from tax loss and credit carryforwards. Deferred tax assets and liabilities are determined using the enacted tax rates in effect for the years in which those tax assets are expected to be realized. A valuation allowance is established when it is more likely than not the future realization of all or some of the deferred tax assets will not be achieved. The evaluation of the need for a valuation allowance is performed on a jurisdiction by jurisdiction basis, and includes a review of all available positive and negative evidence. As of December 31, 2008, we have maintained a valuation allowance against U.S. and foreign deferred tax assets that we concluded have not met the “more likely than not” threshold required under SFAS 109.

Due to the adoption of SFAS No. 123(R) “Share-Based Payment” (SFAS 123(R)), we recognize excess tax benefits associated with share-based compensation to stockholders’ equity only when realized. When assessing whether excess tax benefits relating to share-based compensation have been realized, we follow the with-and-without approach, excluding any indirect effects of the excess tax deductions. Under this approach, excess tax benefits related to share-based compensation are not deemed to be realized until after the utilization of all other tax benefits available to us.

Effective January 1, 2007, we adopted FIN No. 48 “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109,” (FIN No. 48), which clarifies the accounting for uncertainty in tax positions. FIN 48 requires that we recognize the impact of a tax position in our financial statements only if that

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. Any interest and penalties related to uncertain tax positions will be reflected in income tax expense.

Stock-based Compensation

Effective January 1, 2006, we adopted the provisions of SFAS 123(R). Under this method, share based compensation cost is measured at grant date based on the estimated fair value of the award and is recognized as expense over the requisite service period for all share based awards granted, modified or cancelled after January 1, 2006. Our net loss for the years ended December 31, 2008, 2007 and 2006, includes the following compensation expense related to our share based compensation awards:

	(In thousands)
	2008		2007		2006
Research and development expense	$	1,306	$	521	$	251
Selling and marketing expense		1,430		601		168
General and administrative expense		3,396		1,936		750
	$	6,132	$	3,058	$	1,169

SFAS 123(R) requires that cash flows resulting from tax deductions in excess of the cumulative compensation cost recognized for options exercised (excess tax benefits) be classified as cash inflows from financing activities and cash outflows from operating activities. Due to our net loss position, no tax benefits have been recognized in the consolidated statements of cash flows.

We have not recognized, and do not expect to recognize in the near future, any tax benefit related to stock-based compensation cost as a result of the full valuation allowance of our net deferred tax assets and our net operating loss carryforwards.

We account for options granted to non-employees in accordance with EITF No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services,” and SFAS No. 123(R). The fair value of these options at the measurement dates was estimated using the Black-Scholes pricing model. Total stock-based compensation for options granted to non-employees for the year ended December 31, 2008, 2007, and 2006, was $731,000, $128,000 and $0, respectively. Stock-based compensation for options granted to non-employees is included in general and administrative, research and development and selling and marketing expenses in the statement of operations for 2008 and 2007 totaling $0, $181,000 and $550,000, and $39,000, $24,000 and $65,000, respectively.

Comprehensive Income (Loss)

In accordance with SFAS No. 130, “Reporting Comprehensive Income,” unrealized gains or losses on our available-for-sale securities and foreign currency translation adjustments are included in other comprehensive income (loss).

Net Loss Per Share

In accordance with SFAS No. 128, “Earnings Per Share,” basic net loss per share is computed by dividing the net loss for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss for the period by the weighted average number of common and common equivalent shares outstanding during the period. Common stock equivalents consisting of stock options, warrants and restricted stock were not included in the computation of diluted net loss per share as their effect was anti-dilutive for all periods presented.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

Recent Accounting Pronouncements

In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (SFAS 162). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements that are presented in conformity with generally accepted accounting principles in the United States. SFAS 162 was effective November 15, 2008 and the adoption of this pronouncement did not have a material impact on our consolidated financial statements.

In April 2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of Intangible Assets” (FSP 142-3). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS 142. This change is intended to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141R and U.S. GAAP. FSP 142-3 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The requirements for determining useful lives must be applied prospectively to intangible assets acquired after the effective date and the disclosure requirements must be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date. FSP 142-3 could have a material impact on the useful life determination of any intangible asset acquisitions completed in future periods.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (SFAS 161). This statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. This statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The adoption of SFAS 161 is not expected to have a material impact on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of Accounting Research Bulletin No. 51” (SFAS 160). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 is effective for fiscal years beginning after December 15, 2008. We do not expect the adoption of SFAS 160 to have a material effect on our consolidated results of operations and financial condition.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (SFAS 157). This statement establishes a common definition for fair value to be applied to GAAP requiring use of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. SFAS 157 is effective for financial assets and financial liabilities for fiscal years beginning after November 15, 2007. Issued in February 2008, FSP 157-1 “Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13,” removed leasing transactions accounted for under SFAS

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

No. 13 and related guidance from the scope of SFAS 157. FSP 157-2 “Partial Deferral of the Effective Date of Statement 157” (FSP 157-2), deferred the effective date of SFAS 157 for all nonfinancial assets and nonfinancial liabilities to fiscal years beginning after November 15, 2008. The implementation of SFAS 157 for financial assets and financial liabilities, effective January 1, 2008, did not have a material impact on our consolidated financial statements. See Note 3, “Marketable Securities and Fair Value Measurements” for further discussion on our financial assets.

SFAS No. 141(R), “Business Combinations” (SFAS 141(R)), was issued in December 2007. SFAS 141(R) established principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree. SFAS 141(R) also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141(R) will become effective for fiscal years beginning after December 15, 2008. The impact of adopting SFAS 141(R) on our consolidated financial statements will depend on the economic terms of any future business combination transactions.

On January 1, 2008, we adopted the provision SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS 159). SFAS 159 allows certain financial assets and liabilities to be recognized, at our election, at fair market value, with any gains or losses for the period recorded in the statement of income. SFAS 159 includes available-for-sales securities in the assets eligible for this treatment. Currently, we record the gains or losses for the period in comprehensive income and in the equity section of the balance sheet. At this time, we have not elected to account for any available-for-sale securities using the provisions of SFAS 159.

On January 1, 2008 we adopted EITF Issue No. 07-1, “Accounting for collaborative Arrangements Related to the Development and Commercialization of Intellectual Property” (EITF 07-1). Companies may enter into arrangements with other companies to jointly develop, manufacture, distribute, and market a product. Often the activities associated with these arrangements are conducted by the collaborators without the creation of a separate legal entity (that is, the arrangement is operated as a “virtual joint venture”). The arrangements generally provide that the collaborators will share, based on contractually defined calculations, the profits or losses from the associated activities. Periodically, the collaborators share financial information related to product revenues generated (if any) and costs incurred that may trigger a sharing payment for the combined profits or losses. The consensus requires collaborators in such an arrangement to present the result of activities for which they act as the principal on a gross basis and report any payments received from (made to) other collaborators based on other applicable GAAP or, in the absence of other applicable GAAP, based on analogy to authoritative accounting literature or a reasonable, rational, and consistently applied accounting policy election. Since our collaborative arrangements do not incorporate such revenue- and cost-sharing arrangements, the adoption of EITF 07-1 did not have an impact on our financial statements.

In June 2007, the FASB ratified EITF No. 07-3, “Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities” (EITF 07-3). EITF 07-3 requires that nonrefundable advance payments for goods and services that will be used or rendered in future research and development activities pursuant to executory contractual arrangements be deferred and recognized as an expense in the period that the related goods are delivered or services are performed. We adopted EITF 07-3 as of January 1, 2008, and its adoption did not have a material impact on our consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

3. Acquisition

On November 14, 2008, we completed our asset acquisition of the Center for Molecular Medicine, LLC (CMM). The assets are now part of our wholly owned subsidiary, the Sequenom Center for Molecular Medicine (SCMM). Under the terms of the Agreement, we paid to CMM $4.0 million for certain assets related to CMM’s business in advanced molecular pathology laboratory services relating to diagnostics, translational research and clinical trials, less all cash and cash equivalents. Ninety percent of the purchase price comprised of 187,794 shares of our common stock (valued at $3.6 million) and the remainder of the purchase price of $0.4 million paid in cash, which was deposited into an escrow account. The escrow account will remain in place for 18 months following the closing of the transaction to satisfy potential indemnification claims. The acquisition of CMM provides us with a laboratory that has the required accreditations and certifications already in place to process our screening tests, which we anticipate commercializing during 2009. These factors have contributed to the purchase price for the acquisition of CMM, which resulted in the preliminary recognition of goodwill of approximately $2.4 million.

In connection with this transaction we have commenced a valuation study of the intangible assets acquired in order to allocate the purchase price in accordance with SFAS 141. In accordance with SFAS 141, we have preliminarily allocated the excess purchase price over the fair value of net tangible assets and identifiable intangible assets acquired to goodwill. We believe the preliminary fair values assigned to the CMM assets acquired were based on reasonable assumptions. The purchase price has been initially allocated as follows (in thousands):

Net tangible assets	$	1,485
Identifiable intangible asset		117
Goodwill		2,398
Total consideration	$	4,000

We anticipate that the final fair value allocation of the purchase price will be completed during the first quarter of 2009. No supplemental pro forma information is presented for the acquisition due to the immaterial effect of the acquisition on our results of operations.

4. Marketable Securities and Fair Value Measurements

Marketable securities

The estimated market value of all ARS holdings at December 31, 2008 and 2007 was $5.7 million and $19.0 million, respectively. At December 31, 2008, the market value reflects an aggregate $3.7 million impairment adjustment to the principal value of $9.4 million and at December 31, 2007 reflects an aggregate $1.9 million impairment adjustment to the principal value of $20.9 million. Although the ARS continue to pay interest according to their stated terms, based on valuation models and an analysis of other-than-temporary impairment factors, we recognized a loss of approximately $2.6 million and $1.1 million for the years ending December 31, 2008 and 2007, respectively, reflecting the portion of ARS holdings that we have concluded have an other-than-temporary decline in value. Approximately $1.0 million of the recorded loss for the year ended December 31, 2008, represented the reclassification of previously recorded unrealized losses in other comprehensive income and that we have now concluded have an other-than-temporary decline in value. At December 31, 2007, we had recorded an unrealized loss of approximately $0.8 million in accumulated other comprehensive income as a reduction in stockholders’ equity, reflecting adjustments to ARS holdings that we had concluded have a

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

temporary decline in value. During 2008, the adjustments previously recorded to other comprehensive income at December 31, 2007, have been recognized as an other-than-temporary decline in value and are included within the $2.6 million of loss on marketable securities for the year ended December 31, 2008. During 2008, we reclassified our remaining ARS investments to non-current marketable securities available for sale as we do not have a need to access these fund for operational purposes.

In April 2008 we revised our investment policy to maintain our portfolio of cash equivalents and marketable securities in a variety of securities, including U.S. Government securities with ratings of AAA, and repurchase agreements collateralized by U.S. Government securities with ratings of AAA at the time of acquisition. Our investment policy includes a minimum quality rating for all new investments, as well as limits the amount of credit exposure to only issuances from the U.S. Government. If an investment we hold falls below this level, we research the reasons for the fall and determine if we should continue to hold the investment in order to minimize our exposure to market risk of the investment.

Fair Value Measurements

SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. SFAS 157 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1—Quoted prices in active markets for identical assets or liabilities. We have determined that our investments in money market accounts, certificates of deposit and U.S. Government securities meet the criteria for definition within the Level 1 hierarchy.

Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs include quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. We have determined that our investments in commercial paper meet the criteria for definition within the Level 2 hierarchy.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We have determined that our investments in ARS meet the criteria for definition within Level 3 hierarchy.

The fair values of our investments in ARS instruments are estimated utilizing a discounted cash flow analysis valuation model as of December 31, 2008. This analysis considers, among other items, the collateral underlying the security investments, the credit quality of the counterparty, the timing of expected future cash flows, the default risk underlying the security, discount rates, the expected time until a successful auction and the overall capital market liquidity. These securities were also compared, when possible, to other observable market data with similar characteristics to the securities. Management has also reviewed the valuation input criteria, which generally consists of the price of credit protection, information available on the trading of senior and subordinated securities and other debt in the market place for comparable types of maturities, the current credit rating of the trust sponsor and/or bond insurer, as well as the ultimate maturity and the underlying collateral of the securities and have deemed them to be reasonable assumptions in determining fair value. The valuation of our ARS investments is subject to uncertainties that are difficult to predict. Factors that may impact our valuation include changes to credit ratings of the securities, as well as to the underlying assets supporting those securities,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

rates of credit default of the underlying assets, underlying collateral value, discount rates, counterparty risk and the ongoing strength and quality of market credit and liquidity.

Based on the underlying assumptions utilized in our valuation of ARS and that our holdings of ARS are not required for operational purposes in 2009, we have classified these investments as long-term on the consolidated balance sheet at December 31, 2008 and valuation adjustments determined to be other-than-temporary are recorded to the statement of operations, as appropriate.

We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. All of the available for sale securities have a contractual maturity at December 31, 2008 of one year or less. The following table sets forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2008:

Description	Total		Level 1		Level 2		Level 3
	(in thousands)
Cash and cash equivalents	$	68,338	$	68,338	$	—	$	—
Restricted cash		1,371		1,371		—		—
Marketable securities, current1		29,991		29,991		—		—
Marketable securities, non-current1		5,748		—		239		5,509
Total	$	105,448	$	99,700	$	239	$	5,509

¹ Gains or losses considered to be temporary are recorded to other comprehensive income (loss) at each measurement date. Other than temporary losses are recorded to operations at each measurement date.

The following table presents our assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as defined in SFAS 157 at December 31, 2008:

	Level 3 Auction Rate Securities
	(in thousands)
Balance at December 31, 2007	$	19,018
Transfers from Level 3		(239	)
Total gains or (losses):
Included in operations		(2,323	)
Recognized loss previously included in other comprehensive income (loss)		762
Included in other comprehensive income (loss)		—
Purchases and settlements, net		(11,709	)
Balance at December 31, 2008	$	5,509
Losses included in operations (or changes in net assets) for the period relating to assets still held at December 31, 2008
Total losses for the year ended December 31, 2008, included in operations	$	(2,584	)
Total change in unrealized losses included in other comprehensive income (loss)	$	824

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

At December 31, 2007, short-term investments, including restricted investments, consisted of the following:

	Amortized Cost		Unrealized Gain		Unrealized (Loss)			Market Value
	(In thousands)
Short-term—auction rate securities	$	18,913	$	—	$	(824	)	$	18,089
Cash equivalents		9,037		—		(11	)		9,026
Corporate bonds		7,481		—		(4	)		7,477
Corporate notes		2,066		27		—			2,092
United States government agencies		1,011		8		—			1,020
Total short-term marketable securities	$	38,508	$	35	$	(839	)	$	37,704

5. Segment Reporting

SFAS No. 131, “Disclosures About Segments of an Enterprise and Related Information,” requires the use of a management approach in identifying segments of an enterprise. All of our activities are now operated within one business segment and financial results are prepared and reviewed by management as a single operating segment. Accordingly we report the consolidated results of our activities without segmental disclosure. We periodically evaluate the benefit of operating in distinct segments and will report accordingly when such distinction is made.

6. Acquisition and Integration Costs

As of December 31, 2008, we had $0.5 million remaining in accrued acquisition costs, relating to the acquisition of Gemini Genomics in 2001, comprising facility exit costs. We have subleased all of our surplus space within this facility and received sub-lease income, which we set against lease expense, of $0.3 million, $0.3 million, and $0.2 million for the years ended December 31, 2008, 2007 and 2006, respectively. If we do not receive all the amounts due to us under non-cancelable subleases, we will incur additional lease expense.

The activity in the years ended December 31, 2008 and 2007, respectively, was as follows (in millions):

	Balance at December 31, 2007		Increase in accrual		Deductions			Balance at December 31, 2008
Costs to close facilities and exit lease commitments	$	0.7	$	—	$	(0.2	)	$	0.5
	Balance at December 31, 2006		Increase in accrual		Deductions			Balance at December 31, 2007
Costs to close facilities and exit lease commitments	$	1.0	$	—	$	(0.3	)	$	0.7

7. Asset-backed Loan

On August 31, 2007, we signed an amendment to our existing asset-backed loan line that had previously expired. Under the terms of this amendment, we may elect to have individual minimum fundings of $100,000 up to an aggregate limit of $3.0 million through December 23, 2008. All borrowings are secured by the underlying financed equipment.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

As of December 31, 2008, we had an aggregate $1.2 million outstanding on this asset-backed loan line relating to four fundings with interest rates from 10.6% to 9.73% to be repaid in 36 monthly installments. Our right to borrow funds under this facility expired in December 2008.

8. Commitments and Contingencies

Building Leases

We lease facilities in the United States, Germany, China, United Kingdom, India and Japan. In total, we lease space in nine buildings under leases that expire at various dates through September 2015. Total rent expense under these leases was approximately $5.0 million in 2008, 2007 and 2006, respectively.

In September 2005, we entered into an amendment to our lease for our corporate headquarters in San Diego. The lease amendment provides for the deferral of approximately $3.2 million of the monthly rent payments by reducing the monthly payments during the period commencing October 1, 2005 and ending September 30, 2007 and increasing the aggregate monthly payments by the deferred amount for the remaining term of the lease, from October 1, 2007 to September 30, 2015. The total obligation under the lease remains unchanged. Rent expense is calculated on a straight-line basis. In connection with the lease amendment, we issued our landlord a warrant to purchase 50,000 shares of our common stock with an exercise price of $2.64 per share. The warrants are exercisable and have a ten year term. The fair value of the warrants, calculated using the Black-Scholes model, was recorded as prepaid rent and is being amortized as rent expense over the remaining life of the lease.

The following is a schedule of future minimum lease payments at December 31, 2008:

Year Ending December 31,	Operating Leases
	(In thousands)
2009	$	6,791
2010		6,438
2011		5,400
2012		5,171
2013		4,309
Thereafter		7,885
	$	35,994

The above operating leases expire at various dates through 2015. Certain leases contain extension, return, or renewal provisions for two years at existing lease rates and/or purchase options. Future operating lease commitments for leases have not been reduced by future minimum sublease rentals aggregating $0.5 million.

Letters of Credit

At December 31, 2008, we had outstanding stand-by letters of credit with financial institutions totaling $1.1 million related to our building and operating leases, which will remain in place until the expiration of the Newton, Massachusetts building lease agreement in December 2010.

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SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

Collaboration, Development, and Licensing Agreements

In October 2005, we acquired exclusive rights in certain countries, including the United States, United Kingdom and other countries in Europe and elsewhere, to non-invasive prenatal diagnostic intellectual property from Isis Innovation Ltd. (ISIS), the technology transfer company of the University of Oxford. The intellectual property covers non-invasive prenatal genetic diagnostic testing on fetal nucleic acids derived from plasma or serum on any platform including mass spectrometry and real time polymerase chain reaction amplification platforms. In October 2006 and November 2007 we entered into additional related agreements with other entities, as well as amendments to the ISIS agreement that expanded the licensed applications and territory. Under the terms of this agreement and its amendments, we have paid up-front fees totaling $0.8 million and are required to pay up to approximately $0.5 million in aggregate milestone payments upon the achievement of initial sales or tests performed of various products or the issuance of a patent, as well as royalties on product sales.

We have entered into various license agreements since 1996 allowing us to utilize certain patents rights. If these patents are used in connection with a commercial product sale, we will pay royalties based on a percentage of the related product revenues. During the years ended December 31, 2008, 2007, and 2006, the amount of royalties incurred in connection primarily with product sales was $0.1 million, $0.1 million, and $0.1 million, respectively.

Litigation

In November 2001, we and certain of our current or former officers and directors were named as defendants in a class action shareholder complaint filed by Collegeware USA in the U.S. District Court for the Southern District of New York (now captioned In re Sequenom, Inc. IPO Securities Litigation) Case No. 01-CV-10831. Similar complaints were filed in the same District Court against hundreds of other public companies that conducted initial public offerings of their common stock in the late 1990s and 2000. In the complaint, the plaintiffs allege that our underwriters, certain of our officers and directors and we violated the federal securities laws because our registration statement and prospectus contained untrue statements of material fact or omitted material facts regarding the compensation to be received by and the stock allocation practices of the underwriters. The plaintiffs seek unspecified monetary damages and other relief. In October 2002, our officers and directors were dismissed without prejudice pursuant to a stipulated dismissal and tolling agreement with the plaintiffs. In February 2003, the District Court dismissed the claim against us brought under Section 10(b) of the Securities Exchange Act of 1934, without giving the plaintiffs leave to amend the complaint with respect to that claim. The District Court declined to dismiss the claim against us brought under Section 11 of the Securities Act of 1933.

In September 2003, pursuant to the authorization of a special litigation committee of our board of directors, we approved in principle a settlement offer by the plaintiffs. In September 2004, we entered into a settlement agreement with the plaintiffs. In February 2005, the District Court issued a decision certifying a class action for settlement purposes and granting preliminary approval of the settlement subject to modification of certain bar orders contemplated by the settlement. In August 2005, the District Court reaffirmed class certification and preliminary approval of the modified settlement. In February 2006, the District Court dismissed litigation filed against certain underwriters in connection with the claims to be assigned to the plaintiffs under the settlement. In April 2006, the District Court held a final fairness hearing to determine whether to grant final approval of the settlement. In December 2006, the U.S. Court of Appeals for the Second Circuit vacated the District Court’s decision certifying as class actions the six lawsuits designated as “focus cases.” Thereafter the District Court ordered a stay of all proceedings in all of the lawsuits pending the outcome of plaintiffs’ petition to the Second Circuit for rehearing en banc. In April 2007, the Second Circuit denied plaintiffs’ rehearing petition, but clarified

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SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

that the plaintiffs may seek to certify a more limited class in the District Court. Accordingly, the settlement as originally negotiated was terminated pursuant to stipulation and will not receive final approval. Plaintiffs filed amended complaints in the six focus cases in August 2007. Sequenom is not one of the focus case issuers. In September 2007, Sequenom’s named officers and directors again extended the tolling agreement with the plaintiffs. Also in September 2007, the plaintiffs moved to certify the classes alleged in the focus cases and to appoint class representatives and class counsel in those cases. The focus case issuers filed motions to dismiss the claims against them in November 2007 and an opposition to plaintiffs’ motion for class certification in December 2007. The District Court denied the motions to dismiss in March 2008. On October 2, 2008, the plaintiffs withdrew their class certification motion. A deadline for the focus case defendants to answer the amended complaints has not been set.

On June 5, 2008, we were named as a defendant in a complaint filed by plaintiffs Beckman Coulter Inc. and Orchid Cellmark Inc. in the United States District Court for the Southern District of California. In the complaint, the plaintiffs allege that we are infringing three patents owned by Orchid Cellmark Inc. and licensed to Beckman Coulter Inc. by making and selling our iPLEX products and teaching our customers how to use the products. The plaintiffs seek a permanent injunction enjoining us from further infringement, and unspecified monetary damages, including lost profits, enhanced damages pursuant to 35 U.S.C. § 284, costs, attorneys’ fees and other relief as the court deems just and proper. On August 15, 2008, we filed an answer and counter claims against plaintiffs seeking declaratory judgments that the patents are not infringed and are invalid and/or unenforceable. Discovery is currently in progress. We believe that the plaintiffs’ claims are without merit and will vigorously defend against the claims advanced in the complaint.

On October 30, 2008, we filed a patent infringement suit against Ibis Biosciences, Inc., a subsidiary of Isis Pharmaceuticals, Inc. The complaint was served on the defendant in February 2009. Ibis has been acquired by Abbott Molecular. The lawsuit was filed in the United States District Court for the District of Delaware. The lawsuit alleges that the sale or offer for sale of the Ibis T5000 Biosensor System and related technology infringes three U.S. patents: 6,300,076, 6,500,621 and 7,419,787. We are seeking a permanent injunction enjoining the defendant from further infringement and monetary damages, including enhanced damages pursuant to 35 U.S.C. § 284, costs, attorneys’ fees and other relief as the court deems just and proper.

In addition, from time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business.

9. Related Party Transactions

We had the following transactions with parties related to certain of our Board members:

• Boston University. Dr. Charles Cantor is our Chief Scientific Officer, a member of our Board and was previously the chair and professor of the department of biomedical engineering and biophysics, and Director of the Center for Advanced Biotechnology at Boston University. We have agreements with Boston University in which Dr. Cantor participates under which we paid $0.9 million, $0.4 million, and $0.4 million, respectively We recorded product revenue for MassARRAY hardware and consumables, totaling $0.1 million, $0.1 million, and $0.1 million, in the years ended December 31, 2008, 2007 and 2006, respectively.

• University of California, San Diego. Dr. Cantor is adjunct professor in the department of bioengineering at the University of California, San Diego, or UCSD. We recorded product revenue for MassARRAY hardware and consumables, totaling $24,000, $2,000 and $42,000 in the years ended December 31, 2008, 2007 and 2006, respectively.

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SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

• Dr. Richard Lerner is a member of our Board of Directors and is President of The Scripps Research Institute. For the years ended December 31, 2008, 2007, and 2006, we have recorded product revenue for MassARRAY hardware and consumables totaling approximately $30,000, $318,000, and $101,000, respectively.

At December 31, 2008, we had a the following receivable and payable balances with the above related parties:

Related party	Receivables		Payables
	(in thousands)
Boston University	$	5	$	90
Scripps Research Institute		13		—
UCSD		—		—
Total	$	18	$	90

At December 31, 2007, we had the following receivable and payable balances with the above related parties:

Related party	Receivables		Payables
	(in thousands)
Boston University	$	27	$	118
UCSD		—		—
Total	$	27	$	118

10. Stockholders’ Equity

On July 1, 2008, we closed an underwritten public offering of our common stock totaling 5,500,000 shares of our common stock at $15.50 per share, with the underwriters exercising their option to purchase an additional 825,000 shares on July 8, 2008. Including the additional shares, the offering resulted in aggregate net proceeds of approximately $91.8 million after deducting underwriting discounts, commissions and estimated transaction expenses.

During 2007, we closed a $20.0 million registered direct offering of our common stock to several new and existing investors, as well as a $30.5 million private placement of our common stock. Under the terms of the registered direct offering we issued and sold 6,666,666 shares of our common stock at $3.00 per share, with aggregate net proceeds of approximately $18.3 million after deducting placement agents’ fees and transaction expenses. Under the terms of the private placement we issued and sold 3,383,335 shares of our common stock at $9.00 per share, with net aggregate proceeds of approximately $28.1 million after deducting placement agents’ fees and estimated transaction expenses.

Stock Compensation Plans

On May 31, 2006, the stockholders approved our 2006 equity incentive plan, or 2006 plan, as the successor to our 1999 stock option plan, or 1999 plan. In connection with the adoption of the 2006 plan, we terminated the automatic annual increase feature under the 1999 plan and resolved to cease to grant additional stock awards under the 1999 plan following the effectiveness of the 2006 plan. The aggregate number of shares of common

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SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

stock that may be issued under the 2006 plan is 8,188,620, plus the number of shares subject to any stock awards under the 1999 plan that terminate or are forfeited or repurchased and would otherwise have been returned to the share reserve under the 1999 plan.

Stock Options

The estimated fair value of each stock option award granted was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions for stock option grants during the years ended December 31, 2008, 2007 and 2006:

	2008			2007			2006
Risk free interest rates		3.17	%		4.51	%		4.95	%
Volatility		87	%		82	%		101	%
Dividend yield		0	%		0	%		0	%
Expected option term (years)		6.6			6.4			6.7
Weighted average fair value of stock option grants to employees	$	8.81		$	4.09		$	1.65

The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected term of our employee stock options. The expected volatility is based on the historical volatility of our stock. We have not paid any dividends on common stock since our inception and do not anticipate paying dividends on common stock in the foreseeable future. The computation of the expected option term is based on a weighted-average calculation combining the average life of stock options that have already been exercised or cancelled with the estimated life of all unexercised stock options.

SFAS 123(R) requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Pre-vesting forfeitures were estimated to be 10.4% based on historical experience. Our determination of fair value is affected by our stock price as well as a number of assumptions that require judgment. Changes in forfeiture estimates impact compensation cost in the period in which the change in estimate occurs.

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SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

A summary of the status of our stock option plans as of December 31, 2008 and of changes in stock options outstanding under the plans during the years ended December 31, 2008, 2007 and 2006 is as follows:

Outstanding	Shares Subject to Options		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding at December 31, 2005	1,829,242		$	13.21
Granted	2,159,660			1.95
Canceled	(689,685	)		10.43
Exercised	(13,434	)		3.37
Outstanding at December 31, 2006	3,285,783		$	6.45
Granted	2,232,976			5.38
Canceled	(270,452	)		5.20
Exercised	(168,071	)		2.98
Outstanding at December 31, 2007	5,080,236		$	6.16
Granted	1,705,652			11.63
Canceled	(265,892	)		6.73
Exercised	(281,925	)		4.55
Outstanding at December 31, 2008	6,238,071		$	7.70	7.76	$	83,428,931
Options vested and exercisable at December 31, 2008	2,956,730		$	7.88	6.91	$	42,749,936

As of December 31, 2008, there was $14.8 million of unamortized compensation cost related to unvested stock option awards, which is expected to be recognized over a remaining weighted-average vesting period of 2.4 years. Cash received from stock option exercises for the years ended December 31, 2008 and 2007 was $1,295,000 and $446,000, respectively.

At December 31, 2008, 1,824,020 shares were available for future option grants.

A further breakdown of the options outstanding as of December 31, 2008 is as follows:

Range of Exercise Prices	Options Outstanding	Weighted Average Remaining Life in Years	Weighted Average Exercise Price		Options Exercisable	Weighted Average Exercise Price of Options Exercisable
$1.69 – $1.83	397,394	7.49	$	1.75	243,230	$	1.75
$1.85 – $1.87	1,082,373	7.43	$	1.87	708,925	$	1.87
$1.89 – $3.30	726,239	6.94	$	2.76	529,610	$	2.87
$3.39 – $4.60	771,245	7.84	$	4.35	421,007	$	4.33
$4.62 – $4.81	212,375	7.95	$	4.68	83,547	$	4.67
$4.93	633,912	8.52	$	4.93	209,361	$	4.93
$4.97 – $8.16	835,535	8.75	$	7.46	176,447	$	7.28
$8.22 – $11.04	711,945	8.18	$	9.27	264,144	$	9.46
$11.07 – $20.58	648,877	7.82	$	17.01	177,669	$	15.67
$22.20 – $105.00	218,176	4.64	$	54.88	142,790	$	71.45
$1.69 – $105.00	6,238,071	7.76	$	7.70	2,956,730	$	7.88

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SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

Restricted Stock Awards and Deferred Compensation

On January 18, 2007, we granted restricted stock awards to certain executive officers and employees. At December 31, 2007, 57,126 shares with a weighted average grant date fair value of $4.60 per share remained outstanding and 7,247 shares were cancelled prior to vesting. The awards fully vested on January 18, 2008.

On October 18, 2007, we granted 50,000 restricted stock units to an executive officer with a grant date fair value of $11.04. These units vest over 4 years, with 13/48th of the units vesting 13 months after the grant date, then vest in equal monthly installments thereafter. At December 31, 2008, 14,542 units have vested and 35,458 units remain outstanding and unvested.

On January 29, 2008, we granted 18,628 restricted stock awards and 20,974 restricted stock units to certain executive officers and employees with a weighted average grant date fair value of $8.16 per share. During 2008, restricted stock awards totaling 1,781 were cancelled. The remaining stock awards will be fully vested on January 29, 2009 and the restricted stock units will be fully vested on February 28, 2009.

On July 17, 2008, we granted 55,555 restricted stock units to an executive officer with a grant date fair value of $20.00 per share. These units vest over 4 years, with 13/48th of the units vesting 13 months after the grant date, then vest in equal monthly installments thereafter. At December 31, 2008, all units remain outstanding and unvested.

Employee Stock Purchase Plan

In 1999, we adopted the 1999 Employee Stock Purchase Plan, or 1999 ESPP. As of December 31, 2008, we had reserved 851,676 shares of common stock for issuance under the 1999 ESPP. Beginning in 2001, the amount of authorized shares available under the 1999 ESPP automatically increases each January 1st by an amount equal to 1% of the outstanding common stock on the last trading day of the prior year, subject to an annual increase limitation of 166,666 shares. The 1999 ESPP provides for a series of concurrent offering periods, each with a maximum duration of 24 months. Shares are purchased semi-annually at 85% of the lower of the beginning or end of the period price.

In October 2006, our Board of Directors approved a change to all offerings under the 1999 ESPP that commence on or after February 1, 2007. New offerings are for a duration of six months and consist of one purchase interval, but do not impose either an individual or all-participant limitation on the number of shares purchasable on a purchase date, although the 1999 ESPP limits stock purchases to $25,000 per individual per calendar year. Participants had the option of: continuing under the current plan offering period until its expiration, or withdrawing from the current offering prior to its expiration and enrolling in the new offering commencing on February 1, 2007. Those employees not electing to enroll in the new offering period continued under the then current offering until the 24 month offering period expires. On July 31, 2008, the final 24 month offering period expired and all ESPP participants are now under six month offering periods. As of December 31, 2008, employees have contributed approximately $0.4 million to the current offering of the 1999 ESPP, since the beginning of the offering period that commenced August 1, 2008. For the year ended December 31, 2008 and 2007, we have recognized approximately $360,000 and $11,000, respectively, as share-based compensation expense related to the 1999 ESPP Plan.

Warrants

In connection with the acquisition of Axiom Biotechnologies in 2002, we assumed an outstanding warrant to purchase 7,333 Axiom ordinary shares at an exercise price of $10.50, which was adjusted to become a warrant

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SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

to purchase 1,535 shares of our common stock at an exercise price of $50.19 per share. As of December 31, 2008, this warrant has not been exercised and expires in December 2011.

In connection with an amendment to our lease for our corporate headquarters in San Diego, California in September 2005, we issued to the landlord a warrant to purchase 50,000 shares of our common stock with an exercise price of $2.64 per share. The warrant expires in October 2015. As of December 31, 2008, the warrant remains outstanding and exercisable.

In connection with the private placement financing completed in June 2006, we issued to the investors warrants to purchase an aggregate of 11,999,999 shares of our common stock at an exercise price of $2.10 per share. These warrants contain anti-dilution provisions that adjust the exercise price and number of shares subject to the warrants upon reorganization, mergers, stock splits and combinations, reclassifications of our common stock, stock dividends, or other issuances of our common stock at purchase prices less than the warrants’ exercise price (other than certain exempt issuances, such as sales of common stock to our employees or conversions of convertible securities and options that were outstanding prior to the issuance of the warrants). During 2008, investors exercised all remaining warrants of 11,301,499 in a series of cashless exercises to purchase 8,982,521 shares of our common stock. As of December 31, 2008, no warrants remain unexercised with the investor group from our private placement completed in June 2006.

Additionally in connection with the June 2006 private placement financing, we issued to our placement agent a warrant to purchase 866,666 shares of our common stock at an exercise price of $2.52 per share. This warrant contains anti-dilution provisions that adjust the exercise price and number of shares subject to the warrants upon reorganization, mergers, stock splits and combinations, reclassifications of our common stock, or stock dividends, but not for other issuances of our common stock. During 2007 the placement agent transferred portions of the warrant to certain of its employees. During 2008, the placement agent and its transferees had exercised warrants in both cash and cashless exercises to purchase an aggregate of 110,781 shares of our common stock. As of December 31, 2008, warrants to purchase an aggregate of 7,500 shares remained outstanding and exercisable and expire in June 2011.

11. Income Taxes

On July 13, 2006, the FASB issued FIN 48, which clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with SFAS 109, and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under FIN 48, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, FIN 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 was effective for fiscal years beginning after December 15, 2006.

We adopted the provisions of FIN 48 on January 1, 2007. There were no unrecognized tax benefits as of the date of adoption and there are no unrecognized tax benefits included in the balance sheet at December 31, 2008.

Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. We had no accrual for interest and penalties on our balance sheets at December 31, 2008 and 2007 and have recognized no interest and/or penalties in the statement of operations for the year ended December 31, 2008.

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SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

We are subject to taxation in the U.S., foreign and various state jurisdictions. Our tax years for 1994 and forward are subject to examination by the Federal and California tax authorities due to the carryforward of unutilized net operating losses and research and development credits.

We completed a Section 382/383 analysis regarding the limitation of net operating loss and research and development credit carryforwards in April 2008. As of December 31, 2008, we have updated our unrecognized tax benefits under FIN 48. Due to the existence of the valuation allowance, future changes in our unrecognized tax benefits will not impact our effective tax rate.

The reconciliation of income tax computed at the Federal statutory tax rate to the expense/(benefit) for income taxes is as follows:

	December 31,
	2008			2007			2006
	(In thousands)
Tax at statutory rate	$	(15,380	)	$	(7,694	)	$	(6,370	)
State taxes, net of federal benefit		(2,525	)		(1,263	)		(1,010	)
Change in valuation allowance		29,532			(108,313	)		6,950
Credits and other		(11,416	)		117,270			(192	)
	$	211		$	—		$	(622	)

The 2008 income tax expense of $211,000 and the 2006 income tax benefit of $0.6 million are comprised of foreign current and deferred taxes.

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are shown below. A full valuation allowance has been recorded, as realization of such assets is uncertain.

	December 31,
	2008			2007
	(In thousands)
Deferred tax assets:
Net operating loss carryforwards	$	32,221		$	3,759
Capitalized research expenses		11,387			13,120
Other, net		8,684			6,136
Total deferred tax assets		52,292			23,015
Valuation allowance		(52,292	)		(23,015	)
Net deferred tax assets (liabilities)	$	—		$	—

At December 31, 2008, we have federal and state tax net operating loss carryforwards of approximately $74.7 million and $74.7 million, respectively. The federal and state tax loss carryforwards are reduced by the Section 382 limitation. The federal tax loss carryforwards will begin to expire in 2021, unless previously utilized.

We also have German net operating loss carryforwards of approximately $11.0 million, which may be carried forward indefinitely. We have discontinued operations in the United Kingdom (U.K.) and therefore, have removed our U.K. net operating loss carryforwards of $35.6 million from our deferred tax schedule as of December 31, 2007.

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SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

We also have federal and California research and development tax credit carryforwards of approximately $1.8 million and $8.9 million, respectively. The federal research and development credits have been reduced by the Section 383 limitation. The federal research and development tax credit carryforwards will begin to expire in 2011 unless previously utilized. The California research and development credit carryforward indefinitely.

12. Savings and Pension Plans

We have a 401(k) savings plan covering most United States employees. In the United Kingdom we make contributions to defined contribution pension plans. Under these plans, individual employees may make contributions to the plan, which can be matched by us in an amount determined by the Board of Directors or as determined by local statutes. We made no matching contributions in 2008, 2007 and 2006.

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SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

13. Geographic Information

We have wholly-owned subsidiaries located in Germany, the United Kingdom, India, Hong Kong and Japan and have customer and vendor relationships worldwide. The following table presents information about us by geographic area. There were no material amounts of transfers between geographic areas. Included in the consolidated balance sheets and consolidated statements of operations are the following domestic and foreign components at December 31, 2008, 2007 and 2006:

	December 31,
	2008			2007			2006
	(In thousands)
Current assets:
United States	$	111,717		$	59,992		$	29,953
Europe		6,911			6,313			3,225
Asia		3,656			2,087			1,230
	$	122,284		$	68,392		$	34,408
Equipment and leasehold improvements, net:
United States	$	8,655		$	5,559		$	4,149
Europe		433			276			374
Asia		107			124			5
	$	9,195		$	5,959		$	4,528
Other assets:
United States	$	8,928		$	1,695		$	945
Europe		77			—			—
	$	9,005		$	1,695		$	945
Total assets:
United States	$	129,300		$	67,245		$	35,047
Europe		7,344			6,590			3,599
Asia		3,840			2,211			1,235
	$	140,484		$	76,046		$	39,881
Revenues:
United States	$	23,806		$	22,243		$	15,947
Europe		13,272			10,821			7,829
Asia		10,071			7,938			4,720
	$	47,149		$	41,002		$	28,496
Net income (loss):
United States	$	(21,256	)	$	(12,690	)	$	(13,035	)
Europe		(6,856	)		(2,527	)		661
Asia		(16,042	)		(6,766	)		(5,203	)
	$	(44,154	)	$	(21,983	)	$	(17,577	)

F-31

SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

14. Selected Quarterly Financial Data (unaudited)

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total Year
	(In thousands, except share information)
2008
Net sales	$	10,574		$	12,845		$	11,570		$	12,160		$	47,149
Gross profit		5,903			7,383			7,042			7,231			27,559
Net loss		(8,626	)		(9,743	)		(10,371	)		(15,414	)		(44154	)
Net loss per share, basic and fully diluted	$	(0.19	)	$	(0.21	)	$	(0.18	)	$	(0.25	)	$	(0.83	)
Shares used in calculated per share amounts, historical, basic and fully diluted		45,330			47,147			59,115			60,775			53,129
2007
Net sales	$	9,892		$	10,153		$	9,844		$	11,113		$	41,002
Gross profit		5,466			5,998			5,371			6,090			22,925
Net loss		(3,768	)		(4,807	)		(5,493	)		(7,915	)		(21,983	)
Net loss per share, basic and fully diluted	$	(0.11	)	$	(0.13	)	$	(0.14	)	$	(0.18	)	$	(0.57	)
Shares used in calculated per share amounts, historical, basic and fully diluted		33,447			38,008			40,262			43,618			38,865

15. Subsequent Events

On February 27, 2009, we completed an asset purchase agreement among us, our wholly owned subsidiary SCMM, SensiGen, LLC, a Michigan limited liability company (SensiGen), and George Smith (solely to act as the representative of the members of SensiGen), in which SCMM acquired certain assets from SensiGen related to their business in gene-based molecular diagnostic tests relating to cervical cancer, head and neck cancer, chronic kidney disease and lupus (the Transaction). Under the terms of the Transaction, we paid to SensiGen cash consideration of approximately $1.9 million, and issued common stock of 92,679 shares utilizing the minimum floor price of $20.94 per share as defined by the Transaction. An additional $1,300,000 (the Milestone Amount) will be payable to SensiGen upon the completion of certain triggering events as provided for in the Transaction with any shares of our common stock issued as consideration for the Milestone Amount to be priced at the average closing price of our common stock over the ten trading day period ending on the third trading day prior to the applicable triggering event for such payment. In connection with this transaction we have commenced a valuation study of the intangible assets acquired in order to allocate the purchase price in accordance with SFAS 141(R). We anticipate this valuation study to be completed in the second quarter of 2009.

Assets acquired in the Transaction include intellectual property, trade secrets and other general intangibles related to the SensiGen’s AttoSense™ portfolio of tests, including tests for the detection and monitoring of human papillomavirus, systemic lupus erythematosus, chronic kidney disease and inflammatory bowel disease.

F-32

SEQUENOM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2008

On January 27, 2009, we commenced an exchange offer to acquire all of the outstanding shares of common stock of EXACT Sciences Corporation in an all-stock exchange valued at approximately $41.0 million. The exchange offer was subsequently terminated by us on January 28, 2009.

On March 3, 2009, our Board of Directors adopted a Share Purchase Rights Plan (the Rights Plan). The terms of the Rights Plan provide for a dividend distribution of one preferred share purchase right (a Right) for each outstanding share of our common stock, par value $0.001 per share. Common Shares that are newly issued after the record date of March 20, 2009, will also carry Rights.

The Rights have certain anti-takeover effects and will cause substantial dilution to a person or group that attempts to acquire us on terms not approved by our Board of Directors. The Rights should not interfere with any merger or other business combination approved by the Board of Directors since the Rights may be amended to permit such acquisition or redeemed by us at $0.001 per Right prior to the earliest of (i) the time that a person or group has acquired beneficial ownership of 15% or more of the Common Shares or (ii) the final expiration date, as defined by the Rights Plan.

F-33

Schedule II—SEQUENOM, INC.

Valuation and Qualifying Accounts

($ in thousands)

Description	Balance at Beginning of Period		Charged to Costs and Expenses			Deductions			Balance at End of Period
Year ended December 31, 2008:
Allowance for doubtful accounts	$	186	$	281		$	62		$	405
Reserve for obsolete or excess inventory		1,089		1,180			460	(1)		1,809
Year ended December 31, 2007:
Allowance for doubtful accounts	$	117	$	143		$	74		$	186
Reserve for obsolete or excess inventory		1,082		185			178	(1)		1,089
Year ended December 31, 2006:
Allowance for doubtful accounts	$	25	$	96		$	4		$	117
Reserve for obsolete or excess inventory		3,142		(696	)		1,364	(1)		1,082

(1) Write off of obsolete or excess inventory

F-34

EX-10.29

Exhibit 10.29

SEQUENOM INC.

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (this “Agreement”) is entered into between Sequenom, Inc. a Delaware corporation (the “Company”) and Harry Stylli, Ph.D. (“Employee”), on December 15, 2008. This Agreement shall replace and supersede that certain Employment Agreement between Employee and the Company entered into effective as of May 31, 2005 (the “Prior Agreement”). In consideration of, and as a condition of Employee’s employment by the Company, and of the compensation to be paid to Employee by the Company, and in recognition of the fact that Employee will have access to the Company’s confidential, proprietary, and trade secret information, the Company and Employee agrees to the terms and conditions set forth in this Agreement as follows:

1. Employment. Director.

1.1 Employment. Employee will continue to be employed by the Company as its President and Chief Executive Officer. Employee previously commenced employment with the Company in June 2005, (such hire date is referred to herein as the “Hire Date”). Employee agrees that Employee’s employment with the Company is on an at-will basis, is for no specified term and may be terminated by the Company at any time, with or without Cause (as defined in Section 10(c) herein), in accordance with and subject to the terms of Section 10 of this Agreement. Similarly, Employee may terminate employment with the Company at any time for any reason upon written notice as provided in Section 10 of this Agreement. Employee understands and agrees that the at-will nature of Employee’s employment relationship with the Company cannot be changed or modified except by a written agreement signed by the Chairman of the Board of Directors of the Company (the “Board”).

1.2 Director. Effective as of the Hire Date, employee was elected to the Board. Employee agrees to resign as a director of the Company, if requested to do so by the Board, upon the termination of his employment with the Company.

2. Duties of Employee. Employee shall report to the Board. Employee shall have overall responsibility for the management, direction, and operations of the Company. Employee shall perform such other duties and have such other responsibilities as may be assigned to Employee from time to time by the Board.

3. Loyalty. As long as Employee is employed by the Company, Employee shall devote full time and efforts to the Company and shall not, without the Company’s prior express written consent, engage directly or indirectly in any employment, consulting or business activity other than for the Company. Notwithstanding the foregoing, the Company agrees that Employee may continue to provide services as a member of the board of directors of Xencor and Molecular Insight Pharmaceuticals, as an advisor to Nanosyn and as a passive owner in a start-up internet business that is tentatively named BIZbt. In addition, Employee may serve as director or trustee of one or more other corporations or foundations (either for-profit or not-for-profit) if such service has been approved by the Board. Employee will refer to the Company all corporate opportunities Employee learns of as a result of service of an employee of the Company.

4. Compensation and Benefits.

4.1 Salary. Employee’s annual base salary shall be $441,000, less standard deductions and withholdings, payable in accordance with the Company’s standard

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payroll policy. Such base salary may be increased, subject to approval by the Compensation Committee of the Board.

4.2 Bonus. Employee shall be eligible for an annual performance bonus of up to 50% of Employee’s applicable annual base salary (the “Target Bonus”), less standard deductions and withholdings. The amount of the bonus, if any, will be determined by the Company’s and Employee’s performance against specific measurable corporate and personal goals established annually by the Compensation Committee of the Board. The Target Bonus shall be paid during the calendar year that follows the calendar year for which it was earned.

4.3 Inducement Stock Options. Effective as of the Hire Date and as an inducement to join the Company, the Company granted to Employee stock options to purchase an aggregate of 1,000,000 shares of the common stock of the Company, $0.001 par value per share (the “Common Stock”). The exercise price for such stock options was equal to the fair market value of the Common Stock on the Hire Date, as determined by the Board. Such stock options have a 10 year term and become exercisable or “vest” as described in the individual stock option agreement (twenty-five percent after one year of employment from the Hire Date, and the balance in 36 equal monthly installments thereafter so long as Employee remains employed by the Company), subject to acceleration as set forth below. In addition, Employee will be permitted to exercise such stock options for up to one year following termination of his employment by the Company (but in any event no later than the end of the maximum permitted term of the option). Such stock options shall not vest during the Consulting Period (as defined in Section 12.1 herein) or any other time that Employee is not employed by the Company. The other terms and conditions of such stock options are as set forth in the individual stock option agreements, which shall be the Company’s standard form of option agreement and consistent with its 1999 Stock Incentive Plan (the “Option Plan”); provided, however, that such stock options may not be granted pursuant to the Option Plan.

4.4 Contingent Stock Options. Upon the closing of the sale by the Company of any equity financing (which may include one or more related closings for the sale of newly issued shares of Common Stock or preferred stock or other securities convertible into or exercisable for Common Stock) for aggregate gross proceeds of at least $10 million prior to July 1, 2006, the Company shall grant to Employee pursuant to the Option Plan additional stock options to purchase that number of shares of Common Stock necessary for Employee to retain an equivalent ownership position, on a fully diluted basis (assuming the exercise and conversion of all outstanding securities convertible into or exercisable for Common Stock), as that held by Employee immediately prior to such closing. Such additional stock options, if granted, shall have an exercise price equal to the fair market value of the Common Stock on the date of such closing, as determined by the Board. Such additional stock options, if granted, shall have a 10 year term and vest as described in the individual grant option agreement (twenty-five percent after one year of employment from the date of grant, and the balance in 36 equal monthly installments thereafter so long as Employee remains employed by the Company), subject to acceleration as set forth below. In addition, Employee will be permitted to exercise such stock options for up to one year following termination of his employment by the Company (but in any event no later than the end of the maximum permitted term of the option). Such additional stock options shall not vest during the Consulting Period or any other time that Employee is not employed by the Company. The other terms and conditions of such stock options shall be governed by the Option Plan and the individual stock option agreements.

4.5 Change in Control Plan. Employee shall be an eligible “Participant” in the Company’s Change in Control Severance Benefit Plan (the “Change in Control Plan”.

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4.6 Other Benefits. Employee shall receive the following employee benefits:

(a) participation for Employee and his family in the Company’s group health insurance programs;

(b) term life insurance coverage of $1,000,000;

(c) disability insurance providing long-term coverage of $20,000 per month; and

(d) 8 Company-wide holidays, 8 individual floating holidays and 17 paid vacation days (excluding individual floating holidays) per calendar year.

In the case of clauses (a), (b) and (c) above, with insurance companies and on such other terms, including but not limited to eligibility, exclusions and coverage limitations, as are reasonably acceptable to Employee; provided, however, that the aggregate additional cost to the Company of the insurance coverage described in clauses (b) and (c) in excess of that provided to employees of the Company generally shall not exceed $15,000 per year and if such cost would exceed $15,000, Employee shall be entitled to adjust the coverage so that such aggregate additional cost shall not exceed $15,000. In addition, Employee shall be entitled to participate in such employee benefit plans and to receive such other fringe benefits as are customarily afforded the Company’s employees. Employee understands that, except when prohibited by applicable law, the Company’s employee benefit plans and fringe benefits, including the Option Plan, may be amended, enlarged, diminished or terminated by the Company from time to time, in its sole discretion.

4.7 Expense Reimbursement. Upon submission of itemized expense statements in the manner specified by the Company, the Company will pay Employee’s reasonable travel and other reasonable business expenses incurred by Employee in the furtherance of and in connection with Employee’s employment hereunder, provided that Employee submits receipts or other documentation for such expenses no later than ninety (90) days after incurring such expenses. The Company shall reimburse all such eligible expenses promptly, but in no event later than ninety (90) after receiving such documentation.

5. Employee’s Performance.

5.1 Rules, Procedures and Standards. Employee shall use best efforts to perform assigned duties diligently, loyally, conscientiously, and with reasonable skill, and shall comply with all rules, procedures and standards promulgated from time to time by the Company. Among such rules, procedures and standards are those governing ethical and other professional standards for dealing with customers, government agencies, vendors, competitors, consultants, fellow employees, and the public-at-large; security provisions designed to protect the Company’s property and the personal security of the Company’s employees; rules respecting attendance, punctuality, and hours of work; and, rules and procedures designed to protect the confidentiality of the Company’s proprietary and trade secret information. The Company agrees to make reasonable efforts to inform Employee of such rules, standards and procedures as are in effect from time to time.

5.2 Employee Handbook. The employment relationship between the Company and Employee shall be governed by the policies and practices established by the Company and the Board. Employee will acknowledge in writing that he has read the

3

Company’s Employee Handbook, which will govern the terms and conditions of his employment with the Company, along with this Agreement. In the event that the terms of this Agreement differ from or are in conflict with the Company’s policies or practices or the Company’s Employee Handbook, this Agreement shall control.

5.3 Additional Representations. Employee hereby represents and warrants that (i) Employee has the full right to enter into this Agreement and perform the services required of hereunder, without any restriction whatsoever, and (ii) in the course of performing services hereunder, Employee will not violate the terms or conditions of any agreement between Employee and any third party. It is the understanding of both the Company and Employee that Employee shall not divulge to the Company or any of its subsidiaries any confidential information or trade secrets belonging to others, including Employee’s former employers, nor shall the Company or any of its affiliates seek to elicit from Employee any such information. Consistent with the foregoing, Employee shall not provide to the Company or any of its affiliates, and the Company and its affiliates shall not request, any documents or copies of documents containing such information.

6. The Company’s Management Rights. The Company retains its full management prerogatives and discretion to manage and direct its business affairs, including the adoption, amendment or modification of research, development, production or marketing decisions as it sees fit, notwithstanding any individual interest in, or expectation, Employee may have regarding a particular business program or product.

7. Nondisclosure of Confidential, Proprietary or Trade Secret Information. As a condition of continued employment, Employee agrees to continue to abide by the Proprietary Information and Inventions Agreement previously entered into in conjunction with the Prior Agreement (the “Inventions Agreement”). The termination of employment shall not release Employee from Employee’s obligations under the Inventions Agreement or as established by applicable laws or the Company’s policies.

8. No Solicitation of Customers or Employees. Employee acknowledges that the Company has invested substantial time, effort and expense in compiling its confidential, proprietary and trade secret information and in assembling its present staff of personnel. In order to protect the business value of the Company’s confidential, proprietary and trade secret information, during Employee’s employment with the Company and for one year immediately following the termination of that employment with the Company:

(a) Employee agrees that information regarding all customers and all prospective customers of the Company, of which Employee learns during Employee’s employment with the Company, may constitute “Proprietary Information” of the Company as defined in the Inventions Agreement.

(b) Employee agrees not to, directly or indirectly, induce or solicit any of the Company’s employees to leave their employment with the Company.

9. Return of Property. Upon the termination of Employee’s employment with the Company or at any other time upon request of the Company, Employee shall promptly return any and all customer or prospective customer lists, other customer or prospective customer information or related materials, formulas, computer data and programs, specifications, drawings, blueprints, data storage devices, reproductions, sketches, notes, memoranda, reports, records, proposals, business plans, or copies of them, other documents, materials,

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tools, equipment, and all other property belonging to the Company or its customers which Employee then possesses. Employee further agrees, that upon termination of his employment, Employee shall not take any documents or data of any description containing or pertaining to the Company’s Proprietary Information or Inventions, as those terms are defined in the Inventions Agreement. Upon leaving the Company’s employment, Employee agrees to sign a Termination Certificate confirming that Employee has complied with the requirements of this Section 9 and that Employee is aware that certain restrictions imposed by this Agreement continue after termination of Employee’s employment. Employee further understands that Employee’s continuing obligations under the Inventions Agreement will continue even if Employee does not sign a Termination Certificate.

10. Termination. Employee’s employment hereunder shall terminate upon the occurrence of any of the following events:

(a) The death or legal incapacity of Employee.

(b) Written notice from the Company to Employee of Employee’s employment termination as a result of Employee’s permanent disability. For purposes of this Agreement, Employee’s “permanent disability” shall be deemed to have occurred if Employee shall become physically or mentally incapacitated or disabled and unable fully to discharge his duties hereunder by reason of any medically determinable physical or mental impairment for a period of 180 consecutive calendar days; provided that in no event shall Employee’s permanent disability be deemed to have occurred if Employee is not then eligible to receive the long-term disability insurance benefits described in Section 4.6 of this Agreement. The existence of Employee’s permanent disability shall be determined on the advice of a physician mutually acceptable to the Company and Employee (or Employee’s legal representative).

(c) Written notice from the Company to Employee of Employee’s employment termination by the Company for Cause (as hereafter defined). The Company shall have “Cause” for termination of Employee’s employment if any of the following occur:

i. Employee is convicted of, or pleads guilty or nolo contendere to, any felony, or any lesser crime or offense having as its predicate element fraud or dishonesty;

ii. Employee misappropriates or steals any of the property of the Company;

iii. Employee knowingly and willfully perpetrates any act or omission that submits the Company to criminal liability or knowingly and willfully causes the Company to commit a material violation of local, state or federal laws, rules or regulations;

iv. Employee breaches any provision of this Agreement or the Inventions Agreement and such breach has a material adverse effect on the Company and its subsidiaries, taken as a whole, which breach remains uncured 30 days following Employee’s receipt of written notice from the Board specifying the nature of such breach;

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v. Employee breaches any provision of any other agreement between Employee and the Company, or any material policy of the Company applicable to Employee (including, but not limited to, the Insider Trading Policy), and such breach has a material adverse effect on the Company and its subsidiaries, taken as a whole, which breach remains uncured 30 days following Employee’s receipt of written notice from the Board specifying the nature of such breach; or

vi. Employee breaches any fiduciary duty owed by Employee to the Company or its stockholders, and such breach has a material adverse effect on the Company and its subsidiaries, taken as a whole, or its stockholders, which breach remains uncured 30 days following Employee’s receipt of written notice from the Board specifying the nature of such breach.

(d) Written notice from the Company to Employee that Employee’s employment is being terminated without Cause;

(e) Employee’s written notice of resignation to the Company for Good Reason. For purposes of this Agreement, “Good Reason” means the occurrence of one or more of the following events without Employee’s prior written consent:

i. A material reduction in Employee’s authority, duties or responsibilities, including a change in title or reporting relationships in connection with a Change in Control (as defined in Section 11.2);

ii. A reduction by the Company in Employee’s annual base salary, unless there is a corresponding reduction in the base salary of all executive officers of the Company;

iii. A material adverse change by the Company to the Target Bonus or to the criteria, milestones or objectives related to the Target Bonus that is reasonably likely to result in the Employee earning less than the Target Bonus during the subsequent applicable period;

iv. Any requirement, as a condition to continued service, that Employee enter into any agreement with the Company regarding confidentiality, non-competition, non-solicitation or other similar restrictive covenant that is materially more restrictive than Employee’s written obligations with the Company under which Employee is then bound;

v. Any Board action or assignment related to Employee that (i) is contrary to applicable law, regulatory guidelines or accounting standards or which constitutes an unethical business practice and (ii) is not cured by the Board within 30 days of receipt of written notice by Employee objecting to such action or assignment; or

6

vi. A relocation of Employee’s principal place of work to a location that would increase the Employee’s one-way commute from his or her personal residence to the new principal place of work by more than 15 miles.

(f) Employee’s written notice to the Company of resignation without Good Reason. Employee agrees to provide the Company with four weeks notice of Employees’ intent to resign and Employee’s resignation shall not become effective until the end of that four week notice period unless Employee and the Company mutually agree otherwise.

11. Payment After Termination.

11.1 Effect of Termination. Following termination of Employee’s employment, all payments and benefits provided to Employee under this Agreement shall cease as of the date of such termination.

11.2 Severance Without Change in Control. In the event Employee’s employment is terminated by the Company pursuant to Section 10(d) or by Employee pursuant to Section 10(e) and Employee is not entitled to severance benefits under the Change in Control Plan, then subject to Employee’s execution and delivery to the Company of a Release and Waiver of claims in the form attached hereto as Exhibit A within the applicable time period set forth therein, but in no event later than forty-five days following the date of termination, and permitting such Release to become effective in accordance with its terms, the Company shall: (i) pay Employee severance pay in the form of continuation of Employee’s then current base salary, less standard deductions and withholdings, for a period of twelve months from the effective date of Employee’s termination of employment with the Company, with such payments to be made at the same time as Employee’s base salary otherwise would have been payable; (ii) pay Employee an amount equal to 50% of the then current Target Bonus, less standard deductions and withholdings, in equal monthly installments during the period during which Employee is entitled to continuation of base salary under clause (i) of this Section 11.1; (iii) if Employee elects continued coverage under COBRA, pay Employee’s health insurance premiums for Employee and Employee’s family for a period of twelve months from the effective date of Employee’s termination of employment with the Company, to the same extent the Company paid those premiums at the time of termination; and (iv) accelerate the vesting of all of Employee’s stock options and other equity awards issued by the Company by a period of twelve months after the effective date of Employee’s termination of employment with the Company. Notwithstanding the foregoing, if Employee begins employment with another employer, the Company’s obligation to pay health insurance premiums pursuant to clause (iii) above shall terminate provided that Employee obtains health insurance coverage from such other employer comparable to the coverage provided by the Company at the time Employee’s employment at the Company terminated.

The timing of payment of the continued base salary pursuant to clause (i) above and the Target Bonus amounts pursuant to clause (ii) above are subject to any delay in payment required by the provisions of Section 11.4, if applicable. Except to the extent that payments may be delayed until the “Specified Employee Initial Payment Date” pursuant to Section 11.4, on the first regular payroll pay day following the effective date of the Release, the Company will pay Executive the severance benefits Executive would otherwise have received under the Agreement on or prior to such date but for the delay in payment related to the effectiveness of the Release, with the balance of the Severance Benefits being paid as originally

7

scheduled. All amounts payable under the Agreement will be subject to standard payroll taxes and deductions.

11.3 No Mitigation. Employee shall not be required to mitigate the amount of any payment provided for in this Section 11 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 11 be reduced by any compensation earned by Employee as the result of employment by another employer or self-employment or by retirement benefits.

11.4 Deferred Compensation and Section 409A. Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under this Agreement (the “Severance Benefits”) that constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with Employee’s termination of employment unless and until Employee has also incurred a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), unless the Company reasonably determines that such amounts may be provided to Employee without causing Employee to incur the additional 20% tax under Section 409A.

If Executive is, on the termination of service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the Severance Benefit payments shall be delayed until the earlier to occur of: (i) the date that is six months and one day after Executive’s Separation From Service, or (ii) the date of Executive’s death (such applicable date, the “Specified Employee Initial Payment Date”), the Company (or the successor entity thereto, as applicable) shall (A) pay to Executive a lump sum amount equal to the sum of the Severance Benefit payments that Executive would otherwise have received through the Specified Employee Initial Payment Date if the commencement of the payment of the Severance Benefits had not been so delayed pursuant to this Section and (B) commence paying the balance of the Severance Benefits in accordance with the applicable payment schedules set forth in this Agreement.

11.5 Parachute Payments. If any payment or benefit Employee would receive pursuant to a Change in Control from the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Employee’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order: reduction of cash payments; cancellation of accelerated vesting of stock options; reduction of employee benefits. In the event that acceleration of vesting of the stock options is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Employee’s stock options (i.e., earliest granted stock option cancelled last).

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12. Consulting After Termination.

12.1 Consulting Services. In exchange for the promises and covenants set forth herein, Employee and the Company agree that during the first twelve months that Employee receives severance pay from the Company hereunder (the “Consulting Period”), Employee shall serve as an independent contractor consultant, subject to the terms herein. During the Consulting Period, Employee shall be available for up to ten hours per month to consult with the Company in the areas of Employee’s expertise, as requested by the Company’s Chief Executive Officer. Employee’s consulting services shall be performed via telephone, computer communications, or facsimile unless Employee is specifically requested, with reasonable advance notice, to come to the Company’s premises; and Employee will not have an office on the Company’s premises during the Consulting Period. Any unvested stock option or other equity award then held by Employee shall cease to vest during the Consulting Period.

12.2 No Agency or Employment Relationship. During the Consulting Period, Employee will not be considered an agent or an employee of the Company; Employee will not have authority to make any representation, contract or commitment on behalf of the Company, and Employee agrees not to do so; and, except as provided in Section 11, Employee will not be entitled to any of the benefits which the Company may make available to its employees, such as group insurance, profit sharing, or retirement benefits.

12.3 Other Work Activities. During the Consulting Period, Employee may engage in employment, consulting or other work relationships in addition to Employee’s work for the Company. The Company agrees to make reasonable arrangements to enable Employee to perform Employee’s consulting services for the Company at such times and in such a manner so that it does not interfere with other work activities in which Employee may engage.

12.4 Consulting Information. Employee agrees to not to use or disclose any confidential or proprietary information of the Company which Employee obtains or develops in the course of performing Employee’s consulting services for the Company, without prior written authorization from a duly authorized representative of the Company.

13. Arbitration. The Company and Employee agree that any controversy or claim arising out of or relating to this Agreement or the Company’s employment of Employee (including, but not limited to claims arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the California Fair Employment and Housing Act, the California Labor Code, the California Constitution or any other federal, state or local statutes or common law) or any dispute arising out of the interpretation or application of this Agreement that the Company and Employee are unable to resolve shall be finally resolved and settled exclusively by arbitration in San Diego, California by a single arbitrator who is mutually selected by the Company and Employee. If the Company and Employee cannot agree upon an arbitrator, then each party shall choose its own independent representative and those independent representatives shall in turn choose the single arbitrator within 30 days of the date of the selection of the first independent representative.

14. Miscellaneous.

14.1 Entire Agreement. This Agreement together with the Inventions Agreement represent the Company’s and Employee’s entire understanding with respect to the subject matter contained herein and therein and supersedes the Prior Agreement and all other

9

previous understandings, written or oral between the Company and Employee concerning the subject matters of this Agreement and the Inventions Agreement. This Agreement may be amended or modified only with the signed written consent of both the Company and Employee. No oral waiver, amendment or modification shall be effective under any circumstances whatsoever.

14.2 Survival. The Inventions Agreement and Sections 7, 8, 9, 11, 12, 13 and 14 of this Agreement shall remain in effect after the termination of Employee’s employment by the Company, regardless of the reason the employment relationship ends.

14.3 Assignment and Binding Effect. This Agreement shall be binding upon and inure to the benefit of Employee and Employee’s heirs, executors, personal representatives, assigns, administrators and legal representatives. Because of the unique and personal nature of Employee’s duties under this Agreement, neither this Agreement nor any rights or obligations under this Agreement shall be assignable by Employee. This Agreement shall be binding upon and inure to the benefit of the Company and its successors, assigns and legal representatives.

14.4 Severability. Should any provisions of this Agreement be held by a court of law to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby.

14.5 Injunctive Relief. Employee recognizes that money damages alone would not adequately compensate the Company in event of any breach by Employee of Section 3, 7 or 8 or any provision of the Inventions Agreement. Therefore, Employee agrees that, in addition to all other remedies available to the Company at law, in equity, or otherwise, the Company shall be entitled to seek injunctive relief to restrain any breach of said Sections and to enforce the provisions hereof, without showing or proving any actual damage to the Company or posting any bond.

14.6 Non-Waiver. No failure by either party to insist upon strict compliance with any of the terms, covenants, or conditions hereof, and no delay or omission by either party in exercising any right under this Agreement, will operate as a waiver of such terms, covenants, conditions or rights. A waiver or consent given by a party on any one occasion is effective only in that instance and will not be construed as a bar to or waiver of any right on any other occasion.

14.7 Governing Law. Venue. This Agreement shall be governed in all respects by the laws of the United States of America and by the laws of the State of California. The parties agree that the venue for any dispute under this Agreement will be San Diego California, whether in a court of law or before an arbitrator, as provided herein. The Company and Employee severally recognize and consent to the jurisdiction over each of them by the courts of the state of California.

14.8 Notices. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon written verification of receipt; (iii) by telecopy or facsimile transmission upon acknowledgment of receipt of electronic transmission; or (iv) by certified or registered mail, return receipt requested, upon verification of receipt. Notices to Employee shall be sent to the last known address in the Company’s records or such other address as Employee may specify in writing. Notices to the Company shall be

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sent to the Company’s Chief Financial Officer or to such other representative of the Company as the Company may specify in writing.

14.9 Advertising Waiver. Employee agrees to permit the Company and its affiliates, and persons or other organizations authorized by the Company or any of its affiliates, to use, publish and distribute advertising or sales promotional literature concerning the products or services of the Company or any of its affiliates, or the machinery and equipment used in the provision thereof, in which Employee’s name or pictures of Employee taken in the course of Employee’s provision of services to the Company or any of its affiliates, appear. Employee hereby waives and releases any claim or right Employee may otherwise have arising out of such use, publication or distribution.

BY PLACING MY SIGNATURE HEREUNDER, I ACKNOWLEDGE THAT I HAVE READ ALL THE PROVISIONS OF THIS AGREEMENT AND THAT I AGREE TO ALL OF ITS TERMS.

	EMPLOYEE:
Date: December 15, 2008	/s/ Harry Stylli
	Harry Stylli

Accepted:
Date: December 1, 2008	SEQUENOM, INC.
	By:	/s/ Harry F. Hixson
		Harry F. Hixson Chairman of the Board of Directors

11

SEQUENOM INC.

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

EXHIBIT A

RELEASE AND WAIVER OF CLAIMS

I understand and agree completely to the terms set forth in the Amended and Restated Employment Agreement, dated                     , 2008 to which this form is attached (the “Agreement”). I understand that this release and waiver (the “Release”), together with the Agreement, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the Agreement. I am not relying on any promise or representation by the Company that is not expressly stated herein.

In consideration of and except for the benefits I will receive under the Agreement, I hereby generally and completely release the Company and its directors, officers, employees, shareholders, members, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing this Release. This Release includes, but is not limited to: (1) all claims arising out of or in any way related to my employment with the Company or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including, but not limited to, salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including, but not limited to, claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including, but not limited to, claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act (as amended).

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA. I also acknowledge that the consideration given under the Release for the waiver and release in the preceding paragraph hereof is in addition to anything of value to which I was already entitled. I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (A) my waiver and release do not apply to any rights or claims that may arise on or after the date I execute this Release; (B) I should consult with an attorney prior to executing this Release; (C) I have twenty-one (21) days to consider this Release (although I may choose to voluntarily execute this Release earlier); (D) I have seven (7) days following my execution of this Release to revoke the Release; and (E) this Release shall not be effective until the date upon which the revocation period has expired, which shall be the eighth (8^th) day after I execute this Release.

I represent that I have not filed any claims against the Company, and agree that, except as such waiver may be prohibited by statute, I will not file any claim against the Company or seek any compensation for any claim other than the payments and benefits referenced herein. I agree to indemnify and hold the Company harmless from and against any and all loss, cost, and expense, including, but not limited to court costs and attorney’s fees, arising from or in connection with any action which may be commenced, prosecuted, or threatened by me or for my benefit, upon my initiative, or with my aid or approval, contrary to the provisions of this Release.

I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to my release of any claims I may have against the Company, its affiliates, and the entities and persons specified above.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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This release is not intended to release any continuing obligations of the Company to me, if any, under any written employment agreement that I may have with the Company.

Date:	By:
		Harry Stylli

EX-10.51

Exhibit 10.51

SEQUENOM, INC.

NON-EMPLOYEE DIRECTOR

COMPENSATION POLICY

The Board of Directors (the “Board”) of Sequenom, Inc. (the “Company”) and the Nominating and Corporate Governance Committee of the Board adopted the following compensation program for non-employee directors of the Board. Pursuant to this program, each member of the Board who is not an employee or an officer of the Company will receive the following compensation for Board services, as applicable:

• a $25,000 annual retainer for service as a Board member;

• a $20,000 supplemental annual retainer for service as Chairman of the Board;

• a $12,000 supplemental annual retainer for service as Chairman of the Audit Committee;

• a $8,000 supplemental annual retainer for service as Chairman of the Compensation Committee;

• a $5,000 supplemental annual retainer for service as Chairman of the Nominating and Corporate Governance Committee;

At the election of each non-employee director of our Board made prior to the commencement of a fiscal year, all or a specific percentage of the annual retainer for such year may be payable in either cash, nonqualified stock options to purchase shares of the Company’s common stock, restricted shares of common stock or restricted stock unit awards. In the event that the election is made to receive a nonqualified stock option, restricted stock, or restricted stock unit award in lieu of all or a portion of such cash compensation, such nonstatutory stock option, restricted stock or restricted stock unit award will be granted pursuant to the Company’s 2006 Equity Incentive Plan, or any successor plan. The grant date of each such nonstatutory stock option, restricted stock or restricted stock unit award will be the first trading day of the fiscal year for which such election is made and each award will vest in four equal quarterly installments on the last day of each quarter of the fiscal year for which such election is made, subject to such director’s continued service as a member of the Board through the applicable vesting dates.

The exercise price per share of each nonstatutory stock option shall be equal to the fair market value of a share of the Company’s common stock on the grant date and will be exercisable for the number of shares of the Company’s common stock equal to a Black-Scholes value of such nonstatutory stock option divided into the amount of the annual retainer for which an election to receive a nonstatutory stock option is made. Such calculation will be performed with the applicable inputs as if such calculation were performed on the first trading day of the December that precedes the fiscal year for which the election is made. In the event that an election is made for restricted stock or restricted stock unit awards, the number of restricted stock or restricted stock unit awards granted will be determined using the average daily closing sales price per share as reported on the Nasdaq Global Market for the month of November that precedes the fiscal year for which the election is made, divided into the portion of the annual retainer for which an election to receive the restricted stock or restricted stock unit award is made.

Members of our Board will also be paid $1,500 and $1,000 in cash for attending special meetings in person or telephonically, respectively. For attending special meetings of committees of the Board, members of each committee will receive $1,000 in cash.

Additionally, members of the Board who are not employees or officers of the Company receive a nonqualified stock option to purchase 40,000 shares of the Company’s common stock on the date of their election to the Board and also receive an annual nonqualified stock option to purchase 20,000 additional shares of the Company’s common stock at the annual stockholders meeting.

EX-10.52

EXHIBIT 10.52

SEQUENOM, INC.

AMENDED AND RESTATED

CHANGE IN CONTROL SEVERANCE BENEFIT PLAN

Section 1. INTRODUCTION.

The Sequenom, Inc. Amended and Restated Change in Control Severance Benefit Plan (the “Plan”) was originally established effective October 11, 2007 (the “Adoption Date”) and is hereby amended and restated in its entirety effective as of February 9, 2009. The purpose of the Plan is to provide severance benefits to certain eligible employees of the Company and its Affiliates upon selected terminations of service in connection with a Change in Control (as defined below).

This Plan shall continue to supersede the Change in Control Severance Benefit Plan established effective April 28, 2005 and any generally applicable change in control severance plan, policy, or practice, whether written or unwritten, with respect to each employee who becomes a Participant in the Plan. For the purposes of the foregoing sentence, a “generally applicable change in control severance plan, policy or practice” is a plan, policy or practice in which benefits are not conditioned upon (i) being expressly designated a participant, (ii) receiving an award such as a stock option, or (iii) the employee expressly electing to participate. In consideration for the benefits set forth in this Plan, this Plan shall also supersede and replace the change in control severance benefits in any individually negotiated employment contract or agreement, or any written plans that are not of general application, and, except as set forth in the Participation Notice (as defined below), each Participant’s change in control severance benefits shall be governed solely by the terms of this Plan.

This Plan document is also the Summary Plan Description for the Plan.

Section 2. DEFINITIONS.

The following shall be defined terms for purposes of the Plan:

(a) “Affiliate” means a Parent Corporation or a Subsidiary Corporation.

(b) “Base Salary” means a Participant’s monthly base salary in effect immediately prior to the Covered Termination and prior to any reduction in base salary that would permit such Participant to voluntarily terminate employment for Good Reason (as defined below) (including without limitation any compensation that is deferred by Participant into a Company-sponsored retirement or deferred compensation plan, exclusive of any employer matching contributions by the Company associated with any such retirement or deferred compensation plan and exclusive of any other Company contributions) and excludes all bonuses, commissions, expatriate premiums, fringe benefits (including without limitation car allowances), option grants, equity awards, employee benefits and other similar items of compensation.

(c) “Board” means the Board of Directors of the Company.

1.

(d) “Cash Severance Benefits Period” means 24 months for a Tier I Participant and 12 months for all other Participants.

(e) “Cash Severance Benefits Reduction Period” means the 19^th through the 24^th month following the Covered Termination of a Tier I Participant.

(f) “Cause” means, with respect to a Participant, the occurrence of one or more of the following:

(1) Such Participant’s conviction of, or plea of guilty or no contest with respect to, (i) any crime involving fraud, dishonesty or moral turpitude, or (ii) any felony under the laws of the United States or any state thereof;

(2) Such Participant’s commission of, or attempted commission of, or participation in, a fraud or act of dishonesty against the Company that results in (or might reasonably result in) material harm to the Company;

(3) Such Participant’s intentional and material violation of any statutory duty owed to the Company;

(4) Such Participant’s unauthorized use or disclosure of the Company’s material confidential information, material trade secrets or material proprietary information;

(5) Such Participant’s intentional and material violation of a written policy or rule of the Company or intentional violation of a fiduciary duty to the Company; or

(6) Any other definition of “Cause” (or a similar term) set forth in such Participant’s written agreement governing his or her employment by the Company or the termination of such employment that, if met, would allow the Company to terminate such Participant’s employment without the obligation to provide Participant with specified severance benefits or payments.

(g) “Change in Control” means the occurrence of any of the following events prior to the automatic termination of this Plan as provided in Section 6(b):

(1) The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if more than 50% of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such merger, consolidation or other reorganization is not owned by persons who were stockholders of the Company immediately prior to such merger, consolidation or other reorganization, in substantially the same relative proportions as their ownership of the combined voting power of the Company immediately prior to such merger, consolidation or other reorganization;

(2) There is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Company, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company to an

2.

entity, more than 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition;

(3) When a majority of the incumbent directors on the Board are replaced by new directors within any 18-month period; provided, however, that each director (i) whose election has been approved by a vote of at least a majority of the directors who were either incumbent directors at the beginning of the period or elected or nominated in accordance with clause (i) or (ii) of this Section 2(f)(3) during such period or (ii) whose nomination for election by the Company’s stockholders has been approved by a committee of the Board, a majority of whose members are directors who were either incumbent directors at the beginning of the period or elected or nominated in accordance with clause (i) or (ii) of this Section 2(f)(3) during such period shall be deemed to be an “incumbent director” and not a “new director” for purposes of this Section 2(f)(3); or

(4) Any “person” that (as such term is used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) by the acquisition or aggregation of securities is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities ordinarily (and apart from rights accruing under special circumstances) having the right to vote at elections of directors (the “Base Capital Stock”); except that any change in the relative beneficial ownership of the Company’s securities by any person resulting solely from a reduction in the aggregate number of outstanding shares of Base Capital Stock, and any decrease thereafter in such person’s ownership of securities, shall be disregarded until such person increases in any manner, directly or indirectly, such person’s beneficial ownership of any securities of the Company.

The term “Change in Control” shall not include a transaction, the sole purpose of which is to change the state of the Company’s incorporation.

(h) “Company” means Sequenom, Inc. or, following a Change in Control, the surviving entity resulting from such transaction or the parent company of such surviving entity.

(i) “Compensation Committee” means the Compensation Committee of the Board.

(j) “Covered Termination” means, with respect to a Participant who immediately prior to a termination of employment was an employee of the Company, such Participant’s termination of employment by the Company without Cause or a voluntary resignation of employment by the Participant for Good Reason; either of which occurring within the one-month period ending on the date of a Change in Control or 11-month period following a Change in Control.

(k) “Good Reason” means, with respect to a Participant, the occurrence of one or more of the following events, if applicable, without such Participant’s express written consent:

3.

(1) A material reduction in such Participant’s authority, duties or responsibilities (and not simply a change in title or reporting relationships;

(2) A material reduction by the Company in such Participant’s Base Salary;

(3) A material adverse change by the Company to Participant’s Target Bonus or to the criteria, milestones or objectives related to such Participant’s Target Bonus that is reasonably likely to result in the Participant earning materially less than his or her Target Bonus during the subsequent applicable period;

(4) A material relocation of the Participant’s principal place of work to a location that would increase the Participant’s one-way commute from his or her personal residence to the new principal place of work by more than 20 miles.

Notwithstanding the foregoing, a Participant shall have “Good Reason” for his or her resignation only if: (a) the Participant notifies the Company in writing, within 30 days after the occurrence of one of the foregoing events specifying the event(s) constituting Good Reason, that he or she intends to terminate his or her employment no earlier than 30 days after providing such notice; (b) the Company does not cure such condition within 30 days following its receipt of such notice or states unequivocally in writing that it does not intend to attempt to cure such condition; and (c) the Participant resigns from employment within 30 days following the end of the period within which the Company was entitled to remedy the condition constituting Good Reason but failed to do so.

(l) “Health Severance Benefits Period” means 18 months for a Tier I Participant and 12 months for all other Participants.

(m) “Parent Corporation” means any corporation (other than the Company) in an unbroken ownership chain of corporations ending with the Company, provided each corporation in the unbroken ownership chain (other than the Company) owns, at the time of the determination, stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such ownership chain.

(n) “Participant” means an individual who (i) is employed by the Company or its Affiliates, (ii) has been designated eligible to participate in the Plan by the Plan Administrator in its sole discretion (either by a specific designation or by virtue of being a member of a class of employees who have been so designated) and (iii) who has received a Participation Notice from the Company and elected to participate in the Plan by executing and returning such Participation Notice to the Company within the time period set forth therein. The Participation Notice shall designate the Participant as either a “Tier I Participant”, “Tier II Participant” or “Tier III Participant”; provided that, in the absence of such specific designation, the Participant shall be deemed a Tier III Participant for purposes of the Plan. The determination of whether an employee is eligible to be a Participant and the designation of either a Tier I Participant, Tier II Participant or Tier III Participant, shall be made by the Plan Administrator, in its sole discretion, and such determination shall be binding and conclusive on all persons.

4.

(o) “Participation Notice” means the latest notice delivered by the Company to a Participant substantially in the form of Exhibit A hereto or such other form as may be approved by the Plan Administrator.

(p) “Payment Commencement Date” means, with respect to a Participant, (i) if such Covered Termination occurs prior to the applicable Change in Control, the later of (A) such Change in Control or (B) the effective date of the Release (as defined below) or (ii) if such Covered Termination occurs on or after the applicable Change in Control, the later of (X) the date of such Covered Termination or (Y) the effective date of the Release.

(q) “Plan Administrator” means the Compensation Committee.

(r) “Qualified Plan” means a plan sponsored by the Company or an Affiliate that is intended to be qualified under Section 401(a) of the Internal Revenue Code.

(s) “Subsidiary Corporation” means any corporation (other than the Company) in an unbroken ownership chain of corporations beginning with the Company, provided each corporation (other than the last corporation) in the unbroken ownership chain owns, at the time of the determination, stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such ownership chain.

(t) “Target Bonus” means the target bonus (i.e., the annual bonus amount payable to a Participant in cash, common stock or other property if exactly 100% of all performance goals are achieved) most recently approved by the Compensation Committee or the Board for such Participant prior to the earlier of (i) the Payment Commencement Date and (ii) any reduction in Target Bonus that would permit such Participant to voluntarily terminate employment for Good Reason.

(u) “Vesting Acceleration Benefit” means (i) the remainder of all vesting installments, whether time-based or performance-based, for a Tier I Participant, (ii) the remainder of all time-based vesting installments following the Covered Termination for a Tier II Participant and (iii) the next 24 monthly time-based vesting installments following the Covered Termination for a Tier III Participant.

The following additional terms are defined in the Section identified below:

TERM	SECTION
“Adoption Date”	1
“COBRA”	4	(a)(3)
“Code”	4	(d)
“ERISA”	9
“Excise Tax”	5	(d)
“Payment”	5	(d)
“Plan”	1

5.

TERM	SECTION
“Plan Sponsor”	12	(d)
“Reduced Amount”	5	(d)
“Release”	3

Section 3. ELIGIBILITY FOR BENEFITS.

Subject to the requirements set forth in this Section, the Company shall provide change in control severance benefits under the Plan to the Participants. In order to be eligible to receive benefits under the Plan, a Participant must (i) experience a Covered Termination and (ii) execute a general waiver and release (the “Release”) in substantially the form attached hereto as Exhibit B, Exhibit C, or Exhibit D, as appropriate (or as then may be required by law to effect a release of claims), and such Release must become effective in accordance with its terms; provided, however, that no such Release shall require the Participant to forego any unpaid salary, any accrued but unpaid vacation pay or any benefits payable pursuant to this Plan. With respect to any outstanding option held by the Participant, no provision set forth in this Plan granting the Participant additional rights to exercise the option can be exercised unless and until the Release becomes effective.

The Participant must execute the Release within the time period set forth therein, but in no event later than (x) if a Change in Control shall have occurred prior to such Covered Termination, 45 days following termination of employment or (y) if a Change in Control shall not have occurred prior to such Covered Termination, the later of (A) 45 days following termination of employment or (B) ten days following such Change in Control, and such release must become effective in accordance with its terms.

Unless a Change in Control has occurred, the Plan Administrator, in its sole discretion, may modify the form of the required Release to comply with applicable law and shall determine the form of the required Release, which may be incorporated into a termination agreement or other agreement with the Participant; provided, that, after a Change in Control occurs, the Plan Administrator may modify the form of required Release only if necessary to comply with applicable law.

Section 4. AMOUNT OF BENEFIT.

(a) Subject to the limitations and reductions provided in this Plan, benefits under this Plan, if any, shall be provided to the Participants described in Section 3 in the following amounts. Effective commencing with the Payment Commencement Date, such Participant shall receive the following severance package:

(1) Cash Severance Benefits. At the end of each month during the Cash Severance Benefit Period, which shall commence with the first full month following the Payment Commencement Date, the Participant shall receive a payment in an amount equal to the Participant’s Base Salary.

6.

(2) Bonus Severance Benefits. The Company shall make a cash severance payment to the Participant in an amount equal to a percentage of such Participant’s Target Bonus as set forth in the following table:

Tier	Percentage of Target Bonus
I	150%
II	100%
III	0%

Any such bonus payment pursuant to this Section 4(a)(2) shall be in a single lump sum to be paid within 10 days following the Payment Commencement Date.

(3) COBRA Benefits. If such Participant timely elects to continue coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), then during the Health Severance Benefits Period, the Company will (i) pay all premiums for group medical, dental and vision coverage elected by such Participant for the Participant and his or her eligible dependents under (A) COBRA and, to the extent applicable, any similar applicable state statute, and (B) to the extent that such coverage under COBRA and any such applicable state statute has been exhausted or is no longer available, then under any individual policy providing group medical, dental and vision benefits substantially similar to those provided to Participant immediately prior to his or her termination of Service, and (ii) if Participant is eligible for benefits under the Exec-U-Care plan, reimburse all other out-of-pocket costs associated with Participant’s participation in such plan. In addition, if Participant does not timely elect to continue coverage group medical, dental or vision coverage under COBRA, then the Company will pay Participant in a lump sum the equivalent cash value of the COBRA payments that otherwise would have been made pursuant to this Section 4(a)(3). Such payment shall be made within 30 days following the expiration date of the COBRA election period. For purposes of this Section 4(a)(3), references to COBRA premiums shall not include any amounts payable by the Participant under an Internal Revenue Code Section 125 health care reimbursement plan. Notwithstanding the foregoing, no such premium payments (or any other payments for health, dental, or vision coverage by the Company) shall be made following the Participant’s death or the effective date of the Participant’s coverage by a health, dental, or vision insurance plan of a subsequent employer.

(4) Equity Award Acceleration. The vesting and exercisability of all outstanding options to purchase the Company’s common stock issued pursuant to any equity incentive plan of the Company or any Affiliate that are then held by the Participant on such date shall be accelerated to the extent applicable so that the Participant shall receive the Vesting Acceleration Benefit, any reacquisition or repurchase rights held by the Company in respect of common stock issued pursuant to any other stock award granted to the Participant by the Company shall lapse so that the Participant shall receive the Vesting Acceleration Benefit, and the vesting of any other stock awards granted to the Participant by the Company, and any issuance of shares triggered by the vesting of such stock awards, shall be accelerated so that the

7.

Participant shall receive the Vesting Acceleration Benefit. If the Covered Termination occurs prior to the applicable Change in Control, such vesting acceleration shall be deemed effective as of the date of the Covered Termination. Notwithstanding the foregoing, this Section 4(a)(4) shall not apply to stock awards issued under or held in any Qualified Plan. Notwithstanding the provisions of this Section 4(a)(4), in the event that the provisions of this Section 4(a)(4) regarding acceleration of vesting of an option would adversely affect a Participant’s option (including, without limitation, its status as an incentive stock option under Section 422 of the Code) that is outstanding on the date the Participant commences participation in the Plan, such acceleration of vesting shall be deemed null and void as to such option unless the affected Participant consents in writing to such acceleration of vesting as to such option at the time he or she becomes a Participant.

(b) Certain Reductions. Notwithstanding any other provision of the Plan to the contrary, any benefits payable to a Participant under Sections 4(a)(1) and 4(a)(2) of this Plan shall not be reduced by any severance benefits payable by the Company or an affiliate of the Company to such Participant under any contract or agreement (including an employment agreement) between such Participant and the Company, covering such Participant; provided, however, that this Plan shall supersede and replace the change in control severance benefits in any individually negotiated employment contract or agreement, or any written plans, and, except as set forth in the Participation Notice, each Participant’s change in control severance benefits shall be governed by the terms of this Plan.

(c) Mitigation. If, during a Tier I Participant’s Cash Severance Benefits Period, such Tier I Participant begins full-time employment with another employer, then (i) the amount payable by the Company to the Tier I Participant pursuant to Section 4(a)(1) above during the Cash Severance Benefits Reduction Period shall be reduced by the amount of any compensation paid to (or payable to) the Participant from such other employer during the Cash Severance Benefits Period (but in any case such amount payable by the Company during the Cash Severance Benefits Reduction Period shall not be reduced below zero).

(d) Application of Section 409A. Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under this Plan (the “Severance Benefits”) that constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with Participant’s termination of employment unless and until Participant has also incurred a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), unless the Company reasonably determines that such amounts may be provided to Participant without causing Participant to incur the additional 20% tax under Section 409A.

It is intended that each installment of the Severance Benefits payments provided for in this Plan is a separate “payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). For the avoidance of doubt, it is intended that payments of the Severance Benefits set forth in this Plan satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9). However, if the Company (or, if applicable, the successor entity thereto) determines that

8.

the Severance Benefits constitute “deferred compensation” under Section 409A and Participant is, on the termination of Participant’s service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the Severance Benefit payments shall be delayed until the earlier to occur of: (i) the date that is six months and one day after Participant’s Separation From Service”) or (ii) the date of Participant’s death (such applicable date, the “Specified Employee Initial Payment Date”), the Company (or the successor entity thereto, as applicable) shall (A) pay to Participant a lump sum amount equal to the sum of the Severance Benefit payments that Participant would otherwise have received through the Specified Employee Initial Payment Date if the commencement of the payment of the Severance Benefits had not been so delayed pursuant to this Section and (B) commence paying the balance of the Severance Benefits in accordance with the applicable payment schedules set forth in this Plan.

(e) Withholding. All payments under the Plan will be subject to all applicable withholding obligations of the Company, including, without limitation, obligations to withhold for federal, state and local income and employment taxes.

Section 5. LIMITATIONS ON BENEFITS.

(a) Termination of Benefits. Benefits under the Plan shall terminate immediately if the Participant, at any time, (i) engages in the unauthorized use or disclosure of the Company’s material confidential information, material trade secrets or material proprietary information under any written agreement under which the Participant has such an obligation to the Company that survives the Participant’s termination of service to the Company, (ii) engages in any prohibited or unauthorized competitive activities, or prohibited or unauthorized solicitation or recruitment of employees, in violation of any written agreement under which Participant has such an obligation to the Company that survives the Participant’s termination of service to the Company; (iii) violates any material term or condition of this Plan, or (iv) violates any term of the Release.

(b) Non-Duplication of Benefits. No Participant is eligible to receive benefits under this Plan more than one time.

(c) Indebtedness of Participants. To the extent permitted by law, if a Participant is indebted to the Company or an affiliate of the Company on the date of his or her termination of employment or service, the Company reserves the right to offset any severance benefits payable in cash under the Plan by the amount of such indebtedness. A Participant may be required to execute an agreement to such effect if requested by the Company.

(d) Parachute Payments. If any payment or benefit a Participant would receive in connection with a Change in Control from the Company or otherwise (a “Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion of the Payment, up to and

9.

including the total Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Participant’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order: reduction of cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits. If acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of the Participant’s stock awards.

The Company shall appoint a nationally recognized accounting or consulting firm to make the determinations required hereunder, which accounting firm shall not then be serving as accountant or auditor for the individual, entity or group that effected the Change in Control. The Company shall bear all expenses with respect to the determinations by such accounting or consulting firm required to be made hereunder.

The accounting or consulting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and the Participant within 10 calendar days after the date on which the Participant’s right to a Payment is triggered (if requested at that time by the Company or the Participant) or such other time as requested by the Company or the Participant. If the accounting or consulting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it shall furnish the Company and the Participant with an opinion reasonably acceptable to the Participant that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and the Participant.

Section 6. RIGHT TO INTERPRET PLAN; AMENDMENT AND TERMINATION.

(a) Exclusive Discretion. The Plan Administrator shall have the exclusive discretion and authority to establish rules, forms, and procedures for the administration of the Plan and to construe and interpret the Plan and to decide any and all questions of fact, interpretation, definition, computation or administration arising in connection with the operation of the Plan, including, but not limited to, the eligibility to participate in the Plan and amount of benefits paid under the Plan. The rules, interpretations, computations and other actions of the Plan Administrator shall be binding and conclusive on all persons. Unless otherwise determined by the Compensation Committee or the Board, the Chairman of the Compensation Committee (or the Chairman’s designee) shall perform the duties of the Plan Administrator under this Plan.

(b) Change of State of Incorporation, Amendment or Termination. The Board reserves the right to change the state of incorporation, and the Board and the Compensation Committee reserve the right to amend or terminate this Plan or the benefits provided hereunder at any time; provided, however, that no such change of state, amendment or termination shall impair or reduce the rights of a Participant unless such Participant consents to such amendment or termination of the Plan in writing. Notwithstanding the foregoing, the Plan shall automatically terminate on the tenth anniversary from the Adoption Date, unless extended

10.

by the Board or the Compensation Committee. Any action amending, terminating or extending the Plan shall be in writing and executed by the Board or the Compensation Committee.

Section 7. CONTINUATION OF CERTAIN EMPLOYEE BENEFITS.

(a) COBRA Continuation. Each Participant who is enrolled in a group medical, dental or vision plan sponsored by the Company or an affiliate of the Company may be eligible to continue coverage under such group medical, dental or vision plan (or to convert to an individual policy), at the time of the Participant’s termination of employment under COBRA. The Company will notify the Participant of any such right to continue group medical coverage at the time of termination. No provision of this Plan will affect the continuation coverage rules under COBRA. Therefore, the period during which a Participant may elect to continue the Company’s group medical, dental or vision coverage at his or her own expense under COBRA, the length of time during which COBRA coverage will be made available to the Participant, and all other rights and obligations of the Participant under COBRA will be applied in the same manner that such rules would apply in the absence of this Plan. At the conclusion of the COBRA premium reimbursements made by the Company, if any, the Participant will be responsible for the entire payment of premiums required under COBRA for the duration, if any, of the COBRA period.

(b) Other Employee Benefits. All non-health benefits (such as life insurance, AD&D, disability and 401(k) plan coverage) terminate as of an employee’s termination date (except to the extent that a conversion privilege may be available thereunder).

Section 8. NO IMPLIED EMPLOYMENT CONTRACT.

The Plan shall not be deemed (i) to give any employee or other person any right to be retained in the employ or service of the Company or (ii) to interfere with the right of the Company to discharge any employee or other person at any time and for any reason, which right is hereby reserved.

Section 9. LEGAL CONSTRUCTION.

This Plan is intended to be governed by and shall be construed in accordance with the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and, to the extent not preempted by ERISA, the laws of the State of California.

Section 10. CLAIMS, INQUIRIES AND APPEALS.

(a) Applications for Benefits and Inquiries. Any application for benefits, inquiries about the Plan or inquiries about present or future rights under the Plan must be submitted to the Plan Administrator in writing by an applicant (or his or her authorized representative). The Plan Administrator is:

Compensation Committee

Attn: Chairman

11.

c/o Sequenom, Inc.

3595 John Hopkins Court

San Diego, CA 92121-1331

(b) Denial of Claims. In the event that any application for benefits is denied in whole or in part, the Plan Administrator must provide the applicant with written or electronic notice of the denial of the application, and of the applicant’s right to review the denial. Any electronic notice will comply with the regulations of the U.S. Department of Labor. The written notice of denial will be set forth in a manner designed to be understood by the employee and will include the following:

(1) the specific reason or reasons for the denial;

(2) references to the specific Plan provisions upon which the denial is based;

(3) a description of any additional information or material that the Plan Administrator needs to complete the review and an explanation of why such information or material is necessary; and

(4) an explanation of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the applicant’s right to bring a civil action under section 502(a) of ERISA following a denial on review of the claim, as described in Section 10(d) below.

This written notice will be given to the applicant within 90 days after the Plan Administrator receives the application, unless special circumstances require an extension of time, in which case, the Plan Administrator has up to an additional 90 days for processing the application. If an extension of time for processing is required, written notice of the extension will be furnished to the applicant before the end of the initial 90-day period.

This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the application.

(c) Request for a Review. Any person (or that person’s authorized representative) for whom an application for benefits is denied, in whole or in part, may appeal the denial by submitting a request for a review to the Plan Administrator within 60 days after the application is denied. A request for a review shall be in writing and shall be addressed to:

Compensation Committee

Attn: Chairman

c/o Sequenom, Inc.

3595 John Hopkins Court

San Diego, CA 92121-1331

A request for review must set forth all of the grounds on which it is based, all facts in support of the request and any other matters that the applicant feels are pertinent. The

12.

applicant (or his or her representative) shall have the opportunity to submit (or the Plan Administrator may require the applicant to submit) written comments, documents, records, and other information relating to his or her claim. The applicant (or his or her representative) shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his or her claim. The review shall take into account all comments, documents, records and other information submitted by the applicant (or his or her representative) relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

(d) Decision on Review. The Plan Administrator will act on each request for review within 60 days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional 60 days), for processing the request for a review. If an extension for review is required, written notice of the extension will be furnished to the applicant within the initial 60 day period. This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the review. The Plan Administrator will give prompt, written or electronic notice of its decision to the applicant. Any electronic notice will comply with the regulations of the U.S. Department of Labor. In the event that the Plan Administrator confirms the denial of the application for benefits in whole or in part, the notice will set forth, in a manner calculated to be understood by the applicant, the following:

(1) the specific reason or reasons for the denial;

(2) references to the specific Plan provisions upon which the denial is based;

(3) a statement that the applicant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his or her claim; and

(4) a statement of the applicant’s right to bring a civil action under section 502(a) of ERISA.

(e) Rules and Procedures. The Plan Administrator will establish rules and procedures, consistent with the Plan and with ERISA, as necessary and appropriate in carrying out its responsibilities in reviewing benefit claims. The Plan Administrator may require an applicant who wishes to submit additional information in connection with an appeal from the denial of benefits to do so at the applicant’s own expense.

(f) Exhaustion of Remedies. No legal action for benefits under the Plan may be brought until the claimant (i) has submitted a written application for benefits in accordance with the procedures described by Section 10(a) above, (ii) has been notified by the Plan Administrator that the application is denied, (iii) has filed a written request for a review of the application in accordance with the appeal procedure described in Section 10(c) above, and (iv) has been notified in writing that the Plan Administrator has denied the appeal. Notwithstanding the foregoing, if the Plan Administrator does not respond to a Participant’s

13.

claim or appeal within the relevant time limits specified in this Section 10, then the Participant may bring legal action for benefits under the Plan pursuant to Section 502(a) of ERISA.

Section 11. BASIS OF PAYMENTS TO AND FROM PLAN.

All benefits under the Plan shall be paid by the Company. The Plan shall be unfunded, and benefits hereunder shall be paid only from the general assets of the Company. A Participant’s right to receive payments under the Plan is no greater than that of the Company’s unsecured general creditors. Therefore, if the Company were to become insolvent, the Participant might not receive benefits under the Plan.

Section 12. OTHER PLAN INFORMATION.

(a) Employer and Plan Identification Numbers. The Employer Identification Number assigned to the Company (which is the “Plan Sponsor” as that term is used in ERISA) by the Internal Revenue Service is 77-036-5889. The Plan Number assigned to the Plan by the Plan Sponsor pursuant to the instructions of the Internal Revenue Service is 502.

(b) Ending Date for Plan’s Fiscal Year. The date of the end of the fiscal year for the purpose of maintaining the Plan’s records is December 31.

(c) Agent for the Service of Legal Process. The agent for the service of legal process with respect to the Plan is Sequenom, Inc., Attn: Chief Financial Officer, 3595 John Hopkins Court, San Diego, CA 92121-1331.

(d) Plan Sponsor and Plan Administrator. The “Plan Sponsor” of the Plan is Sequenom, Inc., 3595 John Hopkins Court, San Diego, CA 92121-1331. The Plan Sponsor’s and Plan Administrator’s telephone number is (858) 202-9000. The Plan Administrator is the named fiduciary charged with the responsibility for administering the Plan.

(e) Type of Plan. The Plan is a welfare benefit plan.

Section 13. STATEMENT OF ERISA RIGHTS.

Participants in this Plan (which is a welfare benefit plan sponsored by the Company) are entitled to certain rights and protections under ERISA. If you are a Participant in the Plan, under ERISA you are entitled to:

Receive Information about the Plan and Your Benefits

(a) Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as work sites, all documents governing the Plan and a copy of the latest annual report (Form 5500 Series) filed by the Plan Administrator with the U.S. Department of Labor and available at the Public Disclosure Room of the Pension and Welfare Benefit Administration;

14.

(b) Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan and copies of the latest annual report (Form 5500 Series). The Plan Administrator may make a reasonable charge for the copies; and

(c) Receive a summary of the Plan’s annual financial report. The Plan Administrator is required by law to furnish each Participant with a copy of this summary annual report.

Prudent Actions by Plan Fiduciaries

In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries.

Enforce Your rights

No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a Plan benefit or exercising your rights under ERISA.

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of Plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.

If you have a claim for benefits that is denied or ignored, in whole or in part, you may file suit in a state or Federal court. In addition, if you disagree with the Plan Administrator’s decision or lack thereof concerning the qualified status of a domestic relations order or a medical child support order, you may file suit in Federal court.

If it should happen that the Plan fiduciaries misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

Assistance with Your Questions

If you have any questions about the Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution

15.

Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration or accessing its website at http://www.dol.gov/ebsa/.

Section 14. SUCCESSORS AND ASSIGNS.

This Plan shall be binding upon any surviving entity resulting from a Change in Control and upon any other person who is a successor by merger, acquisition, consolidation or otherwise to the business formerly carried on by the Company without regard to whether or not such person actively adopts or formally continues the Plan. Participants, to the extent they are otherwise eligible for benefits under the Plan, are intended third party beneficiaries of this provision.

Section 15. EXECUTION.

To record the adoption of the amendment and restatement of the Plan as set forth herein, Sequenom, Inc. has caused its duly authorized officer to execute the same this 9th day of February 2009.

SEQUENOM, INC.

/s/ Harry Stylli

Harry Stylli

President and Chief Executive Officer

16.

EXHIBIT A

SEQUENOM, INC.

CHANGE IN CONTROL SEVERANCE BENEFIT PLAN

PARTICIPATION NOTICE

To:                                                                     

Date:                                                                 

Deadline to Return Participation Notice:                                                                     

Sequenom, Inc. (the “Company”) has adopted the Change in Control Severance Benefit Plan (the “Plan”). The Company is providing you with this Participation Notice to inform you that you have been designated as a Participant in the Plan.

A copy of the Plan document is attached to this Participation Notice. The terms and conditions of your participation in the Plan are as set forth in the Plan and this Participation Notice, which together also constitute a summary plan description of the Plan.

In consideration for the benefits set forth in the Plan, each Participant’s severance benefits shall be governed by the terms of the Plan and the Plan shall supersede and replace any individually negotiated employment contract or agreement and all severance or change in control benefits payable to you as set forth in any agreement, including offer letters, with the Company entered into prior to the date hereof [including ______________________.]

Notwithstanding the terms of the Plan:

If you choose to participate in the Plan, please return to [            ] a copy of this Participation Notice and attached Acknowledgement signed by you and retain a copy of this Participation Notice and attached Acknowledgement, along with the Plan document, for your records. Please note that you are not a Participant in the Plan until you execute and return this Participation Notice and attached Acknowledgement to the Company no later than [            ].

SEQUENOM, INC.
By:
	Participant
Its:
	Print Name

17.

ACKNOWLEDGEMENT

The undersigned Participant hereby acknowledges receipt of the foregoing Participation Notice. In the event the undersigned holds outstanding stock options or restricted stock unit awards as of the date of this Participation Notice, the undersigned hereby:^*

¨ accepts all of the benefits of Section 4(a)(4) of the Plan regardless of any potential adverse effects on any outstanding option or other stock award

¨ accepts the benefits of Sections 4(a)(4) of the Plan that have no adverse effect on outstanding options, restricted stock unit awards or other stock awards and rejects the benefits of Sections 4(a)(4) of the Plan as to those outstanding options and other stock awards that would have potential adverse effects

¨ other (please describe): ____________________________________________

The undersigned acknowledges that the undersigned has been advised to obtain tax and financial advice regarding the consequences of this election including the effect, if any, on the status of the stock options or restricted stock unit awards for tax purposes under Sections 409A and 422 of the Internal Revenue Code.

Participant

Print name

^* Please check one box; failure to check a box will be deemed the selection of the second alternative (i.e., accepting the benefits of Section 4(a)(4) of the Plan that have no adverse effect on outstanding options, restricted stock unit awards or other stock awards and rejecting the benefits of Section 4(a)(4) of the Plan as to those outstanding options, restricted stock unit awards and other stock awards that would have potential adverse effects).

18.

For Employees Age 40 or Older

Individual Termination

EXHIBIT B

RELEASE AGREEMENT

I understand and agree completely to the terms set forth in the Sequenom, Inc. Change in Control Severance Benefit Plan (the “Plan”).

I understand that this Release, together with the Plan, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated therein. This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company. Certain capitalized terms used in this Release are defined in the Plan.

I hereby confirm my obligations under the Company’s Employee Proprietary Information and Inventions Agreement.

In exchange for the consideration to be provided to me under the Plan to which I am not otherwise entitled, I hereby generally and completely release Sequenom, Inc. and its current and former directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (collectively, the “Released Parties”) from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing this Agreement (collectively, the “Released Claims”). The Released Claims include, but are not limited to: (1) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act (as amended). Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (1) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company to which I am a party, the charter, bylaws, or operating agreements of the Company, or under applicable law; or (2) any rights which are not waivable as a matter of law. In addition, nothing in this Release prevents me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, or the California Department of Fair Employment and Housing, except that I hereby waive my right to any monetary benefits in connection with any such claim, charge or proceeding. I hereby represent and warrant that, other than the Excluded

1.

For Employees Age 40 or Older

Individual Termination

Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims.

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA. I also acknowledge that the consideration given for the Released Claims is in addition to anything of value to which I was already entitled. I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (a) the Released Claims do not apply to any rights or claims that arise after the date I sign this Release; (b) I should consult with an attorney prior to signing this Release (although I may choose voluntarily not to do so); (c) I have 21 days to consider this Release (although I may choose to voluntarily to sign it sooner); (d) I have seven days following the date I sign this Release to revoke the Release by providing written notice to an officer of the Company; and (e) the Release will not be effective until the date upon which the revocation period has expired unexercised, which will be the eighth day after I sign this Release (“Effective Date”).

I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to my release of any claims hereunder.

I hereby represent that I have been paid all compensation owed and for all hours worked, I have received all the leave and leave benefits and protections for which I am eligible, and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.

I acknowledge that to become effective, I must sign and return this Release to the Company so that it is received not later than 21 days following the date it is provided to me, and I must not revoke it thereafter.

EMPLOYEE

Name:

Date:

2.

For Employees Age 40 or Older

Group Termination

EXHIBIT C

RELEASE AGREEMENT

I understand and agree completely to the terms set forth in the Sequenom, Inc. Change in Control Severance Benefit Plan (the “Plan”).

I understand that this Release, together with the Plan, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated therein. This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company. Certain capitalized terms used in this Release are defined in the Plan.

I hereby confirm my obligations under the Company’s Employee Proprietary Information and Inventions Agreement.

In exchange for the consideration to be provided to me under the Plan to which I am not otherwise entitled, I hereby generally and completely release Sequenom, Inc. and its current and former directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (collectively, the “Released Parties”) from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing this Agreement (collectively, the “Released Claims”). The Released Claims include, but are not limited to: (1) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act (as amended). Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (1) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company to which I am a party, the charter, bylaws, or operating agreements of the Company, or under applicable law; or (2) any rights which are not waivable as a matter of law. In addition, nothing in this Release prevents me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, or the California Department of Fair Employment and Housing, except that I hereby waive my right to any monetary benefits in connection with any such claim, charge or proceeding. I hereby represent and warrant that, other than the Excluded

1.

For Employees Age 40 or Older

Group Termination

Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims.

I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA. I also acknowledge that the consideration given for the Released Claims is in addition to anything of value to which I was already entitled. I further acknowledge that I have been advised by this writing, as required by the ADEA, that: (a) the Released Claims do not apply to any rights or claims that arise after the date I sign this Release; (b) I should consult with an attorney prior to signing this Release (although I may choose voluntarily not to do so); (c) I have 45 days to consider this Release (although I may choose to voluntarily to sign it sooner); (d) I have seven days following the date I sign this Release to revoke the Release by providing written notice to an officer of the Company; and (e) the Release will not be effective until the date upon which the revocation period has expired unexercised, which will be the eighth day after I sign this Release (“Effective Date”).

I further acknowledge that I have received the disclosure required by 29 U.S.C. § 626 (f)(1)(H), which is attached hereto as Appendix I.

I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to my release of any claims hereunder.

I hereby represent that I have been paid all compensation owed and for all hours worked, I have received all the leave and leave benefits and protections for which I am eligible, and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.

I acknowledge that to become effective, I must sign and return this Release to the Company so that it is received not later than 45 days following the date it is provided to me, and I must not revoke it thereafter.

EMPLOYEE

Name:

Date:

2.

For Employees Age 40 or Older

Group Termination

APPENDIX I

DISCLOSURE UNDER TITLE 29 U.S. CODE SECTION 626(F)(1)(H)

Confidentiality Provision: The information contained in this document is private and confidential. You may not disclose this information to anyone except your professional advisors.

[Job classifications/positions] informed on [date] of the termination of their employment are eligible to participate in the severance package program. The factors considered in selecting employees for employment termination on [                    ] were: [                    ]. An eligible employee age 40 or more years will have up to forty-five (45) days to review the terms and conditions of the severance package.

EMPLOYEES ELIGIBLE FOR THE SEVERANCE PACKAGE PROGRAM
JOB TITLES	AGE OF THOSE ELIGIBLE	AGE OF THOSE NOT ELIGIBLE

3.

Individuals Under Age 40

Individual or Group Termination

EXHIBIT D

RELEASE AGREEMENT

I understand and agree completely to the terms set forth in the Sequenom, Inc. Change in Control Severance Benefit Plan (the “Plan”).

I understand that this Release, together with the Plan, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated therein. This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company. Certain capitalized terms used in this Release are defined in the Plan.

I hereby confirm my obligations under the Company’s Employee Proprietary Information and Inventions Agreement.

In exchange for the consideration to be provided to me under the Plan to which I am not otherwise entitled, I hereby generally and completely release Sequenom, Inc. and its current and former directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (collectively, the “Released Parties”) from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing this Agreement (collectively, the “Released Claims”). The Released Claims include, but are not limited to: (1) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, and the California Fair Employment and Housing Act (as amended). Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (1) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company to which I am a party, the charter, bylaws, or operating agreements of the Company, or under applicable law; or (2) any rights which are not waivable as a matter of law. In addition, nothing in this Release prevents me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission, the Department of Labor, or the California Department of Fair Employment and Housing, except that I hereby waive my right to any monetary benefits in connection with any such claim, charge or proceeding. I hereby represent and warrant that, other than the Excluded Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims.

Individuals Under Age 40

Individual or Group Termination

I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to my release of any claims hereunder.

I hereby represent that I have been paid all compensation owed and for all hours worked, I have received all the leave and leave benefits and protections for which I am eligible, and I have not suffered any on-the-job injury for which I have not already filed a workers’ compensation claim.

I acknowledge that I have the right to consult with an attorney prior to executing this Release (although I may choose voluntarily not to do so) and that I have 14 days from receipt of this Release in which to consider this Release (although I may choose voluntarily to execute this Release earlier). I acknowledge that to become effective, I must sign and return this Release to the Company so that it is received not later than 14 days following the date it is provided to me.

EMPLOYEE

Name:

Date:

2.

EX-10.53

EXHIBIT 10.53

Sequenom, Inc.

Deferred Compensation Plan

Master Plan Document

Effective June 1, 2007

As Amended Through December 12, 2008

TABLE OF CONTENTS

		PAGE
PURPOSE		1
ARTICLE 1	DEFINITIONS	1
ARTICLE 2	SELECTION/ENROLLMENT/ELIGIBILITY	7
2.1	Selection by Committee.	7
2.2	Enrollment Requirements.	7
2.3	Eligibility; Commencement of Participation.	7
2.4	Termination of Participation and/or Deferrals.	7
ARTICLE 3	DEFERRAL COMMITMENTS/ COMPANY CONTRIBUTION AMOUNTS/VESTING/CREDITING/TAXES	8
3.1	Maximum Deferral.	8
3.2	Election to Defer; Effect of Election Form.	8
3.3	Company Contribution Amount	10
3.4	Investment of Trust Assets.	10
3.5	Vesting	10
3.6	Crediting/Debiting of Account Balances.	11
3.7	FICA and Other Taxes	13
3.8	Withholding on Distributions.	13
ARTICLE 4	SHORT-TERM PAYOUT/UNFORESEEABLE FINANCIAL EMERGENCIES/CHANGE IN CONTROL WITHDRAWAL ELECTIONS	14
4.1	Short-Term Payout.	14
4.2	Changes to Short-Term Payout Elections.	14
4.3	Other Benefits Take Precedence Over Short-Term.	14
4.4	Withdrawal Payouts for Unforeseeable Financial Emergencies.	14
4.5	Effect of a Change in Control.	15
ARTICLE 5	SURVIVOR BENEFIT	15
5.1	Survivor Benefit.	15
ARTICLE 6	TERMINATION BENEFIT	15
6.1	Termination Benefit.	15
6.2	Payment of Termination Benefit.	15
6.3	Post-Termination Distribution Commencement Elections.	16
6.4	Changes to Termination Distribution Elections.	16

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TABLE OF CONTENTS

(CONTINUED)

		PAGE
6.5	Default Distribution Election.	16
ARTICLE 7	DISABILITY WAIVER AND BENEFIT	16
7.1	Disability Waiver.	16
7.2	Disability Benefit.	17
ARTICLE 8	DISTRIBUTIONS	17
8.1	Form of Distributions	17
8.2	No Discretionary Distributions.	17
8.3	Receipt or Release.	17
ARTICLE 9	BENEFICIARY DESIGNATION	18
9.1	Beneficiary.	18
9.2	Beneficiary Designation; Change; Spousal Consent.	18
9.3	Acknowledgment.	18
9.4	No Beneficiary Designation.	18
9.5	Doubt as to Beneficiary.	18
9.6	Discharge of Obligations.	18
ARTICLE 10	ACCELERATION OF PAYMENTS	19
10.1	Domestic Relations Order.	19
10.2	Compliance with Ethics Agreements and Legal Requirements.	19
10.3	Divestiture.	19
10.4	De Minimis Amounts.	19
10.5	Federal Insurance Contributions Act.	19
10.6	Section 409A Additional Tax.	19
10.7	Corporate Events.	19
10.8	Offset.	19
ARTICLE 11	CESSATION OF CONTRIBUTIONS, TERMINATION, AMENDMENT OR MODIFICATION	20
11.1	Cessation of Contributions.	20
11.2	Termination.	20
11.3	Amendment.	20
11.4	Amendments to Comply with Section 409A.	20

ii

TABLE OF CONTENTS

(CONTINUED)

		PAGE
ARTICLE 12	ADMINISTRATION	21
12.1	Committee Duties.	21
12.2	Administration Upon Change In Control.	21
12.3	Agents.	22
12.4	Binding Effect of Decisions.	22
12.5	Indemnity of Committee.	22
12.6	Employer Information.	22
ARTICLE 13	OTHER BENEFITS AND AGREEMENTS; CLAIMS PROCEDURES	22
13.1	Coordination with Other Benefits.	22
13.2	Claims Procedures.	22
ARTICLE 14	SECURITIES LAWS COMPLIANCE	22
14.1	Designation of Participants.	22
14.2	Action by Committee.	22
14.3	Compliance with Section 16.	23
ARTICLE 15	TRUST	23
15.1	Establishment of the Trust and Selection of Trustee.	23
15.2	Interrelationship of the Plan and the Trust.	23
15.3	Distributions From the Trust.	23
ARTICLE 16	PLAN EXPENSES	23
16.1	Plan Expenses.	23
ARTICLE 17	MISCELLANEOUS	24
17.1	Status of Plan.	24
17.2	Unsecured General Creditor.	24
17.3	Employer’s Liability.	24
17.4	Nonassignability.	24
17.5	Not a Contract of Employment.	24
17.6	Furnishing Information.	24
17.7	Terms.	24
17.8	Captions.	25
17.9	Governing Law.	25

iii

TABLE OF CONTENTS

(CONTINUED)

		PAGE
17.10	Notice.	25
17.11	Successors.	25
17.12	Validity.	25
17.13	Incompetent.	25
17.14	Court Order.	25
17.15	Insurance	25
17.16	Legal Fees To Enforce Rights After Change in Control.	26
17.17	Scrivener’s Error.	26
17.18	Compliance with Section 409A of the Code.	26
17.19	Disclaimer.	26
Appendix A	CLAIMS PROCEDURES
Appendix B	DISABILITY CLAIMS PROCEDURES

iv

SEQUENOM, INC. DEFERRED COMPENSATION PLAN

Purpose

The purpose of this Plan is to provide specified benefits to a select group of management and highly compensated Employees and Directors who contribute materially to the continued growth, development and future business success of Sequenom, Inc., a Delaware corporation, and its subsidiaries, if any, that sponsor this Plan. This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.

ARTICLE 1

Definitions

For purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

1.1 “401(k) Plan” shall be that certain Sequenom, Inc. defined contribution plan intended to satisfy the requirements of Sections 401(a), 401(k), 401(m), and 414(i) of the Code, as adopted by the Company.

1.2 “Account(s)” shall mean, with respect to a Participant, his or her Deferral Account, Company Contribution Account and RSU Account.

1.3 “Account Balance” shall mean, with respect to a Participant, a credit on the records of the Employer equal to the sum of (i) the Deferral Account balance, (ii) the vested Company Contribution Account balance, and (iii) the vested RSU Account balance. The Account Balance, and each other specified account balance, shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan.

1.4 “Annual Base Salary” shall mean the annual cash compensation relating to services performed during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form W-2 for such calendar year, excluding bonuses, commissions, overtime, fringe benefits, stock options, restricted stock, relocation expenses, unused and unpaid excess vacation days, incentive payments, non-monetary awards, directors fees and other fees, automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Employee’s gross income) (“Compensation”). Annual Base Salary shall be calculated before reduction for Compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant’s gross income under Code Sections 125, 402(e)(3) or 402(h) pursuant to plans established by any Employer; provided, however, that all such amounts will be included in calculating Annual Base Salary only to the extent that, (1) had there been no such plan, the amount would have been payable in cash to the Employee and, (2) Employee’s contributions, deferrals and the Company or Employer’s related withholding obligations under all Company plans, including the Plan, do not exceed 100% of Employee’s total Compensation.

1.5 “Annual Bonus” shall mean any cash compensation, in addition to Annual Base Salary, relating to services performed during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form W-2 for such calendar year, payable to a Participant

1

as an Employee under any Employer’s annual bonus and cash incentive plans, excluding stock options and restricted stock.

1.6 “Annual Deferral Amount” shall mean that portion of a Participant’s Annual Base Salary, Annual Bonus and Director Fees that a Participant elects to have, and is deferred, in accordance with Article 3, for any one Plan Year. In the event of a Participant’s Disability (if deferrals cease in accordance with Section 7.1), death, or a Separation from Service prior to the end of a Plan Year, such year’s Annual Deferral Amount shall be the actual amount withheld prior to such event.

1.7 “Annual Installment Method” shall be an annual installment payment over the number of years (not to exceed 10) selected by the Participant in accordance with this Plan, calculated as follows: Each annual installment payment shall be calculated by multiplying the applicable portion of the Account Balance by a fraction, the numerator of which is one, and the denominator of which is the remaining number of annual payments due the Participant. By way of example, if the Participant elects a 10-year Annual Installment Method, the first payment shall be 1/10 of the applicable portion of the Account Balance. The following year, the payment shall be 1/9 of the applicable portion of the Account Balance.

1.8 “Beneficiary” shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article 9, that are entitled to receive benefits under this Plan upon the death of a Participant.

1.9 “Beneficiary Designation Form” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries.

1.10 “Board” shall mean the board of directors of the Company or a committee of the Board.

1.11 “Change in Control” shall mean the first to occur of any of a change in the ownership of the Company, a change in the effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company (as these events are defined in Treas. Reg. § 1.409A-3(i)(5), or as these definitions may later be modified by other regulatory pronouncements).

1.12 “Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.

1.13 “Committee” shall mean the committee described in Article 12.

1.14 “Company” shall mean Sequenom, Inc., a Delaware corporation, and any successor to all or substantially all of the Company’s assets or business.

1.15 “Company Contribution Account” shall mean (i) the sum of the Participant’s Company Contribution Amounts, plus (ii) amounts credited (net of amounts debited) in accordance with all the applicable crediting provisions of this Plan that relate to the Participant’s Company Contribution Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Participant’s Company Contribution Account.

1.16 “Company Contribution Amount” shall mean, for any one Plan Year, the amount determined in accordance with Section 3.3.

1.17 “Company Stock Measurement Fund” shall mean the Measurement Fund which shall be deemed invested in the Company’s common stock. Participants will have no rights as stockholders of the Company with respect to allocations made to their Accounts which are deemed invested in the Company Stock Measurement Fund.

1.18 “Deduction Limitation” shall mean the following described limitation on a benefit that may otherwise be distributable pursuant to the provisions of this Plan. Except as otherwise provided,

2

this limitation shall be applied to all distributions that are “subject to the Deduction Limitation” under this Plan. If an Employer determines in good faith prior to a Change in Control that there is a reasonable likelihood that any compensation paid to a Participant for a taxable year of the Employer would not be deductible by the Employer solely by reason of the limitation under Code Section 162(m), then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution to the Participant pursuant to this Plan prior to the Change in Control is deductible, the Employer may defer all or any portion of a distribution under this Plan. Any amounts deferred pursuant to this limitation shall continue to be credited/debited with additional amounts in accordance with Section 3.6 below, even if such amount is being paid out in installments. The amounts so deferred and amounts credited thereon shall be distributed to the Participant or his or her Beneficiary (in the event of the Participant’s death) at the earliest possible date, as determined by the Employer in good faith, on which the deductibility of compensation paid or payable to the Participant for the taxable year of the Employer during which the distribution is made will not be limited by Section 162(m), or if earlier, the effective date of a Change in Control of the calendar year in which the Participant has a Separation from Service. Notwithstanding anything to the contrary in this Plan, the Deduction Limitation shall not apply to any distributions made after a Change in Control.

1.19 “Deferral Account” shall mean (i) the sum of all of a Participant’s Annual Deferral Amounts, plus (ii) amounts credited in accordance with all the applicable crediting provisions of this Plan that relate to the Participant’s Deferral Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to his or her Deferral Account.

1.20 “Director” shall mean any member of the board of directors of the Employer.

1.21 “Director Fees” shall mean the annual cash fees paid by any Employer, including retainer fees and meeting fees, as compensation for serving on the board of directors.

1.22 “Director Fee Account” shall mean the portion of the Deferral Account that consists of (i) the sum of the Director’s Director Fee deferrals, plus (ii) amounts credited (net of amounts debited) in accordance with all the applicable crediting provisions of this Plan that relate to the Director Fee deferrals, less (iii) all distributions made to the Director or his or her Beneficiary pursuant to this Plan that relate to his Director Fee Account.

1.23 “Disability” (or, where the context requires, “Disabled”) shall mean a period of disability during which a Participant is receiving income replacement benefits for a period of not less than 3 months under an accident and health plan sponsored by his or her Employer by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, as determined in the sole discretion of the Committee. In addition, Disability shall mean the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. Determination of Disability shall be made by the Committee in a manner consistent with its definition as provided in Section 409A.

1.24 “Disability Benefit” shall mean the benefit set forth in Article 7.

1.25 “Election Form” shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to make an election under the Plan. A Participant may determine on the Election Form the time and manner in which such amounts deferred under the Plan shall be distributed.

3

1.26 “Employee” shall mean a person who is an employee of any Employer.

1.27 “Employer(s)” shall mean the Company and/or any of its subsidiaries (now in existence or hereafter formed or acquired) that have been selected by the Board to participate in the Plan and have adopted the Plan as a sponsor.

1.28 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

1.29 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. Reference to a section of the Exchange Act shall include that section and any comparable section or sections of any future legislation that amends, supplements or supersedes such section.

1.30 “Measurement Fund” shall mean the mutual funds, insurance company separate accounts, indexed rates or other methods selected by the Committee for the purpose of providing the basis on which gains and losses shall be attributed to Account Balances under the Plan. Unless otherwise determined by the Committee in accordance with Section 3.6(c), the Measurement Funds shall be the funds available as investment alternatives under the 401(k) Plan and the Company’s common stock.

1.31 “Participant” shall mean any Employee or Director (i) who is selected to participate in the Plan, (ii) who elects to participate in the Plan, (iii) who signs an Election Form, (iv) whose signed Election Form is accepted by the Committee or its designee, and (v) who commences participation in the Plan. A spouse or former spouse of a Participant shall not be treated as a Participant in the Plan or have an account balance under the Plan, even if he or she has an interest in the Participant’s benefits under the Plan as a result of applicable law or property settlements resulting from legal separation or divorce.

1.32 “Performance-Based Compensation” means compensation that meets the requirements of performance-based compensation specified in Section 409A(a)(4)(B)(iii) of the Code. Performance-Based Compensation shall be designated as such by the Company and must relate to services performed by the Participant during a designated incentive period of at least twelve (12) months provided that the Participant performed services continuously from a date no later than the date upon which the performance criteria are established through a date no earlier than the date upon which the Participant makes an initial deferral election. The performance goals must be preestablished by the Company in writing no later than ninety (90) days after the commencement of the performance period, and the outcome must be substantially uncertain at the time the criteria are established.

1.33 “Plan” shall mean the Sequenom, Inc. Deferred Compensation Plan, which shall be evidenced by this master plan document, as it may be amended from time to time.

1.34 “Plan Year” or “Year” shall mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year.

1.35 “RSU Account” shall mean (i) the sum of all of a Participant’s RSU Deferral Amounts, plus (ii) the hypothetical deemed investment earnings and losses credited or charged in accordance with all the applicable provisions of this Plan that relate to the Participant’s RSU Deferral Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Participant’s RSU Account.

1.36 “RSU Award” shall mean any restricted stock unit award granted by the Company to a Participant which is eligible to be deferred under the Plan, including but not limited to restricted stock unit awards granted to Directors.

4

1.37 “RSU Deferral Amount” shall be the amount determined in accordance with Sections 3.2(e) and 3.6(g).

1.38 “Section 409A” or “Code Section 409A” shall mean Section 409A of the Internal Revenue Code of 1986, as it may be amended from time to time, and the regulations and other guidance thereunder.

1.39 “Separation from Service,” shall mean the severing of employment with all Employers, or service as a Director of all Employers, voluntarily or involuntarily, for any reason other than Disability, death or an authorized leave of absence if such termination constitutes a separation from service under Code Section 409A, subject to the following conditions to the extent required by Section 409A of the Code:

a) If the Participant takes a leave of absence from the Company for purposes of military leave, sick leave, or other bona fide leave of absence, the Participant’s employment will be deemed to continue and Compensation shall continue to be withheld in accordance with the Participant’s deferral election during such leave of absence, for the first six months of the leave of absence, or if longer, for so long as the Participant’s right to reemployment is provided by either by statute or by contract. If the period of the leave exceeds six months and the Participant’s right to reemployment is not provided by either statute or contract, the Participant will be considered to have incurred a Separation from Service on the first date immediately following such six-month period.

b) If the Participant provides insignificant services to the Company, the Participant will be deemed to have incurred a Separation from Service. For this purpose, an Employee Participant is considered to be providing insignificant services if he provides services at an annual rate that is less than twenty percent of the services rendered by such individual, on average, during the immediately preceding three calendar years of employment (or such lesser period of employment).

c) If an Employee Participant continues to provide services to the Company in a capacity other than as an Employee, the Participant will not be deemed to have a Separated from Service if the Participant is providing services at an annual rate that is at least fifty percent of the services rendered by such individual, on average, during the immediately preceding three calendar years of employment (or such lesser period of employment).

Additionally, the following shall also apply if a Participant serves as both a Director and an Employee, to the extent required by Code Section 409A:

d) Upon Participant’s cessation of service as a Director of all Employers, a Separation from Service will occur only with respect to the Director Fee Account and the portion of the RSU Account attributable to RSU Awards granted to the Participant for service as a Director, plus net amounts credited in accordance with all the applicable crediting provisions of this Plan that relate to such deferrals, less all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to such deferrals (collectively the “Director Deferrals”); and

5

e) Upon Participant’s severing of employment with all Employers, a Separation of Service will occur only with respect to the portion of the Account Balance that is not attributable to Director Deferrals.

f) The Plan shall maintain separate accounting for Director Deferrals.

1.40 “Short-Term Payout” shall mean the distribution election described in Section 4.1. The Plan shall maintain separate accounting for all Short-Term Payouts that are scheduled to be paid in a particular Plan Year.

1.41 “Specified Employee” means for purposes of this Plan, and in accordance with Section 409A, a “Key Employee” as set forth below and as defined in Section 416(i) of the Code, without regard to paragraph (5) thereof, of a corporation any stock in which is publicly traded on an established securities market or otherwise on the date of the Separation from Service. If a person is a Key Employee, the person is treated as a Specified Employee for the 12-month period beginning on the April 1^st that first follows the Key Employee Identification Date. An employee will be considered a “Key Employee” if such employee meets the requirements of this Section 1.37 at any time during the 12-month period ending on the Key Employee Identification Date. The “Key Employee Identification Date” for the Plan is December 31st. Whether an employee is a five percent owner or a one percent owner as provided below shall be determined in accordance with Section 416(i)(1)(B) of the Code.

a) An officer of the Company having an annual compensation greater than $145,000 in 2007, $150,000 in 2008, or $160,000 in 2009, as such threshholds are thereafter adjusted at the same time and in the same manner as under Section 415(d) of the Code. Not more than fifty (50) employees or, if less, the greater of three (3) employees or ten percent (10%) of the Company’s employees shall be considered as officers for purposes of this subsection.

b) A five percent owner of the Company.

c) A one percent owner of the Company having an annual compensation from the Company of more than $150,000.

1.42 “Survivor Benefit” shall mean the benefit set forth in Article 5.

1.43 “Termination Benefit” shall mean the benefit set forth in Article 6.

1.44 “Trust” shall mean one or more trusts established between the Company and a Plan trustee pursuant to a trust agreement, as amended from time to time, pursuant to Article 15.

1.45 “Unforeseeable Financial Emergency” shall mean an unanticipated emergency that causes a severe financial hardship of the Participant and results from an illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary or the Participant’s dependent; loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. “Unforeseeable Emergency” may include, for example, the imminent foreclosure of or eviction from the Participant’s primary residence or the need to pay for medical expenses, including non-refundable deductibles, as well as for the costs of prescription drug medication and the need to pay for the funeral expenses of a spouse,

6

Beneficiary or dependent. Whether a Participant has a Unforeseeable Financial Emergency shall be determined in the sole discretion of the Committee in accordance with the requirements of Section 409A.

1.46 “Years of Service” shall mean the total number of years in which a Participant has been employed by one or more Employers. For purposes of this definition, a year of employment shall be a 365 day period (or 366 day period in case of a leap year) that, for the first year of employment, commences on the Employee’s date of hiring and that, for any subsequent year, commences on an anniversary of that hiring date.

ARTICLE 2

Selection/Enrollment/Eligibility

2.1 Selection by Committee. Participation in the Plan shall be limited to a select group of management and highly compensated Employees and Directors of the Employers, as determined by the Committee in its sole discretion. From that group, the Committee shall select, in its sole discretion, Employees and Directors to participate in the Plan. Unless otherwise determined by the Committee, all Directors and those Employees that are at the level of Vice President and above will be eligible to participate in the Plan.

2.2 Enrollment Requirements. As a condition to participation, each selected Employee or Director shall complete, execute and return to the Committee an Election Form and such other documents as the Committee may require within thirty (30) days after he or she first becomes eligible to participate in the Plan. In addition, the Committee shall establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary. For purposes of the initial eligibility election, a Participant that previously ceased to be eligible to participate in the Plan will also be treated as being again initially eligible to participate in the Plan if the Participant has not been eligible to participate in the Plan (other than the accrual of earnings) at any time during the 24-month period ending on the date the Participant again becomes eligible to participate in the Plan.

2.3 Eligibility; Commencement of Participation. Provided an Employee or Director has been selected to participate in the Plan, he or she will become eligible to participate in the Plan on the date that he or she receives the written enrollment materials or enrollment instructions for the Plan. The eligible Employee or Director shall commence participation in the Plan on the first day of the month following the month in which the Employee or Director completes all enrollment requirements. If an Employee or a Director fails to meet all such requirements within the period required, in accordance with Section 2.2, that Employee or Director shall not be eligible to participate in the Plan until the first day of the first Plan Year following the delivery to and acceptance by the Committee of the required documents.

2.4 Termination of Participation and/or Deferrals.

(a) Notwithstanding any other provisions of this Plan, each Employee that is selected as an eligible Participant for a Plan Year shall continue to be eligible to participate in this Plan in future Plan Years as long as such Employee remains in a designated eligible position. In the event a Participant selected to participate in the Plan on an elective basis no longer meets the criteria for participation, except as provided below, such Participant shall retain all the rights described under the Plan, except the right to make any deferrals for future Plan Years, until such time that the Participant again meets the criteria for participation

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and is notified of his or her eligibility to participate in the Plan.

(b) If the Committee determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall have the right, in its sole discretion, to prevent the Participant from making future deferrals, provided that such termination of deferrals complies with the requirements of Section 409A of the Code.

ARTICLE 3

Deferral Commitments/ Company Contribution Amounts/Vesting/Crediting/Taxes

3.1 Maximum Deferral.

(a) Annual Base Salary, Annual Bonus and Directors Fees. For each Plan Year, a Participant may elect to defer, as his or her Annual Deferral Amount, Annual Base Salary, Annual Bonus and/or Director Fees up to the following maximum percentages for each deferral elected:

Deferral	Maximum Amount
Annual Base Salary	100%
Annual Bonus	100%
Director Fees	100%

(b) RSU Awards. A Participant may elect to defer all or any portion of an RSU Award in accordance with Section 3.2(e) .

(c) Short Plan Year. Notwithstanding the foregoing, if a Participant first becomes a Participant after the first day of a Plan Year, or in the case of the First Plan Year of the Plan itself, the maximum Annual Deferral Amount with respect to Annual Base Salary, Annual Bonus and/or Director Fees shall be limited to the amount of compensation not yet earned by the Participant as of the beginning of the first full calendar month that commences following the date in which Participant submits an Election Form and any other required enrollment materials to the Committee or its designee for acceptance.

3.2 Election to Defer; Effect of Election Form.

(a) First Plan Year. In connection with a Participant’s commencement of participation in the Plan, the Participant shall make an irrevocable deferral election of future compensation for the Plan Year in which the Participant commences participation in the Plan, along with such other elections as the Committee deems necessary or desirable under the Plan. For these elections to be valid, the Election Form must be completed and signed by the Participant, timely delivered to the Committee or its designee (in accordance with Section 2.2 above) and accepted by the Committee or its designee.

(b) Subsequent Plan Years. In order for a Participant to participate in the Plan during subsequent Years, then except as provided in Section 3.2(d) for Performance-Based Compensation and Section 3.2(h), the Participant must complete an Election Form and deliver it to the Committee or its designee during the Plan enrollment period preceding the Year for which the new election will begin to apply. The deferral election will be effective with

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respect to compensation attributable to services performed by such Participant beginning on the following January 1st.

(c) Participation Election Irrevocability, Duration and Changes. Except as permitted under Section 4.4 or 3.2(h), any deferral election made for a Year shall be irrevocable with respect to such Year once it is submitted and is unique to that Year. In order to participate in subsequent Years, a Participant must make a new deferral election by filing with the Committee or its designee a new Election Form during the Plan enrollment period preceding the Year for which the new deferral election will begin to apply.

(d) Performance Based Compensation. Notwithstanding anything to the contrary set forth herein, for deferrals of Performance-Based Compensation, the Participant may file an Election Form with the Committee or its designee at any time up to the date that is at least six (6) months before the end of the performance period.

(e) RSU Awards. Subject to any terms and conditions imposed by the Committee, Participants may elect to defer RSU Awards under the Plan. For these elections to be valid, the Election Form must be completed and signed by the Participant, timely delivered to the Committee or its designee no later than thirty (30) days following the grant date of the RSU Award, and such RSU Award must not vest any earlier than thirteen (13) months following the grant date, or such deferral election must otherwise be made in compliance with the requirements of Section 409A of the Code, and accepted by the Committee or its designee.

(f) Withholding of Annual Deferral Amounts. For each Plan Year, the Annual Base Salary portion of the Annual Deferral Amount shall be withheld from each regularly scheduled Annual Base Salary payroll in equal amounts over each pay period, as adjusted from time to time for increases and decreases in Annual Base Salary. The Annual Bonus and/or Director Fees portion of the Annual Deferral Amount shall be withheld at the time the Annual Bonus or Director Fees are or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year itself.

(g) Effect of Deferral Election. The deferral election will not be effective with respect to compensation attributable to services performed prior to the filing of the Election Form and will take effect on the first date of the first full calendar month that commences following the filing of the Election Form, or if later, as soon as administratively possible following such date. Unless the eligible Participant’s election can comply with the requirements in Section 3.2(d) for “Performance–Based Compensation,” any deferral of Annual Bonus to be received with respect to such initial Year of eligibility shall be limited to a fraction of such Annual Bonus, with the numerator of the fraction being the number of full calendar months remaining in the performance period after the Election Form is delivered and the denominator of which is the total number of full calendar months in the performance period. The deferral election cannot be for the first Year that the Participant first becomes eligible to participate in the Plan if the Participant previously was eligible to participate in any other non-qualified deferred compensation account balance plan of the Company, its subsidiaries or its affiliates.

(h) Election Changes. The Committee, in its sole discretion, is authorized to provide a Participant with the right to extend the deferral period originally elected by such Participant on an Election Form to a later date if the election change (i) does not take effect until at least twelve (12) months after the date on which the new Election Form is

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filed with the Committee, (ii) the payment with respect to such change in election is deferred for a period of not less than five (5) years after the date such payment would otherwise have been made or would commence to be paid (except to the extent payable as a result of death or Disability), and (iii) the election change is made at least twelve (12) months prior to the date the payment(s) would otherwise have commenced, in each case in accordance with the requirements of Section 409A of the Code. In the case of an ineffective change, benefits will be paid in accordance with the most recently filed valid Election Form. For purposes of any election changes, payments to be made pursuant to the Annual Installment Method shall be treated as a single payment. The foregoing notwithstanding, the Committee is authorized to provide a Participant with the right to modify any payment schedule with respect to a distribution of a Short-Term Payout and/or a Termination Benefit prior to January 1, 2009 so long as such modification complies with requirements in IRS Notice 2007-86.

3.3 Company Contribution Amount. For each Plan Year, an Employer, in its sole discretion, may, but is not required to, credit any amount it desires to any Participant’s Company Contribution Account under this Plan, which amount shall be for that Participant the Company Contribution Amount for that Plan Year. The amount so credited to a Participant may be smaller or larger than the amount credited to any other Participant, and the amount credited to any Participant for a Plan Year may be zero, even though one or more other Participants receive a Company Contribution Amount for that Plan Year. The Company Contribution Amount, if any, shall be credited as of any date within the Plan Year as selected by the Company. If a Participant is not employed by an Employer as of such date, other than by reason of his or her death while employed, the Company Contribution Amount for that Plan Year shall be zero. The timing and form of distribution of the Company Contribution Account shall be determined by the Committee at the time the contribution is made to the Plan, and the Committee may establish procedures for Participants to make distribution elections with respect to such amounts. In the absence of any such determination by the Committee or election by the Participant, the Company Contribution Account will be distributed in a lump sum in the Plan Year that first follows a Participant’s Separation from Service in accordance with the distribution procedures set forth in Article 6.

3.4 Investment of Trust Assets. The trustee of the Trust shall be authorized, upon written instructions received from the Committee or investment manager appointed by the Committee, to invest and reinvest the assets of the Trust in accordance with the applicable Trust Agreement.

3.5 Vesting.

(a) A Participant shall at all times be 100% vested in his or her Deferral Account.

(b) A Participant shall vest in the shares credited to the RSU Account in accordance with the vesting schedule applicable to the particular RSU Award, which may vary among Participants and among RSU Awards. In the event of a Participant’s Separation from Service, other than by reason of his or her death or Disability, prior to the date on which all RSU Awards have vested, the unvested portion of such RSU Award shall be forfeited, and no Employer or the Plan shall be liable for the distribution of such shares to such Participant. Any shares credited to a Participant’s RSU Account by his or her Employer on his or her behalf which are forfeited by such Participant pursuant to the preceding sentence shall cease to be liabilities of the Employer or the Plan and such shares shall be immediately debited from the Participant’s RSU Account.

(c) The Committee, in its sole discretion, will determine over what period of time and in what percentage increments a Participant shall vest in his or her Company Contribution Account. The Committee may credit some Participants with larger or smaller vesting percentages than other Participants, and the vesting percentage credited to any Participant

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for a Plan Year may be zero, even though one or more other Participants have a greater vesting percentage credited to them for that Plan Year.

(d) Notwithstanding anything in this Section to the contrary, except as provided in subsection (e) below, in the event of a Change in Control, any unvested portion of a Participant’s Company Contribution Account shall immediately become 100% vested.

(e) Notwithstanding subsection (d) above, the vesting schedule for a Participant’s Company Contribution Account shall not be accelerated to the extent that the Committee determines that such acceleration would cause the deduction limitations of Section 280G of the Code to become effective. In the event that all of a Participant’s Company Contribution Account is not vested pursuant to such a determination, the Participant may request independent verification of the Committee’s calculations with respect to the application of Section 280G. In such case, the Committee must provide to the Participant within thirty (30) business days of such a request an opinion from a nationally-recognized accounting firm selected by the Committee (the “Accounting Firm”). The opinion shall state the Accounting Firm’s opinion that any limitation in the vested percentage hereunder is necessary to avoid the limits of Section 280G and contain supporting calculations. The cost of such opinion shall be paid for by the Company.

3.6 Crediting/Debiting of Account Balances. In accordance with, and subject to, the rules and procedures that are established from time to time by the Committee, in its sole discretion, amounts shall be credited or debited to a Participant’s Account Balance in accordance with the following rules:

(a) Participant Election of Measurement Funds. A Participant, in connection with his or her initial deferral election in accordance with Section 3.2 above, shall elect, on the Election Form, one or more Measurement Fund(s) to be used to determine the additional amounts to be credited to his or her Account Balance for the first business day in which the Participant commences participation in the Plan and continuing thereafter for each subsequent day in which the Participant participates in the Plan, unless changed in accordance with the next sentence. Commencing with the first business day that follows the Participant’s commencement of participation in the Plan and continuing thereafter for each subsequent day in which the Participant participates in the Plan, the Participant may (but is not required to) elect, by submitting an Election Form to the Committee that is accepted by the Committee, to add or delete one or more Measurement Fund(s) to be used to determine the additional amounts to be credited to his or her Account Balance, or to change the portion of his or her Account Balance allocated to each previously or newly elected Measurement Fund. If an election is made in accordance with the previous sentence, it shall apply to the next business day and continue thereafter for each subsequent day in which the Participant participates in the Plan, unless changed in accordance with the previous sentence. Notwithstanding the foregoing, any portion of the Account Balance allocated by a Participant to the Company Stock Measurement Fund may not thereafter be changed to another Measurement Fund, and amounts previously allocated to a Measurement Fund by a Participant may not thereafter be changed to the Company Stock Measurement Fund. Additionally, Employee Participant deferrals of Annual Base Salary and/or Annual Bonus that are elected by the Participant to be allocated to the Company Stock Measurement Fund shall be initially allocated to a Measurement Fund selected by the Participant, or the Plan’s default Measurement Fund if no such allocation is made, and such amounts will be swept into the Company Stock

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Measurement Fund on a quarterly basis in accordance with procedures established by the Committee, or, if applicable, the Board or its Compensation Committee, in compliance with the requirements of Rule 16b-3(f) of the Exchange Act and any other applicable provision of the Exchange Act.

(b) Proportionate Allocation. In making any election described in Section 3.6(a) above, the Participant shall specify on the Election Form the percentage of his or her Account Balance to have gains and losses measured by a Measurement Fund.

(c) Measurement Funds. From time to time, the Committee in its sole discretion shall select and announce to Participants its selection of Measurement Funds, for the purpose of providing the basis on which gains and losses shall be attributed to Account Balances under the Plan. The Committee may, in its sole discretion, discontinue, substitute or add a Measurement Fund at any time. Each such action will take effect as of the first day of the first calendar quarter that commences following such approval, provided that the Committee gives Participants at least 30 days advance written notice of such change.

(d) Crediting or Debiting Method. The performance of each elected Measurement Fund (either positive or negative) will be determined by the Committee, in its reasonable discretion, based on available reports of the performance of the Measurement Funds. A Participant’s Account Balance shall be credited or debited on a daily basis based on the performance of each Measurement Fund selected by the Participant, as determined by the Committee in its sole discretion, as though (i) a Participant’s Account Balance were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such day, as of the close of business on such day, at the closing price on such date; (ii) the portion of the Annual Deferral Amount that was actually deferred during any day was invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such day, no later than the close of business on the first business day after the day on which such amounts are actually deferred through reductions in his or her payroll, at the closing price on such date; and (iii) any distribution made to a Participant that decreases such Participant’s Account Balance ceased being invested in the Measurement Fund(s), in the percentages applicable to such day, no earlier than one business day prior to the distribution, at the closing price on such date.

(e) No Actual Investment. Notwithstanding any other provision of this Plan that may be interpreted to the contrary, the Measurement Funds are to be used for measurement purposes only, and a Participant’s election of any such Measurement Fund, the allocation to his or her Account Balance thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant’s Account Balance shall not be considered or construed in any manner as an actual investment of his or her Account Balance in any such Measurement Fund. In the event that the Company or the Trustee (as that term is defined in the Trust), in its own discretion, decides to invest funds in any or all of the Measurement Funds, no Participant shall have any rights in or to such investments themselves. Without limiting the foregoing, a Participant’s Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Company or the Trust; the Participant shall at all times remain an unsecured creditor of the Company.

(f) Company Contribution Accounts. Notwithstanding any other provision of this Plan to the contrary, Company Contribution Amounts may only be allocated to the Measurement Funds designated by the Committee from time to time, in its sole discretion; provided,

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however, that the Company Contribution Amount may not be allocated to the Company Stock Measurement Fund unless approved by the Board or its Compensation Committee in compliance with the requirements of the Exchange Act.

(g) RSU Account. Each time a Participant timely elects to defer an RSU Award in accordance with Section 3.2(e), an equivalent number of shares of Company common stock subject to such RSU Award shall be credited to the Participant’s RSU Account. Notwithstanding any other provision of this Plan to the contrary, RSU Accounts shall be automatically allocated to the Company Stock Measurement Fund and may not be allocated to any other Measurement Fund.

(h) Amounts Invested in the Company Stock Measurement Fund. With respect to any portion of the Account invested in the Company Stock Measurement Fund, a number of shares of Company common stock with a fair market value not greater than the value of such portion of the Account shall be credited to the Account; provided however that in no event will a fractional number of shares of Company common stock be allocated to the Account. In the event that any amount allocated to the Company Stock Measurement Fund is less than the fair market value of one whole share of Company common stock, such amount will instead be allocated to the default Measurement Fund designated by the Committee.

(i) Default Measurement Fund. Unless otherwise determined by the Committee, the default Measurement Fund for all purposes of the Plan shall be the default investment fund under the 401(k) Plan.

3.7 FICA and Other Taxes.

(a) Annual Deferral Amounts. For each Plan Year in which an Annual Deferral Amount is being withheld from an Employee Participant, the Participant’s Employer(s) shall withhold from that portion of the Participant’s Annual Base Salary and Annual Bonus that is not being deferred, in a manner determined by the Employer(s), the Participant’s share of FICA and other employment taxes on such Annual Deferral Amount. If necessary, the Committee may reduce the Annual Deferral Amount in order to comply with this Section.

(b) Company Contribution Amounts. When an Employee Participant becomes vested in a portion of his or her Company Contribution Amounts, the Participant’s Employer(s) shall withhold from the Participant’s Annual Base Salary and/or Annual Bonus that is not deferred, in a manner determined by the Employer(s), the Participant’s share of FICA and other employment taxes. If necessary, the Committee may reduce the Annual Deferral Amount or the vested portion of the Participant’s Company Contribution Amount in order to comply with this Section.

(c) RSU Awards. When an Employee Participant becomes vested in a portion of his or her RSU Award, the Participant’s Employer(s) shall withhold from the Participant’s Annual Base Salary and/or Annual Bonus that is not deferred, in a manner determined by the Employer(s), the Participant’s share of FICA and other employment taxes. If necessary, the Committee may reduce the Annual Deferral Amount or the vested portion of the Participant’s Company Contribution Amount in order to comply with this Section.

3.8 Withholding on Distributions. The Participant’s Employer(s), or the trustee of the Trust, shall

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withhold from any payments made to a Participant under this Plan all federal, state and local income, employment and other taxes required to be withheld by the Employer(s), or the trustee of the Trust, in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Employer(s) and the trustee of the Trust. The Employer(s) and the trustee of the Trust shall also be authorized to withhold any amount validly owed to the Employer for which the Employer has previously requested but not received payment. By electing to make a deferral under this Plan, the Participant authorizes any required withholding from, at the Employer’s election, distributions and any other amounts payable to the Participant, and the Participant otherwise agrees to make adequate provision for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company and/or Employer, if any, which arise in connection with payments from this Plan. Unless the tax withholding obligations of the Company and/or Employer are satisfied, the Company shall have no obligation to make distributions under this Plan. The Committee, in its discretion, and subject to such requirements as the Committee may impose prior to the occurrence of such withholding, may permit such withholding obligations to be satisfied through cash payment by the Participant. Additionally, for distributions of the RSU Account the tax withholding obligation may be satisfied by a reduction in the number of shares issued to the Participant, but only if such reduction in shares is approved by the Board or its Compensation Committee.

ARTICLE 4

Short-Term Payout/Unforeseeable Financial Emergencies/Change in Control

Withdrawal Elections

4.1 Short-Term Payout. In connection with each deferral election, a Participant may elect to receive a portion, or all, of the compensation being deferred for a given Plan Year, and the earnings thereon, as one or more future “Short-Term Payouts” from the Plan. Subject to the Deduction Limitation, the Short-Term Payout shall be made in a lump sum payment or pursuant to the Annual Installment Method as elected by the Participant in an amount that is equal to the portion of the Account Balance attributable to such deferral, plus amounts credited or debited in the manner provided in Section 3.6 on that amount, determined at the time that the Short-Term Payout becomes payable (rather than the date of a Separation from Service). Subject to the Deduction Limitation and the other terms and conditions of this Plan, each Short-Term Payout elected shall be paid out during a ninety (90) day period commencing after the beginning of any Plan Year designated by the Participant that is at least one full Plan Year after the end of the Plan Year in which the Annual Deferral Amount or RSU Award is actually deferred. By way of example, if a Short-Term Payout deferral is elected for Annual Deferral Amounts that are deferred in the Plan Year commencing January 1, 2008, the earliest a Short-Term Payout would become payable would be during a ninety (90) day period commencing January 1, 2010. Participants may create or maintain up to five (5) Short-Term Payout distribution dates concurrently. Participants may also elect to receive future compensation in subsequent Plan Years as part of an existing Short-Term Payout by electing an existing Short-Term Payout distribution date.

4.2 Changes to Short-Term Payout Elections. The Participant may change his or her Short-Term Payout distribution elections in accordance with Section 3.2(h), to the extent such change does not accelerate the time of any scheduled payment under the Plan or fail to comply with the provisions of Code Section 409A(a)(4)(C), to an allowable alternative payout period by submitting a new Election Form to the Committee, provided that any such Election Form is accepted by the Committee, in its sole discretion. The Election Form most recently accepted by the Committee shall govern the Short-Term Payout.

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4.3 Other Benefits Take Precedence Over Short-Term. Should an event occur that triggers a benefit under Article 5, 6 or 7, any portion of the Account Balance that is subject to a Short-Term Payout election under Section 4.1 shall not be paid in accordance with Section 4.1 but shall be paid in accordance with the other applicable Article.

4.4 Withdrawal Payouts for Unforeseeable Financial Emergencies. If the Participant experiences an Unforeseeable Financial Emergency, the Participant may petition the Committee to receive a partial or full payout from the Plan. The payout shall not exceed the lesser of the Participant’s Account Balance, calculated as if such Participant were receiving a Termination Benefit, or the amount reasonably needed to satisfy the Unforeseeable Financial Emergency, including amounts necessary to pay taxes on the distributed amounts and taking into account any additional compensation that would be available if the Participant terminated his deferral election. Notwithstanding the irrevocability of the elections described in subsections 3.2, a Participant’s deferral elections shall be cancelled for the balance of the current Plan Year if the Participant receives a hardship distribution under the Employer’s 401(k) Plan or a distribution due to an Unforeseeable Financial Emergency under this Plan. Any later deferral election will be subject to the provisions of Section 3 of the Plan governing initial deferral elections.

The Participant must submit a written withdrawal request to the Plan Committee explaining the nature of the Unforeseeable Financial Emergency and the amount required to meet the need. The Participant will be required to certify that the need cannot be reasonably met from other sources. Whether a Participant is faced with an Unforeseeable Financial Emergency shall be determined by the Committee on the relevant facts and circumstances of each case, but, in any case, a distribution on account of Unforeseeable Financial Emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not cause severe financial hardship), or by cessation of deferrals under the Plan. If, subject to the sole discretion of the Committee, the petition for a payout is approved, any payout shall be made within sixty (60) days of the date of approval. The payment of any amount under this Section 4.4 shall not be subject to the Deduction Limitation.

4.5 Effect of a Change in Control. In the event of a Change in Control, the acquiring or surviving entity shall assume the Company’s obligations under the Plan. Benefits will be paid in accordance with the Participant’s Election Form and the terms of the Plan unless the Plan is earlier terminated in accordance with Section 10.7.

ARTICLE 5

Survivor Benefit

5.1 Survivor Benefit. Subject to the Deduction Limitation, if the Participant dies before he or she experiences a Separation from Service, the Participant’s Beneficiary shall be entitled to receive the Termination Benefit described in Article 6 as if Participant Separated from Service with the Company and the Election Form on file with the Company shall control the manner and timing in which Termination Benefit is paid. Should the Participant die after the Separation from Service, but before the Termination Benefit is paid in full, the Election Form on file with the Company shall control the manner and timing in which the unpaid balance of the Termination Benefit shall continue to be paid to the Beneficiary.

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ARTICLE 6

Termination Benefit

6.1 Termination Benefit. Subject to the Deduction Limitation, a Participant shall receive a Termination Benefit, which shall be equal to the Participant’s Account Balance if a Participant experiences a Separation from Service prior to his or her death or Disability.

6.2 Payment of Termination Benefit. A Participant, in connection with his or her commencement of participation in the Plan, shall elect on an Election Form to receive the Termination Benefit in a lump sum or pursuant to the Annual Installment Method. The Termination Benefit will be paid during the first Plan Year that commences following the Participant’s Separation from Service (unless the Participant elects to commence distributions starting at a specified number of years following Separation from Service as provided below). Notwithstanding anything to the contrary set forth herein, with respect to distributions to a Specified Employee as a result of a Separation from Service, whether the distribution is made in the form of a lump sum or pursuant to the Annual Installment Method, the distribution shall not be made or the payments may not begin before the date which is six (6) months following the date of the Separation from Service, or, if earlier, the date of death of the Specified Employee. Any amounts otherwise payable during the six (6) month period following the Separation from Service will accrue and be paid out as soon as administratively practicable following the (6) month delay period. Any installment payments otherwise payable after the six (6) month delay period following the Separation from Service will continue to be paid out in accordance with the original payment schedule.

6.3 Post-Termination Distribution Commencement Elections. In accordance with procedures established by the Committee, a Participant may elect on an Election Form to receive the Termination Benefit commencing either upon Separation from Service or commencing a specified number of years (up to six (6) years) following his or her Separation from Service. Notwithstanding the foregoing, a Participant’s election to receive a distribution commencing a specified number of years following Separation from Service shall be effective only if the Participant has completed at least five (5) Years of Service with the Company at the time of Separation from Service.

6.4 Changes to Termination Distribution Elections. The Participant may change his or her Termination Benefit distribution election in accordance with Section 3.2(h), to the extent such change does not accelerate the time of any scheduled payment under the Plan or fail to comply with the provisions of Code Section 409A(a)(4)(C), to an allowable alternative payout period by submitting a new Election Form to the Committee, provided that any such Election Form is accepted by the Committee, in its sole discretion. The Election Form most recently accepted by the Committee shall govern the payout of the Termination Benefit.

6.5 Default Distribution Election. If a Participant does not make any election with respect to the payment of the Termination Benefit, then such benefit shall be payable in a lump sum during the first Plan Year that commences following the Separation from Service.

ARTICLE 7

Disability Waiver and Benefit

7.1 Disability Waiver.

(a) Waiver of Deferral. If the Committee determines that a Participant is suffering from a

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Disability, the Participant’s deferral election for such Plan Year shall be terminated for the remainder of the Plan Year so that the Participant shall be excused from fulfilling that portion of the Annual Deferral Amount commitment that would otherwise have been withheld from a Participant’s Annual Base Salary, Annual Bonus and/or Directors Fees for the Plan Year during which the Participant first suffers a Disability. During the period of Disability, the Participant shall not be allowed to make any additional deferral elections.

(b) Return to Work. If a Participant returns to employment, or service as a Director, with an Employer after a Disability ceases, the Participant may elect to defer an Annual Deferral Amount for the Plan Year following his or her return to employment or service and for every Plan Year thereafter while a Participant in the Plan; provided such deferral elections are otherwise allowed and an Election Form is delivered to and accepted by the Committee for each such election in accordance with Section 3.2 above.

7.2 Disability Benefit. A Participant determined to be Disabled shall be deemed to have experienced a Separation from Service and shall receive a lump sum Disability Benefit payment equal to his or her Account Balance at the time of such determination. Such payment shall be made as soon as administratively practicable following the determination of Disability, but in no event later than ninety (90) days after such determination. Any payment made pursuant to this Section 7.2 shall be subject to the Deduction Limitation.

ARTICLE 8

Distributions

8.1 Form of Distributions

(a) Form of Distributions. Distributions of the Account Balance not including the portion of the Account Balance allocated to the Company Stock Measurement Fund shall be paid to Participants in cash. The portion of the Account Balance allocated to the Company Stock Measurement Fund shall be paid to Participant’s in an equivalent number of shares of the Company’s common stock credited to the Participant’s Account. The source of shares of Company common stock distributed pursuant to this Plan shall be the Company’s 2006 Equity Incentive Plan and any successor equity incentive plan adopted by the Company. Any portion of the Account Balance designated to be distributed in shares of Company common stock, but which are not sufficient to purchase one whole share of Company common stock shall instead be paid to the Participant in cash.

(b) Change In Company Shares. If the outstanding shares of Company common stock are hereafter changed into or exchanged for a different number or kind of shares or other securities of the Company, or of another company, by reason of a dividend, distribution, stock split, reverse stock split, stock dividend, combination or reclassification of the Company common stock, reorganization, merger, consolidation, split-up, repurchase, liquidation, dissolution, sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, exchange of common stock or other securities of the Company, or other similar corporate transaction or event, such that the Committee determines affects the Company’s common stock such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits intended to be made available under the Plan, the Committee shall make an

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appropriate and equitable adjustment to the number of shares credited to the Accounts. Any such adjustment made by the Committee shall be final and binding upon a Participant, the Company and all other interested persons.

8.2 No Discretionary Distributions. Except as expressly provided herein, the Committee shall not exercise discretion with respect to the timing or form of distributions from the Plan, but shall make distributions at the time and in the form elected by the Participant on the Election Form or as otherwise specified in the Plan. Notwithstanding anything to the contrary set forth herein, the Committee retains the right, in its sole discretion, to delay or accelerate distributions under the Plan to the extent permitted by Section 409A of the Code.

8.3 Receipt or Release. The full payment of the applicable benefit under Articles 4, 5, 6 or 7 of the Plan shall completely discharge all obligations to a Participant and his or her designated Beneficiaries under this Plan and shall be in full satisfaction of all claims for benefits under this Plan against the Committee, the Company and any Employer. The Committee may require such Participant or Beneficiary to execute a receipt and release to such effect. Any failure to execute this receipt and release by the Participant or Beneficiary will result in complete forfeiture of benefits under this Plan.

ARTICLE 9

Beneficiary Designation

9.1 Beneficiary. Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other plan of an Employer in which the Participant participates. A Participant’s designation of a spouse as a Beneficiary shall automatically be revoked following the issuance of a final judgment of divorce between the parties.

9.2 Beneficiary Designation; Change; Spousal Consent. A Participant shall designate his or her Beneficiary by completing and signing a Beneficiary Designation Form in such form as the Committee may require, and returning it to the Committee or its designated agent. A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Committee’s rules and procedures, as in effect from time to time. If the Participant names someone other than his or her spouse as a Beneficiary, a spousal consent, in the form designated by the Committee, must be signed by that Participant’s spouse (with such signature witnessed either by a notary public or a member of the Committee) and returned to the Committee. Upon the acceptance by the Committee of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be canceled. The Committee shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Committee prior to his or her death.

9.3 Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Committee or its designated agent.

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9.4 No Beneficiary Designation. If a Participant fails to designate a Beneficiary as provided in Sections 9.1, 9.2, and 9.3 above or, if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the Participant’s designated Beneficiary shall be deemed to be his or her surviving spouse. If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the executor or personal representative of the Participant’s estate.

9.5 Doubt as to Beneficiary. If the Committee has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in its discretion, to cause the Participant’s Employer to withhold such payments until this matter is resolved to the Committee’s satisfaction.

9.6 Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge all Employers and the Committee from all further obligations under this Plan with respect to the Participant.

ARTICLE 10

Acceleration of Payments

Payments under the Plan may be accelerated only upon the occurrence of an event specified in this Article 10 or in Section 4.3 or 11.2 herein.

10.1 Domestic Relations Order. A payment can be accelerated if such payment is made to an alternate payee pursuant to and following the receipt and qualification of a domestic relations order as defined in Section 414(p) of the Code.

10.2 Compliance with Ethics Agreements and Legal Requirements. A payment may be accelerated as may be necessary to comply with ethics agreements with the Federal government or as may be reasonably necessary to avoid the violation of Federal, state, local or foreign ethics law or conflicts of interest law, in accordance with the requirements of Section 409A.

10.3 Divestiture. A payment can be accelerated as may be necessary to comply with a certificate of divestiture as defined in Section 1043(b)(2) of the Code.

10.4 De Minimis Amounts. Upon the Participant’s Separation from Service, in the Company’s discretion, a payment may be accelerated if (i) the amount of the payment is not greater than Ten Thousand Dollars ($10,000) and (ii) at the time the payment is made the amount constitutes the Participant’s entire interest under the Plan and all other Account Balance Plans.

10.5 Federal Insurance Contributions Act. A payment may be accelerated to the extent required to pay the Federal Insurance Contributions Act tax imposed under Sections 3101, 3121(a) and 3121(v)(2) of the Code with respect to Compensation deferred under the Plan (the “FICA Amount”). Additionally, a payment can be accelerated to pay the income tax on wages imposed under Section 3401 of the Code on the FICA Amount and to pay the additional income tax at source on wages attributable to the pyramiding Section 3401 wages and taxes. The total payment under this Section 10.5 may not exceed the aggregate of the FICA Amount and the income tax withholding related to the FICA Amount.

10.6 Section 409A Additional Tax. A payment may be accelerated to the extent required to pay any income tax imposed under Section 409A of the Code (the “Section 409A Amount”) if at any time the Participant’s deferred compensation arrangement fails to meet the requirements of

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Section 409A of the Code. The total payment under this Section 10.6 may not exceed the Section 409A Amount.

10.7 Corporate Events. A payment may be accelerated in the Committee’s discretion in connection with any of the following events, in accordance with the requirements of Section 409A of the Code: (i) a corporate dissolution taxed under Section 331 of the Code, (ii) with the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A); (iii) in connection with a Change in Control event; (iv) the termination of the Plan and other Account Balance Plans that would be aggregated with the Plan for purposes of Section 409A of the Code pursuant to Section 11.2; and (v) such other events and conditions as permitted by Section 409A of the Code.

10.8 Offset. A payment may be accelerated in the Committee’s discretion as satisfaction of a debt of the Participant to the Company, where such debt is incurred in the ordinary course of the service relationship between the Participant and the Company, the entire amount of the reduction in any of the Company’s taxable years does not exceed $5,000, and the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant.

ARTICLE 11

Cessation of Contributions, Termination, Amendment or Modification

11.1 Cessation of Contributions. Although each Employer anticipates that it will continue contributing to the Plan for an indefinite period of time, there is no guarantee that any Employer will continue making contributions to the Plan indefinitely. Accordingly, each Employer reserves the right to discontinue funding contributions to the Plan (including the Participant’s Annual Deferral Amount, RSU Deferral Amount, and the Company Contribution Amount), by action of its board of directors. Notwithstanding the cessation of future contributions, payment of a Participant’s Account Balance shall be in accordance with the person’s Election Form and the Plan provisions.

11.2 Termination.

(a) The Plan may be terminated and liquidated at any time by the Company and payment of distributions may be accelerated, provided that, to the extent required by Section 409A (i) the termination and liquidation does not occur proximate to a downturn in the financial health of the Company; (ii) all other Account Balance Plans are terminated with respect to all Participants, (iii) no Participant Account balances are paid, other than those otherwise payable under the terms of the Plan absent a termination of the Plan, within 12 months of the termination of the Plan, (iv) all Participant Account balances are paid within 24 months of the termination of the Plan, and (v) the Company does not adopt another Account Balance Plan with respect to the Plan’s Participants at any time for a period of three years following the date of termination of the Plan.

(b) The Committee may determine that a Participant who has not had a Separation From Service shall no longer be eligible to participate in the Plan. If the Committee terminates a Participant’s eligibility to participate in the Plan prior to the Participant’s Separation From Service, then the Participant’s Account balance, if any, shall remain in the Plan and will be paid out in accordance with the terms of this Plan and the applicable deferral election.

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11.3 Amendment. The Board delegates to the Committee or its designee(s) the authority to modify, amend, or restate the Plan as appropriate in their discretion, as well as the authority to act on behalf of the Employer in discharging the duties of the Employer in administering the Plan; provided, however, that no amendment or modification shall be effective to decrease or restrict the value of a Participant’s Account Balance in existence at the time the amendment or modification is made, calculated as if the Participant had experienced a Separation from Service as of the effective date of the amendment or modification. The amendment or modification of the Plan shall not affect any Participant or Beneficiary who has become entitled to the payment of benefits under the Plan as of the date of the amendment or modification. Notwithstanding the foregoing, any Plan amendment which would materially increase the benefits to Participants, the costs of the Plan to the Company, or the Company’s liability under the Plan must be approved by the Board or its Compensation Committee.

11.4 Amendments to Comply with Section 409A. Notwithstanding any provision of the Plan to the contrary, in the event that the Company determines that any provision of the Plan may cause amounts deferred under the Plan to become immediately taxable to any Participant under Section 409A of the Code, the Company may (i) adopt such amendments to the Plan and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Company determines necessary or appropriate to preserve the intended tax treatment of the Plan benefits provided by the Plan and/or (ii) take such other actions as the Company determines necessary or appropriate to comply with the requirements of Section 409A of the Code.

ARTICLE 12

Administration

12.1 Committee Duties. Except as otherwise provided in this Article 12, this Plan shall be administered by a Committee, which shall initially consist of the Company’s Chief Financial Officer, General Counsel and Head of Human Resources. The Chief Executive Officer of the Company may remove Committee members and appoint new Committee members in the Chief Executive’s Officer’s sole discretion. Members of the Committee may be Participants under this Plan. The Committee shall also have the discretion and authority to (i) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan and (ii) decide or resolve any and all questions including interpretations of this Plan, as may arise in connection with the Plan. Any individual serving on the Committee who is a Participant shall not vote or act on any matter relating solely to himself or herself. When making a determination or calculation, the Committee shall be entitled to rely on information furnished by a Participant or the Company.

12.2 Administration Upon Change In Control. For purposes of this Plan, the Committee appointed pursuant to Section 12.1 shall be the administrator of the Plan at all times prior to the occurrence of a Change in Control. Upon and after the occurrence of a Change in Control, the “Committee” that shall administer the Plan shall be an independent third party selected by the trustee of the Trust and approved by the individual who, immediately prior to such event, was the Company’s Chief Executive Officer or, if not available or willing to assume such responsibility, the Company’s highest ranking officer (the “Ex-CEO”). The Committee shall have the discretionary power to determine all questions arising in connection with the administration of the Plan and the interpretation of the Plan and Trust including, but not limited to benefit entitlement determinations; provided, however, upon and after the occurrence of a Change in Control, the

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Committee shall have no power to direct the investment of Plan or Trust assets or select any investment manager or custodial firm for the Plan or Trust. Upon and after the occurrence of a Change in Control, the Company must: (1) pay all reasonable administrative expenses and fees of the Committee administrator; (2) indemnify the Committee administrator against any costs, expenses and liabilities including, without limitation, attorney’s fees and expenses arising in connection with the performance of the Committee hereunder, except with respect to matters resulting from the gross negligence or willful misconduct of the Committee or its employees or agents; and (3) supply full and timely information to the Committee or all matters relating to the Plan, the Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the date of circumstances of the Disability, death or Separation from Service of the Participants, and such other pertinent information as the Committee administrator may reasonably require. Upon and after a Change in Control, the Committee administrator may be terminated (and a replacement appointed) by the Trustee only with the approval of the Ex-CEO. Upon and after a Change in Control, the Committee administrator may not be terminated by the Company.

12.3 Agents. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to any Employer.

12.4 Binding Effect of Decisions. The decision or action of the Committee with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

12.5 Indemnity of Committee. All Employers shall indemnify and hold harmless the members of the Committee, and any Employee to whom the duties of the Committee may be delegated against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Committee, any of its members, or any such Employee.

12.6 Employer Information. To enable the Committee to perform its functions, the Company and each Employer shall supply full and timely information to the Committee, as the case may be, on all matters relating to the compensation of its Participants, the date and circumstances of the Disability, death or Separation from Service of its Participants, and such other pertinent information as the Committee may reasonably require.

ARTICLE 13

Other Benefits and Agreements; Claims Procedures

13.1 Coordination with Other Benefits. The benefits provided for a Participant and Participant’s Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Participant’s Employer. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.

13.2 Claims Procedures. The claims procedures set forth on Appendix A shall apply for all benefits payable under the Plan except for Disability benefits. The claims procedures applicable to Disability benefits are set forth on Appendix B. The Committee is the “Plan Administrator” for purposes of the Plan’s claims procedures.

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ARTICLE 14

Securities Laws Compliance

14.1 Designation of Participants. Notwithstanding anything to the contrary set forth herein, with respect to any Employee or Director who is then subject to Section 16 of the Exchange Act, only the Board or its Compensation Committee may designate such Employee or Director as eligible to participate in the Plan.

14.2 Action by Committee. With respect to any Participant who is then subject to Section 16 of the Exchange Act, notwithstanding anything to the contrary set forth herein, any function of the Committee under the Plan relating to such Participant shall be performed solely by the Board or its Compensation Committee, if and to the extent required to ensure the availability of an exemption under Section 16 of the Exchange Act for any transaction relating to such Participant under the Plan.

14.3 Compliance with Section 16. Notwithstanding any other provision of the Plan or any rule, instruction, election form or other form, the Plan and any such rule, instruction or form shall be subject to any additional conditions or limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, such provision, rule, instruction or form shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

ARTICLE 15

Trust

15.1 Establishment of the Trust and Selection of Trustee. The Committee shall establish the Trust under which the funds of the Plan shall be held and appoint one or more trustees under a trust agreement approved by the Committee and entered into by the Company and such trustee. Except as provided pursuant to Section 11.1, each Employer shall at least annually transfer over to the Trust such assets as the Employer determines, in its sole discretion, are necessary to provide, on a present value basis, for its respective future liabilities created with respect to the Company Contribution Amounts, RSU Deferral Amount and Annual Deferral Amounts for such Employer’s Participants for all periods prior to the transfer, as well as any debits and credits to the Participants’ Account Balances for all periods prior to the transfer, taking into consideration the value of the assets in the trust at the time of the transfer.

15.2 Interrelationship of the Plan and the Trust. The provisions of the Plan and the Election Form shall govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust shall govern the rights of the Employers, Participants and the creditors of the Employers to the assets transferred to the Trust. Each Employer shall at all times remain liable to carry out its obligations under the Plan.

15.3 Distributions From the Trust. Each Employer’s obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Employer’s obligations under this Plan.

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ARTICLE 16

Plan Expenses

16.1 Plan Expenses. All expenses incurred in the administration of the Plan shall be paid out of the Trust assets in the manner determined by the Committee unless the Board authorizes such expenses to be paid by the Company.

ARTICLE 17

Miscellaneous

17.1 Status of Plan. The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employee” within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent.

17.2 Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of an Employer. For purposes of the payment of benefits under this Plan, any and all of an Employer’s assets shall be, and remain, the general, unpledged unrestricted assets of the Employer. An Employer’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.

17.3 Employer’s Liability. An Employer’s liability for the payment of benefits shall be defined only by the Plan and the Election Form, as entered into between the Employer and a Participant. An Employer shall have no obligation to a Participant under the Plan except as expressly provided in the Plan and his or her Election Form.

17.4 Nonassignability. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise.

17.5 Not a Contract of Employment. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between any Employer and the Participant. Such employment is hereby acknowledged to be an “at will” employment relationship that can be terminated at any time for any reason, or no reason, with or without cause, and with or without notice, unless expressly provided in a written employment agreement. Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of any Employer, either as an Employee or a Director, or to interfere with the right of any Employer to discipline or discharge the Participant at any time.

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17.6 Furnishing Information. A Participant or his or her Beneficiary will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee may deem necessary.

17.7 Terms. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.

17.8 Captions. The captions of the articles, sections and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

17.9 Governing Law. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the State of California without regard to its conflicts of laws principles.

17.10 Notice. Any notice or filing required or permitted to be given to the Committee under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:

General Counsel or Chief Financial Officer

Sequenom, Inc.

3595 John Hopkins Court

San Diego, CA

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.

17.11 Successors. The provisions of this Plan shall bind and inure to the benefit of the Company, the Participant’s Employer and its successors and assigns and the Participant and the Participant’s designated Beneficiaries.

17.12 Validity. In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.

17.13 Incompetent. If the Committee determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.

17.14 Court Order. The Committee is authorized to make any payments directed by court order in

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any action in which the Plan or the Committee has been named as a party. In addition, if a court determines that a spouse or former spouse of a Participant has an interest in the Participant’s benefits under the Plan in connection with a property settlement or otherwise, the Committee, in its sole discretion, shall have the right, notwithstanding any election made by a Participant, to immediately distribute the spouse’s or former spouse’s interest in the Participant’s benefits under the Plan to that spouse or former spouse.

17.15 Insurance. The Employers, on their own behalf or on behalf of the trustee of the Trust, and, in their sole discretion, may apply for and procure insurance on the life of the Participant, in such amounts and in such forms as the Trust may choose. The Employers or the trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such insurance. The Participant shall have no interest whatsoever in any such policy or policies, and at the request of the Employers shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to whom the Employers have applied for insurance.

17.16 Legal Fees To Enforce Rights After Change in Control. The Company and each Employer is aware that upon the occurrence of a Change in Control, the Board or the board of directors of a Participant’s Employer (which might then be composed of new members) or a shareholder of the Company or the Participant’s Employer, or of any successor corporation might then cause or attempt to cause the Company, the Participant’s Employer or such successor to refuse to comply with its obligations under the Plan and might cause or attempt to cause the Company or the Participant’s Employer to institute, or may institute, litigation seeking to deny Participants the benefits intended under the Plan. In these circumstances, the purpose of the Plan could be frustrated. Accordingly, if, following a Change in Control, it should appear to any Participant that the Company, the Participant’s Employer or any successor corporation has failed to comply with any of its obligations under the Plan or any agreement hereunder or, if the Company, such Employer or any other person takes any action to declare the Plan void or unenforceable or institutes any litigation or other legal action designed to deny, diminish or to recover from any Participant the benefits intended to be provided, then the Company and the Participant’s Employer irrevocably authorize such Participant to retain counsel of his or her choice at the expense of the Company and the Participant’s Employer (who shall be jointly and severally liable) to represent such Participant in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company, the Participant’s Employer or any director, officer, shareholder or other person affiliated with the Company, the Participant’s Employer or any successor thereto in any jurisdiction. Notwithstanding anything in this Section or the Plan to the contrary, the Company and/or the Participant’s employer shall have no obligation under this Section to the extent there is a judicial determination or final mediation decision that the litigation or other legal action brought by the Participant is frivolous.

17.17 Scrivener’s Error. Notwithstanding any other provision of this Plan to the contrary, if there is a scrivener’s error in properly transcribing this Plan document, it shall not be a violation of the Plan terms to operate the Plan in accordance with its proper provisions, rather than in accordance with the terms of the Plan document, pending correction of the Plan document through an amendment. In addition, any provisions of the Plan document improperly added as a result of scrivener’s error shall be considered null and void as of the date such error occurred.

17.18 Compliance with Section 409A of the Code. This Plan is intended to comply with the requirements of Section 409A of the Code. The Committee shall interpret the Plan provisions in a manner consistent with the requirements of Section 409A of the Code. To the extent one or

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more provisions of this Plan do not comply with Section 409A of the Code, such provision shall be automatically and immediately voided, and shall be amended as soon as administratively feasible and shall be administered to so comply.

17.19 Disclaimer. It is the parties intention that this arrangement comply with the provisions of Code Section 409A. Notwithstanding the foregoing or anything else to the contrary in the Plan, the Company shall have no liability to any Participant should any provision of the Plan fail to satisfy Code Section 409A.

IN WITNESS WHEREOF, the Company has signed this amended Plan document as of December 18, 2008.

“Company”

Sequenom, Inc., a Delaware corporation

By:     /s/ Alisa Judge                        

Title:     VP Human Resources                    

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APPENDIX A

CLAIMS PROCEDURES

The following claims procedures shall apply for all benefits payable under the Plan except for Disability benefits. The claims procedures applicable to Disability benefits are set forth on Appendix B.

(a) Applications for Benefits and Inquiries. Any application for benefits, inquiries about the Plan or inquiries about present or future rights under the Plan must be submitted to the Plan Administrator in writing by an applicant (or his or her authorized representative).

(b) Adverse Benefit Determination. In the event that any application for benefits receives an Adverse Benefit Determination, as defined in Appendix B, the Plan Administrator must provide the applicant with written or electronic notice of the Adverse Benefit Determination, and of the applicant’s right to review the Adverse Benefit Determination. Any electronic notice will comply with the regulations of the U.S. Department of Labor. The notice of Adverse Benefit Determination will be set forth in a manner designed to be understood by the applicant and will include the following:

(i) the specific reason or reasons for the Adverse Benefit Determination;

(ii) references to the specific Plan provisions upon which the Adverse Benefit Determination is based;

(iii) a description of any additional information or material that the Plan Administrator needs to complete the review and an explanation of why such information or material is necessary; and

(iv) an explanation of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA following an Adverse Benefit Determination on review of the claim, as described below.

This notice of an Adverse Benefit Determination will be given to the applicant within a reasonable period of time, but not later than ninety (90) days after the Plan Administrator receives the application, unless special circumstances require an extension of time; in which case the Plan Administrator has up to an additional ninety (90) days for processing the application. If an extension of time for processing is required, written notice of the extension will be furnished to the applicant before the end of the initial ninety (90) day period.

This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the application.

(c) Request for a Review. Any person (or that person’s representative) for whom there is an Adverse Benefit Determination may appeal the Adverse Benefit Determination by submitting a request for a review to the Plan Administrator within sixty (60) days after the date of the Adverse Benefit Determination. A request for a review shall be in writing and shall be addressed to the Plan Administrator.

A request for review must set forth all of the grounds on which it is based, all facts in support of the request and any other matters that the applicant feels are pertinent. The applicant (or his or

her representative) shall have the opportunity to submit (or the Plan Administrator may require the applicant to submit) written comments, documents, records and other information relating to his or her claim. The applicant (or his or her representative) shall be provided, upon request and free of charge, reasonable access to, and copies of, the Relevant Records, as defined in Appendix B. The review shall take into account all Relevant Records and other information submitted by the applicant (or his or her representative) relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

(d) Decision on Review. The Plan Administrator will act on each request for review within a reasonable period of time, but not later than sixty (60) days after receipt of the request, unless special circumstances require an extension of time (not to exceed an additional sixty (60) days), for processing the request for a review. If an extension for review is required, written notice of the extension will be furnished to the applicant within the initial sixty (60) day period. This notice of extension will describe the special circumstances necessitating the additional time and the date by which the Plan Administrator is to render its decision on the review. If the extension of review is due to the applicant’s failure to submit information necessary to decide a claim, the period for making the decision on review shall be tolled from the date on which the notification of the extension is sent to the application until the date on which the applicant responds to the request for additional information.

(e) Denial of Appeal. The Plan Administrator will give prompt, written or electronic notice of its decision to the applicant. Any electronic notice will comply with the regulations of the U.S. Department of Labor. In the event of an Adverse Benefit Determination by the Plan Administrator that confirms the original Adverse Benefit Determination, the notice will set forth, in a manner calculated to be understood by the applicant, the following:

(i) the specific reason or reasons for the Adverse Benefit Determination;

(ii) references to the specific Plan provisions upon which the Adverse Benefit Determination is based;

(iii) a statement that the applicant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all Relevant Records; and

(iv) a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA.

(f) Rules and Procedures. The Plan Administrator will establish rules and procedures, consistent with the Plan and with ERISA, as necessary and appropriate in carrying out its responsibilities in reviewing benefit claims. The Plan Administrator may require an applicant who wishes to submit additional information in connection with an appeal from the denial of benefits to do so at the applicant’s own expense.

(g) Exhaustion of Remedies. No legal action for benefits under the Plan may be brought until the applicant (i) has submitted a written application for benefits in accordance with the procedures described above, (ii) has been notified by the Plan Administrator that the application is denied, (iii) has filed a written request for a review of the application in accordance with the appeal procedure described above, and (iv) has been notified in writing that the Plan Administrator has denied the appeal.

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APPENDIX B

DISABILITY CLAIMS PROCEDURES

The following claim procedures shall apply only for Disability benefits payable under the Plan. An Authorized Representative may act on a Claimant’s behalf in pursuing a benefit claim or appeal of an Adverse Benefit Determination.

1. Definitions.

A. “Adverse Benefit Determination” means any of the following:

(ii) a denial, reduction, or termination of a benefit by the Plan, or a failure of the Plan to provide or make payment (in whole or in part) for a benefit; and

(iii) a denial, reduction, or termination of a benefit by the Plan, or a failure of the Plan to provide or make payment (in whole or in part) for a benefit resulting from the application of any utilization review.

B. “Authorized Representative” means an individual who is authorized to represent a Claimant with respect to any claims or appeals filed pursuant to these procedures. Whether an individual is an Authorized Representative will be determined by the Plan Administrator in accordance with reasonable procedures established by the Plan.

C. “Claimant” means a Participant or his or her beneficiary who has submitted a claim for benefits in accordance with these claims procedures.

D. “Disability Claim” means a claim for benefits under the Plan for which the claimant must show disability and the Plan Administrator must find make a determination of disability in order for the Claimant to receive benefits.

E. “Health Care Professional” means a physician or other health care professional who is licensed, accredited, or certified to perform specified health services consistent with applicable state law.

F. “Relevant Records” means any document, record, or other information that:

(i) the Plan Administrator relied upon in making a benefit determination for the Claimant’s claim;

(ii) was submitted, considered, or generated in the course of making the benefit determination for a claim, without regard to whether such document, record, or other information was relied upon in making the benefit determination;

(iii) demonstrates compliance with the administrative processes and safeguards required pursuant to Department of Labor Regulations in making the benefit determination for a claim; or

(iv) constitutes a statement of policy or guidance with respect to the Plan concerning the denied treatment option or benefit for a Claimant’s diagnosis, without regard to whether such advice or statement was relied upon in making the benefit determination.

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2. Claims Procedure- Disability Claims. In the case of a Disability Claim, the Plan Administrator will notify the Claimant of the Plan’s Adverse Benefit Determination within a reasonable time, but not later than forty-five (45) days after the Plan receives the claim. The Plan may extend this period for up to thirty (30) days, provided that the Plan Administrator both (i) determines that such an extension is necessary due to matters beyond the control of the Plan, and (ii) notifies the Claimant, prior to the expiration of the initial forty-five (45) day period, of the circumstances requiring the extension of time and the date by which the Plan expects to make a decision.

If, prior to the end of the first thirty (30) day extension period, the Plan Administrator determines that, due to matters beyond the control of the Plan, a decision cannot be rendered within the first thirty (30) day extension period, the period for making a determination may be extended for an additional thirty (30) days. Such additional extension is permitted only if (i) the Plan Administrator notifies the Claimant, prior to the end of the first thirty (30) day extension, of the circumstances requiring the second thirty (30) day extension and (ii) the Plan Administrator notifies the Claimant of the date the Plan expects to render the decision.

Any notice of extension will explain the standards on which the Claimant’s entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim, and the additional information needed to resolve these issues. A Claimant will be given at least forty-five (45) days to provide the requested information.

3. Calculating Time Periods For Claims Procedure. The time within which a benefit determination is required to be made will begin at the time a claim is filed in accordance with these procedures, without regard to whether all the information necessary to make a benefit determination accompanies the filing. In the event that the time within which a benefit determination is required to be made is extended due to the Claimant’s failure to submit information necessary to decide a claim, the period for making the benefit determination will be suspended from the date on which the Plan Administrator sends the notification of extension to the Claimant until the date on which the Claimant responds to the request for additional information.

4. Notice of Benefit Determination. The Plan Administrator will provide the Claimant with written or electronic notification of any Adverse Benefit Determination. If the notice of an Adverse Benefit Determination is provided electronically, such notice will comply with the standards imposed by the Department of Labor Regulations.

Any notice of Adverse Benefit Determination will set forth, in a manner calculated to be understood by the Claimant:

A. the specific reason or reasons for the Adverse Benefit Determination;

B. references to the specific Plan provisions on which the Adverse Benefit Determination is based;

C. a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary;

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D. a description of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an Adverse Benefit Determination on review; and

E. if an internal rule, guideline, protocol, or other similar criterion was relied upon in making the Adverse Benefit Determination, either (i) the specific rule, guideline, protocol, or other similar criterion, or (ii) a statement that such a rule, guideline, protocol, or other similar criterion was relied upon in making the Adverse Benefit Determination and that a copy of such rule, guideline, protocol, or other criterion will be provided free of charge to the Claimant upon request.

5. Review Procedure. If the Claimant receives an Adverse Benefit Determination, the Claimant may appeal the Adverse Benefit Determination within one hundred eighty (180) days after the Claimant’s receipt of the notice of Adverse Benefit Determination. The Claimant must make any appeal in writing. The appeal must be addressed to the Review Panel of the Plan Administrator.

During the one hundred eighty (180) day period, the Claimant may:

A. submit written comments, documents, records, and other information relating to the claim for benefits; and

B. request and receive, free of charge, reasonable access to, and copies of, all Relevant Records.

The Review Panel shall consist of one or more individuals who are neither the individuals who made the initial Adverse Benefit Determination, nor the subordinate of any of such individuals. The review of the Claimant’s appeal will not give deference to the initial Adverse Benefit Determination. The review will take into account all comments, documents, records, and other information that the Claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

In deciding the appeal of an Adverse Benefit Determination that is based in whole or in part on a medical judgment, the Review Panel will consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment. Such health care professional must be an individual who is neither the individual who was consulted in connection with the initial Adverse Benefit Determination, nor the subordinate of such individual.

The Review Panel will provide the Claimant with the identification of medical or vocational experts whose advice was obtained on behalf of the Plan in connection with the Claimant’s Adverse Benefit Determination, without regard to whether the advice was relied upon in making the benefit determination.

6. Timing of Notice of Benefit Determination on Review. In the case of a Disability Claim, the Plan Administrator will notify the Claimant of the Plan’s benefit determination on review within a reasonable period, but not later than forty-five (45) days after the Plan receives the Claimant’s request for review of an Adverse Benefit Determination. The Plan Administrator may extend this period for up to an additional forty-five (45) days if the Plan Administrator determines that special circumstances exist, such as the need to hold a hearing.

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If the Plan Administrator determines that an extension is required, the Plan Administrator will provide the Claimant written notice of the extension before the end of the initial forty-five (45) day period. The extension notice will describe the special circumstances requiring the extension and the date by which the Plan expects to make a decision on the Claimant’s appeal.

7. Calculating Time Periods for Review Procedure. The period of time within which a benefit determination on review is required to be made shall begin at the time an appeal is filed in accordance with subsection (e), without regard to whether all the information necessary to make a benefit determination on review accompanies the filing.

8. Notice of Benefit Determination on Review. The Plan Administrator will provide the Claimant with written or electronic notification of the Plan’s benefit determination on review. Any electronic notification shall comply with the Department of Labor Regulations.

In the case of an Adverse Benefit Determination, the notification will set forth, in a manner calculated to be understood by the Claimant:

A. the specific reason or reasons for the Adverse Benefit Determination;

B. reference to the specific Plan provisions on which the benefit determination is based;

C. a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all Relevant Records;

D. a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA; and

E. if an internal rule, guideline, protocol, or other similar criterion was relied upon in making the Adverse Benefit Determination, either the specific rule, guideline, protocol, or other similar criterion, or a statement that such rule, guideline, protocol, or other similar criterion was relied upon in making the Adverse Benefit Determination and that a copy of the rule, guideline, protocol, or other similar criterion will be provided free of charge to the Claimant upon request.

9. Administration. The Administrator will establish rules and procedures, consistent with the Plan and with ERISA, as necessary and appropriate in carrying out its responsibilities in reviewing benefit claims. The Administrator may require an applicant who wishes to submit additional information in connection with an appeal from the denial of benefits to do so at the applicant’s own expense.

10. Exhaustion of Remedies. No legal action for benefits under the Plan may be brought until the Claimant (i) has submitted a written application for benefits in accordance with the procedures described above, (ii) has been notified by the Administrator that the application is denied, (iii) has filed a written request for a review of the application in accordance with the appeal procedure described above, and (iv) has been notified in writing that the Administrator has denied the appeal

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EX-21.1

Exhibit 21.1

SUBSIDIARIES OF THE REGISTRANT

Sequenom — Gemini, Ltd.	England and Wales
Gemini Genomics, (UK) Ltd.	England and Wales
Gemini Genomics, Ltd.	England and Wales
Sequenom GmbH	Germany
Sequenom K.K.	Japan
Sequenom Hong Kong, Ltd	Hong Kong
Sequenom Biosciences (India) Pvt. Ltd	India
Sequenom Center for Molecular Medicine, LLC	United States

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 333-152230, 333-134906, 333-125456, 333-112322, 333-102769, 333-99629, 333-90778, 333-69706, 333-67332 and 333-95797 and Form S-3 Nos. 333-151837, 333-147146, 333-135015 and 333-112323) of Sequenom, Inc., and in the related prospectuses of our reports dated March 6, 2009, with respect to the consolidated financial statements and schedule of Sequenom, Inc. and the effectiveness of internal control over financial reporting of Sequenom, Inc., included in this Annual Report (Form 10-K) for the year ended December 31, 2008.

/s/ ERNST & YOUNG LLP

San Diego, California

March 6, 2009

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Harry Stylli, certify that:

1. I have reviewed this annual report on Form 10-K for the year ended December 31, 2008 of Sequenom, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

d) disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of this annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 12, 2009	/S/    HARRY STYLLI
	Harry Stylli President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Paul Hawran, certify that:

1. I have reviewed this annual report on Form 10-K for the year ended December 31, 2008 of Sequenom, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

d) disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of this annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 12, 2009	/S/    PAUL HAWRAN
	Paul Hawran Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.§ 1350, as adopted), Harry Stylli, President and Chief Executive Officer of Sequenom, Inc. (the “Company”), hereby certify that, to the best of his knowledge:

1. The Company’s Annual Report on Form 10-K for the period ended December 31, 2008, to which this Certification is attached as Exhibit 32 (the “Annual Report”) fully complies with the requirements of section 13(a) or section 15(d), as applicable, of the Securities Exchange Act of 1934, and

2. The information contained in the Annual Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Annual Report, and the results of operations of the Company for the period covered by the Annual report.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission (“SEC”) or its staff upon request.

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the SEC and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Annual Report), irrespective of any general incorporation language contained in such filing.

IN WITNESS WHEREOF, the undersigned has set his hand hereto as of the 12th day of March, 2009.

/S/    HARRY STYLLI        

Harry Stylli

President and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.§ 1350, as adopted), Paul Hawran, Principal Financial and Accounting Officer of Sequenom, Inc. (the “Company”), hereby certify that, to the best of his knowledge:

1. The Company’s Annual Report on Form 10-K for the period ended December 31, 2008, to which this Certification is attached as Exhibit 32 (the “Annual Report”) fully complies with the requirements of section 13(a) or section 15(d), as applicable, of the Securities Exchange Act of 1934, and

2. The information contained in the Annual Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Annual Report, and the results of operations of the Company for the period covered by the Annual report.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission (“SEC”) or its staff upon request.

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the SEC and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Annual Report), irrespective of any general incorporation language contained in such filing.

IN WITNESS WHEREOF, the undersigned has set his hand hereto as of the 12th day of March, 2009.

/S/    PAUL HAWRAN        

Paul Hawran

Chief Financial Officer

(Principal Financial and Accounting Officer)