The satellite that made up the secondary cargo of SpaceX's latest orbital mission has burnt up in the Earth's atmosphere after failing to make it into the correct orbit.

The OG2 satellite, a prototype communications platform built by Orbcomm, was carried by the Falcon rocket as a secondary payload and was due to be boosted up into a higher orbit once the primary payload, SpaceX's Dragon capsule containing supplies for the International Space Station, had been delivered.

Unfortunately for the satellite communications company, the Falcon rocket suffered "an anomaly," as SpaceX put it, 79 seconds after launch. A nozzle on one of the craft's nine Merlin engines blew out, forcing the controllers to shut down the power from that unit. The other eight engines successfully got the Dragon capsule into orbit and the ISS picked up its cargo as specified.

The Falcon was then due to make a second burn to get the OG2 satellite up to its required orbit, but safety regulations forced NASA to call a halt to any further orbital maneuvers. Orbcomm investigated using the satellite's own propulsion systems to get it into the right orbit, but instead opted to use the lower orbit for four days of testing, which the company proclaimed was a success.

"The solar array and communications payload antenna deployments were successful, along with verifying the performance of various components of both the OG2 satellite bus and the communications payload," the company said in a statement.

"The OG2 satellite bus systems including power, attitude control, thermal and data handling were also tested to verify proper operation. The unique communications payload, which incorporates a highly reprogrammable software radio with common hardware for both gateway and subscriber messaging, also functioned as expected."

The company said it has now written the satellite off as a mission failure and has filed an insurance claim for $10m, which should cover the cost of manufacture and launch. The satellite has been de-orbited: boosted down into the planet's atmosphere where it was burnt up by the friction of reentry.

Orbcomm will now focus on its next launches, with will also use SpaceX's Falcon 9 rocket. Two more launches are planned for 2013 and 2014 to carry Orbcomm's satellites, this time as the primary payload.

"We appreciate the complexity and work that SpaceX put into this launch," stated Marc Eisenberg, Orbcomm's CEO. "SpaceX has been a supportive partner, and we are highly confident in their team and technology." ®