The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of California on behalf of those who acquired Progenity, Inc. (“Progenity” or the “Company”) (NASDAQ: PROG) common stock pursuant and/or traceable to the Registration Statement issued in connection with the Company’s initial public offering ("IPO") conducted in June 2020. Investors have until October 27, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
In June 2020, Progenity completed its IPO, in which it sold approximately 6.7 million shares for $15.00 per share.
On August 13, 2020, Progenity announced its second quarter 2020 results in a press release. Therein, the Company disclosed that "second-quarter revenues reflected a $10.3 million accrual for refunds to government payors," related to a settlement with the U.S. Department of Justice and several states to resolve claims that Progenity had fraudulently billed federal healthcare programs for prenatal tests and provided kickbacks to physicians to induce them to order Progenity tests for their patients. On this news, the Company’s share price fell $1.24, or 14%, to close at $7.71 per share on August 14, 2020.
The complaint filed in this class action alleges that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Progenity had overbilled government payors by $10.3 million in 2019 and early 2020 and, thus, had materially overstated its revenues, earnings and cash flows from operations for the historical financial periods provided in the Registration Statement; (2) that Progenity would need to refund this overpayment in the second quarter of 2020 (the same quarter in which the IPO was conducted), adversely impacting its quarterly results; and (3) that Progenity was suffering from accelerating negative trends in the second quarter of 2020 with respect to the Company’s testing volumes, revenues and product pricing.
If you acquired Progenity securities, have information, or would like to learn more about these claims, please contact Thomas W. Elrod of Kirby McInerney at 212-371-6600, by email at firstname.lastname@example.org, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.