Lead Plaintiff Deadline: 10/27/2020
SUMMARY OF CASE:
A securities class action has been filed against Progenity, Inc. (PROG) on behalf of all purchasers of Progenity common stock pursuant and/or traceable to the registration statement, as amended, issued in connection with Progenity’s June 2020 IPO. This case has been filed in the USDC – S.D.CA.
Progenity is a biotechnology company based in San Diego, California. It specializes in developing and commercializing molecular testing products and precision medicine applications. The Company provides in vitro molecular tests designed to assist parents in making informed decisions related to family planning, pregnancy, and complex disease diagnosis.
On or about June 22, 2020, defendants conducted Progenity’s IPO. In the IPO, defendants sold over 6.6 million shares of Progenity common stock to the investing public at a price of $15 per share, generating over $100 million in gross offering proceeds.
The Complaint alleges that te Registration Statement for the IPO was negligently prepared and, as a result, contained untrue statements of material fact, omitted material facts necessary to make the statements contained therein not misleading, and failed to make the necessary disclosures required under the rules and regulations governing its preparation. Specifically, the Registration Statement failed to disclose, inter alia, the following adverse facts that existed at the time of the IPO, rendering numerous statements provided therein materially false and misleading: (i) 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; (ii) 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 (iii) 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.
Shortly after the IPO, the price of Progenity stock suffered significant price declines. By August 14, 2020, Progenity stock closed at just $7.71 per share –
nearly 50% below the $15 per share price investors paid for the stock in the IPO less than two months previously.