NEW YORK - (NewMediaWire) - October 19, 2020 - Faruqi & Faruqi, LLP, a leading minority and certified woman-owned national securities law firm, is investigating claims against Progenity, Inc. (“Progenity” or the “Company”) (NASDAQ:PROG) and reminds investors of the October 27, 2020 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you suffered losses exceeding $20,000 on purchases of Progenity stock between June 19, 2020 and September 19, 2020 and would like to discuss your legal rights, click here: www.faruqilaw.com/PROG. There is no cost or obligation to you.
You can also contact Faruqi & Faruqi partner James Wilson toll free at 877-247-4292 or 212-983- 9330 (Ext. 1310) or by emailing him at email@example.com to discuss your rights and options.
The lawsuit has been filed in the U.S. District Court for the Southern District of California on behalf of all those who purchased Progenity securities pursuant and/or traceable to the Company’s June 2020 Initial Public Offering (“IPO”). The case, Soe v. Progenity, Inc. et al, No. 20-cv-01683 was filed on August 28, 2020, and has been assigned to Judge William Q. Hayes.
As detailed below, the lawsuit focuses on whether the Company’s Registration Statement filed in connection with the June 2020 IPO 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: (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.
Specifically, on or around June 19, 2020, Progenity conducted its IPO, selling 6.8 million shares priced at $15.00 per share. Then, on August 13, 2020, Progenity issued a press release announcing the Company’s financial results for the second quarter of 2020. Among other results, Progenity announced revenue of $17.27 million for the quarter, which missed consensus estimates by approximately $8.92 million. Progenity advised investors that “second-quarter revenues reflected a $10.3 million accrual for refunds to government payors” in connection with a settlement with the U.S. Department of Justice and participating states to resolve claims that Progenity had fraudulently billed federal healthcare programs for prenatal tests and provided kickbacks to physicians to induce to them to order Progenity tests for their patients.
On this news, Progenity’s stock price fell from a closing price of $8.95 per share on August 13, 2020 to $7.71 per share on August 14, 2020—a $1.24 or 13.85% drop and nearly 50% below the $15 price investors paid for the stock in the IPO less than two months previously.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Progenity’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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