GeneDx faces securities class action after 49% stock decline

Kahn Swick & Foti LLC filed a securities class action against GeneDx Holdings Corp. on behalf of investors who bought shares between April 16, 2025 and May 4, 2026, alleging the company misled the market about its acquisition of Fabric Genomics.

"The Company also disclosed a $31.2 million impairment loss attributable to its prior acquisition of Fabric Genomics, an AI-driven genomic interpretation company, which the Company had touted as expected to expand its addressable market through multiple scalable revenue streams," the complaint states.

GeneDx shares plunged $33.42, or 49.2%, on May 4 after the company reported first-quarter results that missed revenue estimates for both its exome and genome sequencing lines. Adjusted gross margin fell to 69% from 74% a year earlier. The company also cut its full-year revenue forecast to $475 million to $490 million, down from a prior range of $540 million to $550 million.

The lawsuit, filed in the US District Court for the District of Connecticut, alleges that GeneDx and certain executives made false statements about the benefits of the Fabric Genomics acquisition. Throughout the class period, the company said the deal would improve financials and create operational efficiencies, with one executive stating there was "room to run in terms of reducing COGS in the future by combining the best of capability between GeneDx and Fabric."

The $31.2 million impairment represents a roughly 94% write-down of the acquisition's value, according to the complaint. Investors who purchased shares during the class period have until Aug. 3 to file lead plaintiff applications.

The 49% single-day decline erased more than $1 billion in market value and puts GeneDx shares at their lowest level since early 2025. The lead plaintiff deadline on Aug. 3 will determine which investor group directs the litigation, with potential damages tied to the stock's recovery trajectory.

This article is for informational purposes only and does not constitute investment advice.