NEW YORK,, Sept. 01, 2020 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Progenity, Inc. (“Progenity” or the “Company”) (NASDAQ: PROG) in the United States District Court for the Southern District of California on behalf of persons and entities that purchased or otherwise acquired Progenity, Inc. 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.  The lawsuit seeks to recover damages for Progenity investors under the federal securities laws.

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.

The Complaint 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, the Complaint alleges that 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.

Investors who purchased or otherwise acquired shares of Progenity during the Class Period should contact the Firm prior to the October 27, 2020 lead plaintiff motion deadline.  A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.  If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.

Please visit our website at http://www.gme-law.com for more information about the firm.

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