The lawsuit, filed by Levi & Korsinsky, LLP, alleges that GeneDx leadership misled shareholders by touting the integration and performance of Fabric Genomics while internal data suggested the technology was failing to gain traction in the domestic market. According to the complaint, defendants maintained positive public representations about revenue and margin growth even as they possessed non-public information indicating the integration was faltering.

Financial markers cited in the complaint highlight the discrepancy between public outlooks and internal realities. During the period in question, reimbursement rates per test dropped from $3,800 to $3,300, and adjusted gross margins fell from 74% to 69%. The company eventually recorded an 85% impairment on the $36.5 million acquisition cost of Fabric Genomics, coupled with a $65 million reduction in full-year revenue guidance. Analysts, including Canaccord Genuity’s Kyle Mikson, have noted that these setbacks appear systemic, casting doubt on the timeline of the company’s recovery to historical growth rates.