PHILADELPHIA, PA / ACCESSWIRE / December 7, 2022 / Berger Montague advises investors that a securities fraud class action lawsuit has been filed against NeoGenomics, Inc. ("NeoGenomics") (NASDAQ:NEO) on behalf of those who purchased publicly traded NeoGenomics, Inc. securities between February 27, 2020 and April 26, 2022, inclusive (the "Class Period").
Investor Deadline: Investors who purchased or acquired NeoGenomics securities during the Class Period may, no later than February 6, 2023, seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation, please contact Berger Montague: James Maro at [email protected] or (215) 875-3093, or Andrew Abramowitz at [email protected] or (215) 875-3015 or visit: https://investigations.bergermontague.com/neogenomics-inc/
NeoGenomics provides cancer tests and testing services to doctors, clinics, hospitals, and pharmaceutical companies. Among its portfolio of tests are next generation sequencing ("NGS") tests. NGS tests have become popular with pathologists in recent years because they can test multiple genes of a cancer simultaneously, making them more cost effective and efficient than older legacy tests that only look for a single specific genetic mutation.
According to the complaint, NeoGenomics consistently misrepresented to investors that it had a "comprehensive menu" of cancer tests that positioned it as a "one-stop-shop" for pathologists that needed cancer testing. Further, NeoGenomics asserted that it could "leverage" the supposedly "fixed cost" structure of its business to improve profitability as revenue increased.
On November 4, 2021, NeoGenomics disclosed that it "accrued a reserve of $10.5 million for potential damage and liabilities associated with the federal healthcare program revenue received spanning multiple years." Following this news, the price of NeoGenomics common stock fell $8.18 per share, or 17.6%, from $46.53 per share on November 3, 2021 to $38.35 per share at the close of trading on November 4, 2021.
Then, on April 27, 2022, NeoGenomics reported its first-quarter 2022 financial results including that revenue for the quarter was $117 million and EBITDA loss was $19 million, that "[c]onsolidated gross profit for the first quarter of 2022" had "decrease[d] 8.0% compared to the first quarter of 2021," and that "[o]perating expenses increased by $34 million, or 59%, compared to the first quarter of 2021." Following t his news, the price of NeoGenomics common stock fell $0.41 per share, or 3.8%, from $10.85 per share on April 26, 2022 to $10.44 per share at the close of trading on April 27, 2022.
The complaint alleges that throughout the Class Period, the defendants failed to disclose to investors that: (i) NeoGenomics was anything but a "one-stop shop" for cancer testing because it did not offer the most technologically advanced NGS tests, which led to a significant decrease in
revenue as current and prospective customers went elsewhere for their testing needs; (ii) NeoGenomics' costs were not fixed because NeoGenomics needed to hire additional employees to process more complex customized testing demanded by customers utilizing NeoGenomics' outdated portfolio of tests, leading to operational challenges, decreased lab efficiency, and increased testing turnaround times; and (iii) NeoGenomics violated federal healthcare laws and regulations related to fraud, waste, and abuse.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the Court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
Berger Montague, with offices in Philadelphia, Minneapolis, Washington, D.C., and San Diego, has been a pioneer in securities class action litigation since its founding in 1970. Berger Montague has represented individual and institutional investors for over five decades and serves as lead counsel in courts throughout the United States.
Contacts:
James Maro, Senior Counsel
Berger Montague
(215) 875-3093
[email protected]
Andrew Abramowitz, Senior Counsel
Berger Montague
(215) 875-3015
[email protected]
SOURCE: Berger Montague