In re Myriad Genetics, Inc. Securities Litigation
|Court:||United States District Court for the District of Utah|
|Judge:||Hon. Robert J. Shelby|
|Class Period:||09/02/2016 - 08/13/2019|
|Case Contacts:||Adam H. Wierzbowski, Abe Alexander, Matthew Traylor|
This is a securities class action filed on behalf of all persons who purchased Myriad Genetics, Inc.’s (“Myriad” or “the Company”) publicly traded securities from August 9, 2017 to February 6, 2020, inclusive (the “Class Period”). The action is brought against Myriad and certain of the Company’s executives, and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
Myriad is a molecular diagnostics company that develops and markets predictive, personalized, and prognostic medical tests. Myriad offers, among other products, GeneSight, their marquee DNA genotyping test to aid psychotropic drug selection for depressed patients. GeneSight tests a patient for certain genes determined to react negatively to particular psychiatric and anesthetic treatments for depression, Attention Deficit Hyperactive Disorder (“ADHD”), and pain and then recommends particular treatments based on that patient’s genotype. During the Class Period, Defendants continually mischaracterized the evidentiary support for GeneSight in order to maximize sales of the test. The evidentiary support for the efficacy of pharmacogenomic tests is still largely unproven, yet Defendants repeatedly made untrue statements about the test’s accuracy based on methodologically flawed studies. Further, Myriad omitted key facts about the FDA’s investigation into the GeneSight test. During the Class Period, Defendants also materially overstated the Company’s revenue attributable to its hereditary cancer tests, as market pressures and an unfavorable billing code change resulted in lower reimbursements rates for Myriad’s largest product by revenue.
On August 13, 2019, Myriad filed an 8-K with the SEC reporting its disappointing fiscal fourth quarter and full year 2019 financial results. In an earning call with investors and analysts that same day, Myriad additionally revealed for the first time that “the FDA [had] requested changes to the GeneSight test offering” and that Myriad had “been in ongoing discussions with the FDA regarding its request.” On this news, Myriad’s stock price drastically fell $19.05 per share, or 42.76% of the stock’s total value, to $25.50 per share by close of trading on August 14, 2019, damaging Myriad investors. On November 4, 2019, the Company revealed for the first time it overstated revenue attributable to its hereditary cancer tests by $18 million. In response to revelation of these facts, Myriad’s stock again declined sharply, falling more than 40%, from a close of $35.10 on November 4, 2019 to a close of $20.93 on November 5, 2019. Finally, on the last day of the Class Period, Myriad shocked investors by announcing that the CEO – who had been with Myriad for 17 years – was suddenly leaving the Company. In response to this news, Myriad’s stock fell by 28%, from $29.29 at the close of market on February 6, 2020 to close at $21.02 on February 7, on high trading volume.
In December 2019, the Court appointed the Los Angeles Fire and Police Pensions as Lead Plaintiffs, and BLB&G as Lead Counsel for the Class. Lead Plaintiffs filed their Amended Complaint on February 21, 2020. Briefing on Defendants’ motion to dismiss was completed in August 2020 and we currently await the Court’s decision on that motion.
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