The lawsuit, filed by Hagens Berman, targets the period between April 16, 2025, and May 4, 2026. Plaintiffs claim the company provided false assurances about the durability of its average reimbursement rates and the strategic value of the Fabric Genomics unit, which GeneDx acquired for $33.2 million just one year ago. By May 2026, the company was forced to record impairment charges of $31.2 million against that acquisition, effectively writing off 94% of the investment.
Discrepancies between management’s February outlook and the May earnings release were stark. While leadership previously projected stable reimbursement rates and 33% to 35% growth, the actual results revealed a significant product mix shift toward lower-margin genome testing. This pivot, coupled with the Fabric Genomics revenue shortfall, prompted GeneDx to slash its 2026 guidance by 12%. Reed Kathrein, a partner at Hagens Berman, stated the firm is investigating whether management intentionally obscured the deteriorating value of its assets and the timing of the adverse shift in their product portfolio.
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