Myriad Genetics

Case Details

Class Period:
September 2, 2016 – August 13, 2019
Date Filed:
September 27, 2109
Case Number:
2:19cv00707
Jurisdiction:
Utah District Court

Case Summary

The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) GeneSight lacked evidence or information sufficient to support the tests in their current form, including their purported benefits; (ii) the U.S. Food and Drug Administration ("FDA") had requested changes to GeneSight and questioned the validity of the test's purported benefits; (iii) Myriad had been in ongoing discussions with the FDA regarding the FDA's requested changes to GeneSight; (iv) Myriad's acquisition of Counsyl - and thereby, Foresight - caused the Company to incur the risk of suffering from lower reimbursement for its expanded carrier screening tests, which had the potential to, and actually did, materialize into a material negative impact on the Company's revenue; and (v) as a result, the Company's public statements were materially false and misleading at all relevant times. On August 13, 2019, during after-market hours, Myriad issued an earnings release, filed as an exhibit to a Current Report on Form 8-K with the SEC, wherein the Company reported its fiscal fourth quarter and full year 2019 financial results. Therein, Mark C. Capone, Myriad's President and Chief Executive Officer, disclosed that "[u]nfortunately, revenue in the fourth quarter was two percent below expectations largely due to lower reimbursement for [the Company's] expanded carrier screening test" - i.e., Foresight. Later that day, in an earnings conference call with investors and analysts, R. Bryan Riggsbee, Myriad's Chief Financial Officer, revealed that "the FDA requested changes to the GeneSight test offering" after Myriad had provided the FDA with clinical evidence and other information to support GeneSight Psychotropic, and that the Company has "been in ongoing discussions with the FDA regarding its request." Riggsbee continued by stating that "[a]lthough [Defendants] continue to disagree the changes to the tests are required, on August 10, 2019, [Defendants] submitted a proposal regarding the reporting of GeneSight test results to healthcare providers that we believe address the FDA's principal concerns." Also later that day, Myriad filed an Annual Report on Form 10-K with the SEC, reporting the Company's financial and operating results for the fiscal year ended June 30, 2019 (the "2019 10-K"). In the 2019 10-K, Defendants disclosed that the FDA had questioned whether the validity of GeneSight's purported benefits had been established. The 2019 10-K also revealed that, since at least late 2018, the FDA had increasingly questioned the claims of marketed genetics tests, such as GeneSight. On this news, Myriad's stock price fell $19.05 per share, or 42.76%nearly half of the Company's total stock value - to close at $25.50 per share on August 14, 2019.

Action Details

View Complaint (pdf)

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