On June 4, 2026, Barrack, Rodos & Bacine (“BRB”) filed a class action lawsuit in the United States District Court for the District of Connecticut, captioned Basma v. GeneDx Holdings Corp., et al. on behalf of persons and entities that purchased or otherwise acquired GeneDx Holdings Corp. (“GeneDx”) (NASDAQ: WGS) securities between April 16, 2025, and May 4, 2026, inclusive (the “Class Period”). Plaintiff pursues claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
Case Summary
GeneDx develops genetic monitoring and tests health insights to inform diagnosis, direct treatment, and improve drug discovery. It is headquartered in Stamford, Connecticut, and currently has a market capitalization of $1.47 billion, with approximately 29.3 million shares outstanding. The Company acquired Fabric Genomics in May 2025, for $33 million, with incentives up to $51 million. Fabric Genomics was acquired as it allegedly could provide an AI-driven software for NGS analysis, interpretation, and clinical reporting for rare disease, hereditary risk and cancer testing. The Company provides genetic testing for hospitals and is compensated by insurers who reimburse it for each test. The Company then reports financial results by reporting the average reimbursement rate, or ARR.
The claims against Defendants arise from misrepresentations and omissions regarding the viability of Fabric Genomics and its ability to improve the Company’s margins, as well as issues regarding the Company’s ARR. Throughout the Class Period, which began after the Company announced its acquisition of Fabric Genomics, the Company led the market to believe that Fabric would improve revenue as well as reduce COGS by combining “the best of capability between GeneDx and Fabric.” Additionally, the Company led the market to believe that the Company’s reimbursement rate would trend “up and [be] durable.” During Q3 2025, the ARR was over $3,800, and during Q4 2025, the ARR was $3,750.
The truth emerged on May 4, 2026, when after hours, the Company disclosed that its Q1 financial results had missed on both its exome and genome lines, and cut its 2026 guidance from $540-555 million to $475-490 million. During the related earnings call, the Company disclosed that the ARR came in at $3,300, or $200 below expectations. The Company also disclosed that it had taken a goodwill impairment charge of $31.3 million as a part of the Fabric Genomics acquisition – after paying $36.5 million for the Company only a year before.
As a result, the Company’s share price plummeted on May 5, 2026, to $34.51, a decline of $33.42, or 49.2%.
Moreover, as Canaccord Genuity analyst Kyle Mikson wrote in a report issued after the Company’s May 5, 2026 disclosures: “GeneDx’s 1Q26 results appeared to reflect the reversal of important growth drivers (e.g. ASP expansion, non-core business). . . . We believe it is alarming that the problems appears more systemic in nature, as it is unclear when the company’s core (whole exome sequencing and whole genome sequencing) business will recover to historical growth rates.”
If you wish to serve as Lead Plaintiff for the Class, you must file a motion with the Court no later than August 3, 2026, which is the first business day on which the U.S. District Court for the District of Connecticut is open that is 60 days after the publication date of June 3, 2026. Any member of the proposed Class may seek to serve as Lead Plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed Class.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Mark Stein, Director of Investigations, at 215-963-0600, or via e-mail at investoralert@barrack.com.