Myriad Genetics, Inc. (MYGN) Accused of Misleading Shareholders
According to the class action complaint for alleged violations of the Securities Exchange Act of 1934, by July 2018, Myriad had completed the acquisitions of Assurex Health, Inc. and its product GeneSight, as well as Counsyl, Inc. and its product ForeSight. Myriad touted the significant growth potential of acquiring these businesses and their products. However, Myriad failed to disclose that its GeneSight product lacked sufficient evidence to support its purported benefits, causing the product to come under question by the FDA. Myriad also neglected to inform investors that acquiring Counsyl’s product ForeSight could incur risk of suffering from lower reimbursements, which could materially impact Myriad’s revenue. Then, on August 13, 2019, Myriad announced its fiscal fourth quarter and full year 2019 results, revealing that lower reimbursements for Foresight had caused Myriad to fall short of revenue expectations and that the FDA had requested changes to GeneSight and questioned the validity of its benefits. On this news, Myriad’s stock price fell $19.05, or almost 43%, to close at $25.50 per share. The stock has yet to recover.