GeneDx plunges 49% as class action targets Fabric Genomics deal

GeneDx Holdings Corp. shares collapsed 49% on May 5 after the genomics company disclosed a $31.3 million impairment tied to its Fabric Genomics acquisition and slashed 2026 revenue guidance by 12%.

"The company may have misled investors about the importance of Fabric Genomics and the durability of its average reimbursement rates," Reed Kathrein, the Hagens Berman partner leading the firm's investigation, said.

GeneDx on May 4 reported first-quarter results that showed adjusted gross margin narrowing to 69% from 74% a year earlier. The company cut its 2026 revenue forecast to $475 million to $490 million from a prior range of $540 million to $555 million. The $31.3 million impairment charge represented roughly 94% of the $33.2 million cash GeneDx paid for Fabric Genomics in April 2025. Net loss swelled tenfold from the prior-year period.

The securities class action, filed in the U.S. District Court for the District of Connecticut as Basma v. GeneDx Holdings Corp., No. 26-cv-00880, seeks to represent investors who purchased GeneDx common stock between April 16, 2025 and May 4, 2026. The complaint alleges GeneDx and certain top executives violated the Securities Exchange Act of 1934 by failing to disclose problems in Fabric Genomics' viability that would hurt the company's overall business. The lead plaintiff deadline is Aug. 3.

The stock's collapse erased more than $1 billion in market value and puts GeneDx at its lowest since before the Fabric Genomics deal was announced. Investors will watch for any additional impairment charges when the company reports second-quarter results later this year.

This article is for informational purposes only and does not constitute investment advice.