Progenity ($PROG) has agreed to settle $1 million with investors to resolve claims that it misled them about overbilling issues and financial risks ahead of its IPO.
Outline
In 2020, Progenity was accused of overstating revenues and failing to disclose a $49 million government settlement tied to overbilling. By August, the company reported weak financials and $PROG dropped 50%. Following this, Progenity faced a lawsuit from investors.
Timeline
June 22, 2020 – Progenity held its IPO, selling 6.6 million shares and generating over $100 million in gross proceeds.
July–August 2020 – Progenity announced a $49 million proposed settlement to resolve government investigations into overbilling. As part of this, it set aside $10.3 million to refund government health programs for overbilling.
August 14, 2020 – Following this news, $PROG declined nearly 50%.
October 27, 2020 – Investors filed a lawsuit, alleging Progenity misled them about financial risks and overbilling issues.
September 19, 2024 – Progenity finalized a $1 million settlement with investors.
Background
Progenity launched its IPO in June 2020, raising over $100 million. At the time, the company claimed it was well-positioned for growth through its core genetic testing business.
However, at that point, Progenity had already agreed in principle to a $49 million settlement with the government over improper billing and illegal marketing practices.
Specifically, the company had billed government healthcare programs using incorrect codes and waived patient copays to boost test volumes—actions that violated federal laws.
Progenity continued these practices until February 2020, when it abruptly ended its discount program amid mounting regulatory pressure.
Internally, the company had also identified that it had likely received substantial overpayments for its Preparent tests and later confirmed a $10.3 million charge for expected refunds.
By August 2020, Progenity reported weak revenues and test volumes, revealing a declining trend that had started before the IPO but was not disclosed to investors.
Following this news, $PROG plummeted nearly 50%.
On October 27, 2020, investors filed a lawsuit against Progenity.
What Can Investors Expect Now?
Progenity ($PROG) has agreed to settle $49 million with investors to resolve claims that it misled them about overbilling issues and financial risks ahead of its IPO.
If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.