GeneDx Holdings (WGS) Faces Securities Class Action After 49% Drop, 94% Write-off Related to Fabric Genomics Acquisition - Hagens Berman

SAN FRANCISCO, June 5, 2026 /PRNewswire/ -- GeneDx Holdings (NASDAQ: WGS) faces a securities class action after the price of the company's stock cratered $33.42 (-49%) on May 5, 2026 in response to the company's disastrous Q1 2026 earnings report. The lawsuit seeks to represent investors who purchased shares of GeneDx common stock between April 16, 2025 and May 4, 2026.

National shareholder rights law firm Hagens Berman is investigating claims that GeneDx violated the federal securities laws. The firm urges GeneDx investors who suffered significant losses to contact the firm now to discuss their rights.

Class Period: Apr. 16, 2025 – May 4, 2026
Lead Plaintiff Deadline: Aug. 3, 2026
Visit: www.hbsslaw.com/investor-fraud/wgs
Contact the Firm Now: [email protected]
                                         844-916-0895

GeneDx Holdings Corp. (WGS) Securities Class Action:

Background

GeneDx operates a data-driven clinical diagnostics business model focused on rare and ultra-rare disease testing, emphasizing its whole genome sequencing and whole exome sequencing tests as primary growth drivers.

The company derives the bulk of its revenue from clinical diagnostic testing, billing payers for ordering genome and exome tests, and emphasizes to investors the importance of its average reimbursement rate ("ARR") metric to gauge financial performance.

GeneDx has touted its genome and exome growth and its "consistent trend of acceleration." The company also emphasized the durability of its ARR which was $3750 in 2025, and which management conveyed in February (5 weeks into Q1) would be flat for 2026. Also important to investors, management stressed that genome and exome 2026 revenue and volume growth would be 33% to 35% with a "baseline" of 33% for Q1 2026.

In a move toward a hybrid diagnostic business model and capturing international business, on May 5, 2025, GeneDx acquired Fabric Genomics for about $33.2 million cash. The company said this would expand the company's addressable market with multiple scalable revenue streams and "transform[] static data into a dynamic, recurring revenue-generating platform – driving growth through software margins and high-leverage interpretation services across geographies and clinical use cases."

The Complaint and Revelations

The complaint alleges that GeneDx made false and misleading statements and did not disclose that the company misled investors about the importance of Fabric Genomics, that its margins would suffer, its ARRs were not durable and, as a result, its gross margins would decline.

On May 4, 2026, the company's growth narrative abruptly and negatively changed. That day, GeneDx reported dismal Q1 2026 financial results which included a massive tenfold increase in net loss compared to the prior year period. The Fabric Genomics business (which reported a $2.5 million revenue miss) was the largest contributor to the loss, as GeneDx recorded impairment charges related to the unit totaling $31.2 million, or about 94% of the cash paid for it just one year ago.

In addition, and in contrast to its February assurances, GeneDx's ARR fell about $200 short, a surprise blamed on a huge, adverse change in product mix toward genome whose ARR was only half that of exome. The company also said that exome and genome revenue growth would be "at least 20%," substantially lower than it said in February. As a result of GeneDx's changed growth narrative, the company slashed 2026 revenue guidance by 12%.

"We're investigating whether GeneDx may have intentionally or recklessly misled investors about Fabric's real value to the company, the key changes in its product mix that have dramatically reduced their growth expectations, and when management first knew of the product shift," said Reed Kathrein, the Hagens Berman partner leading the firm's investigation.

If you invested in GeneDx and have substantial losses, or have knowledge that may assist the firm's investigation, submit your losses now »

If you'd like more information and answers to other frequently asked questions about the case and the firm's GeneDx investigation, read more »

Whistleblowers: Persons with non-public information regarding GeneDx should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].

About Hagens Berman
Hagens Berman is a global plaintiffs' rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman's team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. 

SOURCE Hagens Berman Sobol Shapiro LLP