NEW YORK (GenomeWeb) – Law firm Robbins Geller Rudman & Dowd has filed a class action lawsuit against Foundation Medicine on behalf of purchasers of the company's common stock.
In a complaint filed with the District of Massachusetts, the law firm alleges that Foundation made false and misleading statements regarding the reimbursement process for its cancer genomic tests, including the likelihood of Medicare coverage. The complaint also alleges the company gave false and/or misleading statements with regards to its financial guidance. The firm asserts that these statements violated the Securities and Exchange Act of 1934.
Anyone who purchased common stock in Foundation between Feb. 26, 2014 and Nov. 3, 2015 can join the action.
According to the complaint, on July 29, 2015, Foundation disclosed it was not obtaining the coverage it claimed to have been receiving, and that it would not receive any payments from Medicare in 2015 due to a delay in receiving local coverage determination by its regional Medicare Administrative Contractor. As such, Foundation lowered its 2015 financial guidance and its stock fell $7 per share, or 24 percent.
Then, in November, the company further lowered its guidance, reporting that it expected to sell fewer clinical tests. Its stock fell again, to $17.31 per share.
Robbins Geller seeks to recover damages for purchasers of Foundation's stock and requests a trial by jury.