Natera, Inc. Securities Fraud Class Action

Natera investors may receive additional information about the case by clicking the link "Submit Your Information" above.  If you are a member of the class described below, you may no later than June 27, 2022 move the Court to serve as lead plaintiff of the class, if you so choose.

Kessler Topaz Meltzer & Check, LLP has filed a class action lawsuit on behalf of those who purchased or acquired Natera, Inc. (“Natera”) (NASDAQ:  NTRA) common stock between February 26, 2020 and April 19, 2022, inclusive (the “Class Period”).

Case Background:
Natera, a Delaware corporation with principal executive offices in Austin, Texas, offers genetic testing in the areas of women’s health, oncology, and organ health.  Among other things, the Company produces and markets a non-invasive prenatal test (NIPT), called “Panorama,” and a screening test for kidney transplant failure, called “Prospera.”  Throughout the Class Period, Defendants repeatedly assured investors that Panorama was reliable, that Prospera was more accurate than competing tests, and that Natera’s growth was driven by its superior technology and customer experience.

Investors, however, began to learn the truth on January 1, 2022, when The New York Times published a detailed report calling into question the accuracy of certain prenatal tests manufactured by Natera and other diagnostic testing companies.  Among other things, The New York Times reported that Natera’s positive results for several genetic disorders were incorrect more than 80 percent of the time.  On this news, the price of Natera common stock fell $5.35 per share, or approximately 6% over two trading days, from a close of $93.39 per share on December 31, 2021, to close at $88.04 per share on January 4, 2022.

Less than two weeks later, on January 14, 2022, the Campaign for Accountability—a nonprofit watchdog group—filed a complaint with the U.S. Securities and Exchange Commission  requesting an investigation as to whether Natera repeatedly claimed – in marketing materials and earnings calls – that its tests are much more reliable than it appears they really are. On this news, the price of Natera common stock fell $6.29 per share, or more than 9%, from a close of $67.37 per share on January 14, 2022, to close at $61.08 per share on January 18, 2022.

Then, on March 9, 2022, Hindenburg Research issued an investigative report alleging, among other things, that “Natera’s revenue growth has been fueled by deceptive sales and billing practices aimed at doctors, insurance companies and expectant mothers.”  On this news, the price of Natera common stock fell as much as $28.65 per share, or more than 52%, from a close of $54.75 per share on March 8, 2022, to an intra-day low of $26.10 per share on March 9, 2022.  

Several days later, on March 14, 2022, a jury found that Natera had intentionally and willfully misled the public by utilizing false advertisements to market Prospera in violation of federal and state laws.  Among other things, the jury found that Natera’s marketing falsely claimed that Prospera was more accurate than the competing kidney transplant testing offered by CareDx, Inc.  Ultimately, the jury awarded CareDx, Inc. $44.9 million in monetary damages.  On this news, Natera common stock fell as much as $8.81 per share, or approximately 22.5%, from an intra-day high of $39.13 per share on March 14, 2022, to close at $30.32 per share on March 15, 2022.

Finally, on April 19, 2022, the United States Food and Drug Administration (FDA) issued a safety communication “to educate patients and health care providers and to help reduce the inappropriate use of [NIPTs].”  The FDA cautioned that statements about NIPTs’ reliability and accuracy “may not be supported with sound scientific evidence” and revealed the existence of “cases where a screening test reported a genetic abnormality and a confirmatory diagnostic test later found that the fetus was healthy.”  The FDA suggested that patients discuss benefits and risks with a healthcare provider before deciding to undergo NIPT or making any pregnancy-related decisions on the basis of NIPT results.  In addition, the FDA advised health care providers that they should not rely on NIPT results alone to diagnose chromosomal abnormalities or disorders. Following this news, the price of Natera common stock fell as much as $1.53 per share, or approximately 3.9%, from an intra-day high of $39.63 per share on April 19, 2022, to close at $38.10 per share on April 20, 2022.

The complaint alleges that, throughout the Class Period, the Defendants misrepresented and/or failed to disclose that: (1) Panorama was not reliable and resulted in high rates of false positives; (2) Prospera did not have superior precision compared to competing tests; (3) as a result of Defendants’ false and misleading claims about Natera’s technology, the company was exposed to substantial legal and regulatory risks; (4) Natera relied upon deceptive sales and billing practices to drive its revenue growth; and (5) as a result of the foregoing, Defendants’ statements about the company’s business, operations, and prospects lacked a reasonable basis.  

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP:  James Maro, Esq. (484) 270-1453 or via e-mail at info@ktmc.com.  If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.