We are investigating whether Natera, Inc. (ticker: NTRA) (“Natera”) has violated federal securities laws.
If you suffered losses as a result of recent drops in the price of NTRA, and have questions about your legal rights, please contact us using the form below to discuss your options at no charge.
The deadline to apply to serve as lead plaintiff in a securities class action lawsuit now pending against Natera is June 27, 2022.
Why is there an investigation?
On January 1, 2022, the New York Times published the results of an investigation finding that a popular type of non-invasive prenatal testing (NIPT) designed to detect chromosomal abnormalities in fetuses during pregnancy had an 85% rate of false positives (that is, 85% of the time a test result finding an abnormality was wrong). The New York Times further found that manufacturers of such tests were nonetheless promoting them as “reliable” and “highly accurate.” The New York Times identified Natera as a leading manufacturer of such tests.
On March 9, 2022, Hindenburg Research published a report alleging that Natera’s revenue growth has been fueled by deceptive sales and billing practices aimed at doctors, insurance companies and expectant mothers. The report claims it is based on more than two dozen interviews with former Natera employees, patients and industry experts, a review of hundreds of online complaints, FOIA requests to state Medicaid offices and state Attorneys General, and Natera financial filings.
In reaction to the Hindenburg Report, the price of NTRA has dropped from $54.75 at the close on March 8, 2022, to $38.98 at the close on March 11, 2022.
Less than a week later, on March 14, 2022, a jury found that Natera intentionally and willfully engaged in false advertising in the promotion of its kidney transplant rejection assessment test, Prospera, that deliberately deceived the organ transplant community, in violation of the Lanham Act, the Delaware Deceptive Trade Practices Act and Delaware unfair competition law. This news resulted in further declines in the price of Natera common stock.
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.”