Precigen, Inc. Class Action Lawsuit
- Company Name
- Precigen, Inc.
- Stock Symbol
- Class Period
- May 10, 2017 to September 25, 2020
- Northern District of California
The Precigen, Inc. class action lawsuit charges Precigen and certain of its executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Precigen securities between May 10, 2017 and September 25, 2020, inclusive (the “Class Period”). The Precigen class action lawsuit was commenced on October 5, 2020 in the Northern District of California and is captioned Abadilla v. Precigen, Inc., No. 20-cv-06936.
Precigen operates in the synthetic biology field and creates biologically based products. On February 1, 2020, Precigen changed its name from Intrexon Corporation to Precigen, Inc.
The Precigen class action lawsuit alleges that during the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (1) Precigen was using pure methane as feedstock for its announced yields for its methanotroph bioconversion platform instead of natural gas; (2) yields from natural gas as a feedstock were substantially lower than the aforementioned pure methane yields; (3) due to the substantial price difference between pure methane and natural gas, pure methane was not a commercially viable feedstock; (4) Precigen’s financial statements for the quarter ended March 31, 2018 were false and could not be relied upon; (5) Precigen had material weaknesses in its internal controls over financial reporting; and (6) as a result of the foregoing, defendants’ public statements were materially false and misleading at all relevant times.
On August 9, 2018, Precigen filed a Form 8-K with the U.S. Securities and Exchange Commission (“SEC”) announcing that its previously issued financial statements could no longer be relied upon “because of errors in [Precigen]’s accounting related to the initial adoption, and resultant impacts, of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (‘ASC 606’).” Precigen further disclosed that it “estimates that these errors have resulted in an overstatement of deferred revenue and accumulated deficit by approximately $67 million as of [ASC 606’s] adoption date, and an overstatement of revenues by approximately $4 million for the three months ended March 31, 2018,” and that Precigen had “concluded these errors resulted from a material weakness as it did not maintain effective controls over the adoption of ASC 606.”
Then, on August 13, 2018, Precigen filed a Form 10-Q/A with the SEC, amending and restating its previous quarterly report for the period ending March 31, 2018. The Form 10-Q/A restated revenue as $19,848,000 for the period ended March 31, 2018.
Thereafter, on March 2, 2020, Precigen filed a Form 10-K with the SEC for the year ended December 31, 2019, which revealed that “[i]n October 2018, [Precigen] received a subpoena from the Division of Enforcement of the SEC informing the Company of a non-public, fact-finding investigation concerning [Precigen]’s disclosures regarding its methane bioconversion platform.”
Finally, on September 25, 2020, the SEC announced it had issued a cease-and-desist order, which stated, among other things, that “[o]n May 10, 2017, Intrexon publicly reported progress in the laboratory converting natural gas into a precursor component of synthetic rubber called ‘2,3 BDO.’ Intrexon continued to publicly report the company’s progress converting natural gas into 2,3 BDO in August and November 2017, which was important information for investors and analysts at that time. Intrexon was primarily using significantly more expensive pure methane for the relevant laboratory experiments but was indicating that the results had been achieved using natural gas . . . . As a result, the Forms 8-K Intrexon furnished with the [SEC] on May 10, August 9 and November 9, 2017 were inaccurate under Section 13(a) of the Exchange Act and Rules 13a-11 and 12b-20 promulgated thereunder.”
The Precigen class action lawsuit thus alleges that as a result of defendants’ wrongful acts and omissions, and the decline in the market value of Precigen’s securities, plaintiff and other class members suffered significant losses and damages.
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