Shares of NeoGenomics Inc (NEO) plunged on Thursday after a preliminary injunction was issued by a North Carolina district court, prohibiting the company from selling its RaDaR technology. The injunction comes in response to a lawsuit filed by Natera Inc (NTRA), alleging that NeoGenomics’ RaDaR infringes on Natera’s patent. NeoGenomics has expressed plans to appeal the ruling.
Under the injunction, NeoGenomics is barred from selling or offering for sale the accused RaDaR assay, as well as any similar assay or product. The company is also prohibited from promoting or marketing RaDaR to induce infringement by others. However, NeoGenomics may continue to offer RaDaR for existing patients and clinical trials already in progress.
This recent development follows a separate order earlier this month by the Delaware Federal District Court, which granted a permanent injunction against Invitae Corporation (NVTA) and its Personalized Cancer Monitoring (PCM) product.
The preliminary injunction has disappointed Needham, who expressed their concerns about the disruption to NeoGenomics’ long-term growth potential. The company’s growth in its Clinical Services and Advanced Diagnostics sectors, driven by transformation and enhanced expansion, has been a significant factor in its share price performance in 2023. However, the impact of RaDaR on these advancements is relatively smaller.
William Blair analysts anticipate a negative impact on stock sentiment, noting that the decision raises doubts about the long-term potential upside for the company’s model. Investors are now uncertain about RaDaR’s potential return to the market.
As a result of the news, NEO shares have dropped by 18.60% to $16.69, while NTRA shares have risen by 2.58% to $62.80.
This ruling is a setback for NeoGenomics as it faces legal challenges to its RaDaR technology. The company’s plans to appeal the injunction indicate its commitment to defending its position in the market. It remains to be seen how this legal battle will unfold and what implications it will have for the future of cancer diagnostics.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Always do your own research before making any investment decisions.
