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Accelerate Dx Faces Fraud Allegations in Shareholders' Class Action Suit

NEW YORK (GenomeWeb) – Accelerate Diagnostics faces a class action lawsuit from shareholders alleging that the firm intentionally misled investors about the capabilities of its rapid diagnostic platform.

The class action suit was filed in the US District Court for the District of Arizona by plaintiff Brian Rapp on behalf of all persons or entities that purchased Accelerate Diagnostics securities between March 7, 2014 and Feb. 17, 2015. The suit names the firm, President and CEO Lawrence Mehren, and CFO Steve Reichling as defendants.

The suit alleges that the defendants made false and misleading statements to investors by failing to disclose that the firm's main product, the BACcel ID/AST rapid diagnostic platform, actually requires a positive blood culture. At the JP Morgan Healthcare Conference in January, the firm said its method of genotypic and phenotypic microbial detection was culture-free. According to the company's website, the system uses microfluidics and high-throughput microscopy to deliver single-cell microbiology analysis directly from specimen without prior culturing and colony isolation.

Last month, the website published an article citing the firm's corporate documents which revealed that the most likely use of the BACcel System requires a positive blood culture.

On Feb. 20, 2015, after the article was published, shares of Accelerate Diagnostics — which are traded on Nasdaq under ticker symbol "AXDX" — fell more than 21 percent to $18.05.

The plaintiffs seek to recover damages for alleged violations of federal securities laws. Shareholders who purchased stock during the period have until May 18, 2015 to ask to be appointed as a lead plaintiff.

In May 2014, the firm completed a $45 million rights offering, with $25.5 million raised from shareholders who subscribed for 1.5 million shares of common stock. The firm reported at the time that 57 percent of stockholders exercised their subscription privileges.