Glancy Prongay & Murray LLP Announces Federal Court Denial of Motion to Dismiss in Securities Fraud Case Against DermTech Executives

Mon 9th Jun 2025 | Posted by Michaela Ligman, on News

LOS ANGELES, June 9, 2025 – Glancy Prongay & Murray LLP (“GPM”) is pleased to announce that on June 5, 2025, the United States District Court for the Southern District of California denied in full Defendants’ motion to dismiss the Second Amended Consolidated Class Action Complaint in In re DermTech, Inc. Securities Litigation, Case No. 23-cv-1885-DMS-JLB.

The case arises from allegations that former DermTech executives John Dobak and Kevin Sun made material misrepresentations or omissions concerning key aspects of the Company’s business. Specifically, Plaintiffs allege that Defendants misrepresented: (1) the extent to which Medicare covered the Company’s flagship product; (2) the true drivers of the Company’s Average Selling Price (ASP) of the same flagship product; and (3) whether Defendants properly recorded DermTech’s revenue in accordance with applicable accounting standards.

Defendants sought to dismiss the investors’ complaint. In a comprehensive 24-page opinion by the Honorable Dana M. Sabraw, the court denied Defendants’ motion in its entirety.

Notably, the court also reversed its prior dismissal of claims related to Defendants’ ASP statements. While noting that the Second Amended Complaint contains similar allegations of falsity about those statements, in response to GPM’s briefing of the issues, the court was persuaded that Plaintiffs had adequately alleged Defendants’ ASP statements were in fact misleading. The court also rejected Defendants’ attempt to invoke the PSLRA’s safe harbor provision for forward-looking statements, holding that the revenue projections at issue included actionable misstatements about existing business conditions.

This decision clears the way for a putative class to proceed to discovery and, potentially, a trial.

GPM attorneys Ray Sulentic (San Diego) and Kara Wolke (Los Angeles) are litigating the case on behalf of the investors who acquired DermTech securities between March 8, 2021 and May 4, 2023.