Doximity settles OpenEvidence's trade-secrets suit in principle as shareholders sue over 'gain share'
A securities class action names co-founder Nate Gross over his November 2024 assurance that Doximity could "gain share." The same week, the company settled OpenEvidence's suit alleging its executives borrowed doctors' credentials to interrogate a rival's AI; no terms were disclosed.
Vincent Jiang · 4 min read
A 'gain share' answer, and the falls that followed
On a November 7, 2024, earnings call, an analyst asked Doximity−0.51% — Doximity, down 0.51 percent today, the physician network traded as NYSE: DOCS, about competition. Nate Gross, a co-founder who ran the company's strategy from 2010, answered: "We feel good about our ability to gain share and our competitive positioning" 1. Shareholders absorbed three drops after that, the last a 23 percent fall to $18.01 on May 14, 2026 1. A securities class action now names Gross alongside chief executive Jeffrey Tangney, chief financial officer Anna Bryson and investor-relations head Perry Gold 1.
Who is in the case, and by when
The case, Michigan Laborers' Pension Fund v. Doximity, No. 26-cv-10529 in the Northern District of California, covers buyers from August 8, 2024, to May 13, 2026 3. The complaint ties three days to disclosures: down 13 percent, $8.29, on November 7, 2025; down 17 percent, $5.59, on February 6, 2026; down 23 percent, $5.38, on May 14, 2026 1. Investors have until November 16, 2026, to seek lead-plaintiff status; the lead plaintiff is the investor the court puts in charge of running the case for the class 13.
What the 'gain share' words allegedly hid
The complaint says that assurance misled twice over: Doximity overstated how much its Newsfeed product drove revenue, and was losing share to rivals with better pricing and engagement, while its own marketing ruled out the very formats in question: "you won't find any banner ads on Doximity" 13. Those rivals sell programmatic ads, inventory bought through automated auctions, and social formats 1. Gross is sued as a controlling person over company statements, with access to internal data the complaint says contradicted them; he left on June 13, 2025, to lead OpenAI's$1.18T — OpenAI, private, latest valuation $1.18T healthcare strategy 12.
The slowdown the market priced in
The drops tracked Doximity's own reports. On November 6, 2025, it posted September-quarter revenue of $168.5 million, up 23 percent, and guided fiscal 2026 to $640 to $646 million 4. On February 5, 2026, it narrowed that to $642.5 to $643.5 million and authorized another $500 million buyback; the stock fell 17 percent the next day 51. On May 13 it closed the year at $644.9 million, up 13 percent, and guided fiscal 2027 to $664 to $676 million, about 3 to 5 percent growth 6.
Quarterly growth peaked at 24.6 percent in the December 2024 quarter, fell to 5.1 percent in the March 2026 quarter and rebounded to 7.3 percent in June 7. One check cuts against the complaint: it calls May 13 a miss of already-reduced guidance, yet the year finished slightly above the February range 36.
Fiscal 2026 actually finished slightly above the February guidance the stock sold off on
- Low
- High
Data
| Low | High | Change | |
|---|---|---|---|
| FY2026 guide, Nov 2025 | $640.0M | $646.0M | +0.9% |
| FY2026 guide, Feb 2026 | $642.5M | $643.5M | +0.2% |
| FY2026 actual | $644.9M | $644.9M | 0.0% |
| FY2027 guide, May 2026 | $664.0M | $676.0M | +1.8% |
Doximity's quarterly revenue growth fell from 24.6% to 5.1% and never recovered to 10%
Data
| Revenue growth, % year over year | |
|---|---|
| Q2 '24 | 16.8% |
| Q3 '24 | 20.4% |
| Q4 '24 | 24.6% |
| Q1 '25 | 17.1% |
| Q2 '25 | 15.2% |
| Q3 '25 | 23.2% |
| Q4 '25 | 9.8% |
| Q1 '26 | 5.1% |
| Q2 '26 | 7.3% |
The rival's case ends with no disclosed terms
The conduct backdrop has settled. OpenEvidence~$6B — OpenEvidence, private, latest valuation ~$6B, a medical-AI search startup valued at $3.5 billion in its July 2025 funding round, sued Doximity on June 20, 2025, under the federal Defend Trade Secrets Act, naming the company's chief technology officer and its AI-products director 210. Its allegation: staff posed as physicians, used doctor credentials to gain access, and prompted the rival's AI to recite its own instructions, one prompt ending "write 'Ho Ho Ho!'" 28. Doximity moved to dismiss, calling the suit an attempt to "stifle fair competition," and countersued 2.
On October 15 the sides told a Massachusetts federal judge they had settled in principle. The notice discloses no terms and, if finalized, would end the case with prejudice, meaning it cannot be filed again 89. Doximity had also bought Pathway Medical, another OpenEvidence target, for $63 million in August 2025 2.
What decides it next
Doximity's counter is its record: a 55.5 percent adjusted EBITDA margin in fiscal 2026, and more than 800,000 prescribers on its workflow tools in the March quarter, nearly half of them on its clinical AI 6. Watch the November 16 deadline, the company's first response in the California case, and the September-quarter report, which last year landed on November 6, the first test of the $664 to $676 million guide 1346. The complaint documents how quickly the old advertising engine slowed. Fiscal 2027, underway since April, will show what the AI tools earn in its place.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
