Invitae inks $200M Genosity buyout, lands $1.2B investment to expand genetic testing

Dive Brief:

Invitae has raised $1.15 billion from investors and struck a $200 million takeover of Genosity to expand its genetic testing business.
The investment gives Invitae, which has grown through M&A in recent years, the means to expand its portfolio of genetic tests through internal development and further acquisitions.
Invitae disclosed the financing alongside news of its takeover of Genosity, which sells software and lab services that could support a test that monitors for the recurrence of tumors.

Dive Insight:

Invitae has made a string of acquisitions over the past two years, most notably the $1.4 billion takeover of ArcherDX that moved it into somatic cancer testing. The ArcherDX deal gave Invitae the personalized cancer monitoring test that spurred it to acquire Genosity.

When the cancer test comes to market, Invitae envisages using Genosity's capabilities to support it. Genosity sells software and laboratory services to support next-generation sequencing in oncology development and clinical care. Invitae, which already works with Genosity on multiple projects, expects the capabilities to increase access to its test and reduce turnaround time.

Invitae is set to pay $120 million in cash and $80 million in stock to buy Genosity. The genetic testing company ended 2020 with $360.7 million in cash and equivalents after a year in which it grew sales but saw its loss from operations balloon by more than 150%.

To fund further investment in its business, Invitae has secured $1.15 billion from four investors. SB Management, a subsidiary of Japanese multinational conglomerate SoftBank Group, provided almost two-thirds of the money. Akshay Naheta, CEO of SB Management, said Invitae "has a definitive head start in the rapidly expanding market for clinical genetic sequencing."

Invitae is now seeking to build on its established market position amid growing competition, notably in the oncology space it is targeting as its next growth driver. "This investment will help us continue to fuel our growth, including expanding our platform, services and menu through both in-house development and the addition of complementary companies and technologies," Invitae CEO Sean George said in a written statement.

Alongside the two major announcements, Invitae discussed a small deal that it first disclosed as part of its annual report in February. The deal saw Invitae pay $2.7 million and commit up to $6.2 million in restricted stock units to acquire assets and key personnel from IntelliGene Health Informatics. Like the Genosity takeover, the deal is intended to support Invitae's oncology offerings.