The company will auction off the rest of its assets under court’s supervision.
The content and themes expressed within the article are that of the news. The advertiser does not have editorial control over the content of this article, and Inside Reproductive Health maintains full editorial independence. The views and opinions expressed in this article do not represent the views of the Advertiser or of Inside Reproductive Health.
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On Feb. 13, genetic testing company Invitae Corporation announced it had filed for Chapter 11 bankruptcy protection in New Jersey.
At the time of the filing, the company had assets worth $500 million to $1 billion and debts of $1 billion to $10 billion. Invitae stated in the filing it plans to auction its assets under the court’s supervision.
On Jan. 22, Invitae announced it had sold its reproductive health assets, which include carrier screening and non-invasive prenatal screening, to genetic testing company Natera for $10 million upfront and up to $42.5 million in milestone payments and litigation credits. Weeks later, on Feb. 5, the Wall Street Journal reported Invitae would likely file for bankruptcy soon, citing anonymous sources familiar with the matter.
The same day the WSJ article was published, Invitae’s stock dropped over 75% to about $0.10 per share.
From the time of its launch, Invitae’s stock remained steady for years, hitting a high of about $55 per share in December 2020. Ever since, the stock has been on the decline, trading for less than $1.00 a share since August 2023. This prompted a warning from the New York Stock Exchange in September that the company may soon be removed from the exchange.
Invitae offered its line of genetic carrier screening tests in the following areas: oncology, women's health, pediatric & rare diseases, cardiology and neurology. According to Invitae’s Q3 2023 earnings report, the company served 4.4 million patients over the quarter, with oncology generating the most revenue ($62 million), followed by women’s health ($27 million).
Was Invitae’s Business Model Too Good to be True?
Launched in 2018, Invitae stated the tests provide “affordable, accessible information on genetic changes that pose a risk for parents of having a child with an inherited genetic disorder.”
David Sher, founder and CEO of global fertility agency Elite IVF, told Inside Reproductive Health that Invitae’s average test price was about $200, versus about $1000 per test from some competitors.
As a former customer of Invitae, Sher was disappointed to hear of Invitae’s bankruptcy filing. Sher said the company’s low price allowed genetic testing to be more accessible for his patients. Now that the company is no more, Sher believes the rise in cost could keep many of his patients from being able to afford the service.
“Invitae changed the way the world looks at testing,” Sher said. “Testing became more standardized as a result of its accessibility, and I wonder what’s going to happen now.”
The business model and price point drove millions in annual sales for Invitae–in its 2022 full year financial report, the company reported $516 million in revenue, a 12% increase from the year prior. Still, the revenue couldn’t keep up with the money Invitae was spending. Despite a restructuring effort put in place by a new CEO that included laying off over 1,000 employees in July 2022, it lost over $654.4 million between Q3 of 2022 and the year before due to its total expenses of $1.3 billion.
Additionally, with more than $1 billion of debt, interest payments may have been too high to maintain, and a loan would likely share a similarly high interest rate, given the company’s income to debt ratio at the time of the filing.
“As a customer of theirs, I was astonished by their excellent offering and their service–it was amazing,” Sher said. “I thought it was almost too good to be true, and unfortunately, it seems like it was.”
The content and themes expressed within the article are that of the news. The advertiser does not have editorial control over the content of this article, and Inside Reproductive Health maintains full editorial independence. The views and opinions expressed in this article do not represent the views of the Advertiser or of Inside Reproductive Health.
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