Invitae

Invitae filed for voluntary Chapter 11 bankruptcy protection on February 13, 2024 in the U.S. Bankruptcy Court for the District of New Jersey.¹⁵¹⁶¹⁸ Invitae sold its medical-genetics business to Labcorp Genetics Inc. for roughly $239 million in cash through a competitive auction.¹⁸

Timeline

Money raised

Invitae raised over $200 million across 6 rounds in the private markets before its IPO.¹¹ Invitae completed its IPO in February 2015 at a $492 million post-money valuation, raising $101.6 million.¹¹ In November 2016, Invitae raised $45 million via a secondary offering.¹⁰ In April 2021, Invitae announced a $1.2 billion investment led by SoftBank Group Corporation in the form of convertible debt.¹²¹⁴ As of Q1 2022, Invitae had $885 million in cash and marketable securities.¹³ Invitae had $1.635 billion in debt obligations as of Q1 2022, including $1.5 billion in convertible notes.¹³ Invitae sold its medical-genetics business to Labcorp Genetics Inc. for roughly $239 million in cash.¹⁸ Under the liquidating plan, secured noteholders received an estimated 91% to 94.8% recovery, while parent-level convertible notes totaling roughly $1.18 billion received nothing.¹⁸

Investors named in the sources: SoftBank Group Corporation¹²¹⁴, Baker Brothers¹⁰, Deerfield Partners¹⁸.

What happened

Invitae was founded in 2010 by Dr. Randy Scott, an accomplished biotech/genomics executive.¹¹ In November 2013, Invitae launched its first commercial offering, an assay of 216 genes covering 85 genetic disorders, charging $1,500 per test.¹¹ Invitae completed its IPO in February 2015 at a $492 million post-money valuation, raising $101.6 million and starting trading at $16 per share.¹¹ By December 2016, Invitae had a market capitalization of just under $250 million and its stock traded at about 35% of its IPO price.¹⁰ Invitae provided a diagnostic service comprising hundreds of genes for various genetic disorders associated with oncology, cardiology, neurology, pediatrics, and other rare disease areas.¹⁰

Invitae's primary clients were large insurers like Aetna and United Health, and the company was covered at insurers that carried 160 million individuals on their plans.¹⁰ Invitae was targeting being cash flow positive by the end of 2018.¹⁰ Invitae's cost per test was down to $450 in the third quarter of 2016, down approximately 10% from the second quarter.¹⁰ Invitae ended the third quarter of 2016 with over $70 million in cash and marketable securities, and then raised another $45 million via a secondary offering in November 2016.¹⁰ In April 2021, Invitae announced a $1.2 billion investment led by SoftBank Group Corporation in the form of convertible debt.¹²¹⁴

By 2021, Invitae had generated over $460.4 million in revenue and completed over 1.1 million billable tests.¹¹ Since its IPO, Invitae completed 16 acquisitions totaling over $3 billion, including ArcherDX, Citizen, and One Codex.¹¹ Invitae's cash burn was significant: -$80M in 2015, -$100M in 2016, -$123M in 2017, -$129M in 2018, -$242M in 2019, -$602M in 2020, and -$379M in 2021.¹¹ As of April 2022, Invitae had 229 million shares outstanding, compared to 30 million at IPO, a more than 7x increase in shares outstanding in just 7 years.¹¹ Invitae had $1.635 billion in debt obligations as of Q1 2022, including $1.5 billion in convertible notes, with $350 million due in 2024 and $1.15 billion due in 2028.¹³

Invitae also had a $135 million term loan from Perceptive Capital with restrictive covenants.¹³ Invitae's gross margin was 21%, one of the lowest in the portfolio of the article's author.¹³ Invitae announced efforts to extend its cash runway well into 2023 or beyond and planned to reach positive operating cash flow by 2025.¹³ On February 13, 2024, Invitae Corporation and affiliated debtors filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey.¹⁵¹⁶¹⁸ Invitae announced it would use its cash on hand to operate its business during the proceedings and continue serving customers and patients.¹⁶

Invitae filed for chapter 11 with the support of its Senior Secured Noteholders as agreed to in a Transaction Support Agreement dated February 13, 2024.¹⁶ Invitae's president and CEO Ken Knight said the company had been working over the past eighteen months to improve its cash position by realigning its portfolio and focusing on its most impactful business lines.¹⁶ Invitae sold its medical-genetics business to Labcorp Genetics Inc. as a going concern for roughly $239 million in cash in a competitive auction.¹⁸ Invitae emerged from a confirmed plan less than six months after filing for bankruptcy.¹⁸ Under the liquidating plan, secured noteholders received an estimated 91% to 94.8% recovery, while parent-level convertible notes totaling roughly $1.18 billion received nothing.¹⁸

Legal outcomes

• filedInvitae Corporation and affiliated debtors filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code on February 13, 2024.¹⁵¹⁶¹⁸

Where the founders are now

Dr. Randy Scott founded Invitae in 2010.¹¹

Sources

1. ☠️ Why healthcare startups fail, halletecco.substack.com, 2 years ag
10. Invitae: Genetic Testing on the Cusp of a Breakout | Investors Alley, Investors Alley
11. Invitae: Who They Left Behind -, workweek.com, 2022-06-21
12. SoftBank to Lead $1.2 Billion Investment in Genetic-Testing ..., wsj.com, Apr 5, 202
13. Here's Why Invitae Stock Can't Stop Falling - Nanalyze, Nanalyze, 2022-05-26
14. Invitae to raise $1.2 billion from investors, SoftBank leads funding round- Moneycontrol.com, Moneycontrol, Apr 5, 202
15. Invitae Corporation, et al., veritaglobal.net
16. Invitae Files for Voluntary Chapter 11 Protection; Pursues Sale Process, prnewswire.com, 2024-02-13
18. Invitae: NVTA Stock and $239M Labcorp Sale, ElevenFlo, 2026-03-19

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