Invitae to acquire Genosity to accelerate access to personalized oncology testing worldwide

Rhea-AI Summary

Invitae (NYSE: NVTA) announced its definitive agreement to acquire Genosity, a genomics company, for approximately $200 million. The deal includes $120 million in cash and $80 million in Invitae stock. This acquisition aims to enhance Invitae's personalized oncology offerings and leverage Genosity's capabilities in complex sequencing. By integrating Genosity's technology, Invitae expects to speed up the development and accessibility of its Personalized Cancer Monitoring platform, improving patient care globally. The transaction is anticipated to close in Q2 2021.

Positive

• Acquisition of Genosity for $200 million positions Invitae to enhance personalized oncology solutions.
• Integration of Genosity's sequencing technology is expected to accelerate product development and market access.
• Genosity's existing collaboration with Invitae on projects boosts confidence in synergy realization.

Negative

• Transaction value of $200 million could strain resources; $120 million in cash may impact liquidity.
• Integration challenges could arise from merging Genosity's operations with Invitae's existing framework.
• Potential delays in expected benefits and product launches due to the complexity of integration.

SAN FRANCISCO, April 5, 2021 /PRNewswire/ -- Invitae (NYSE: NVTA), a leading medical genetics company, today announced it has entered into a definitive agreement to acquire Genosity Inc. ("Genosity"), a genomics company offering innovative software and laboratory solutions to enable development and deployment of complex sequencing based tests. The acquisition would bring Genosity's specialized capabilities onto the Invitae platform to accelerate the time to market and decentralization of Invitae's personalized oncology offerings, including somatic and germline offerings poised to help transform how cancer is diagnosed, treated and monitored. 

"Each individual cancer is unique. The way we diagnose and treat it must be as well," said Robert Nussbaum, M.D., chief medical officer of Invitae. "Our goal is to move as quickly as we can toward the day where each cancer patient receives timely, comprehensive genetic information that is used to guide their care from diagnosis to monitoring for disease recurrence. Together with Genosity, we believe our combined novel capabilities and capacity will help us reach that day sooner for patients around the globe."

Genosity has built an industry-leading suite of highly specialized capabilities designed to support the use of next generation sequencing in oncology development and clinical care, ranging from basic research to clinical testing for regulated studies. The company currently works with Invitae on a number of projects and clinical trials. Becoming a part of Invitae is expected to provide important advantages for the development and launch of Invitae's oncology products, which include three devices under development that have received breakthrough device designation from the U.S. Food and Drug Administration (FDA), including the capacity, speed, and efficiency required to serve mainstream medicine cost effectively both with central laboratory services and decentralized kitted products.

"Genosity, under the insightful leadership of Marc Grodman, MD, has been able to develop solutions which enable broader adoption of genomic testing. Our laboratory services, end-to-end software solutions and data management platform are an ideal fit as Invitae develops best-in-class options for MRD-based cancer monitoring," said Robert D. Daber, Ph.D., president and chief technology officer of Genosity. "In Invitae we have found a like-minded partner focused on making genomics more affordable and accessible worldwide."

Maximum flexibility to accelerate the future of cancer care worldwide

Invitae is currently developing its Personalized Cancer Monitoring^TM (PCM) platform as an in vitro diagnostic (IVD) intended for regulatory submission. PCM analyzes a patient's unique genetic profile of their specific cancer and uses it to monitor their blood to detect cancer recurrence early when it is most curable. Invitae's PCM test, if approved for use, will be augmented by Genosity technology and capabilities to distribute PCM globally, increasing accessibility and reducing turnaround time. With this capability, we believe Invitae will be uniquely able to meet the needs of cancer patients worldwide, whether their clinicians send out to a central testing service or rely on tests that are completed locally by in-house laboratories.

In January 2020, Invitae received Breakthrough Device Designation from the FDA for PCM.

Transaction Terms

Under the terms of the agreement, Invitae will acquire Genosity for approximately $200 million, consisting of (i) approximately $120 million in cash and (ii) approximately $80 million in shares of Invitae common stock (based upon a trailing average closing price prior to the date of closing but subject to certain potential adjustments), with such stock and cash consideration subject to reduction based upon certain debt and transaction expenses of Genosity determined at closing.

The transaction, which has been unanimously approved by the Boards of Directors of both companies, is expected to close in the second quarter, subject to customary closing conditions including the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

In connection with the transaction, Invitae will grant restricted stock units ("RSUs") having a value of up to $15 million to certain continuing employees of Genosity. These RSUs will be granted under Invitae's 2015 Stock Incentive Plan (the "2015 Plan"), which is being amended to create an additional pool of shares of Invitae common stock to be used exclusively for the grant of inducement awards in compliance with New York Stock Exchange Rule 303A.08 ("Rule 303A.08"). These RSUs were approved by the Invitae Board of Directors and will be granted as an inducement material for continued employment following the acquisition of Genosity in reliance on the employment inducement exemption under Rule 303A.08. These RSUs will vest annually over three years and, in certain instances, the number of RSUs that vest on each vesting date will be calculated based upon a trailing average closing price prior to the date of closing of the Genosity acquisition.

Advisors

Cowen served as exclusive financial advisor to Genosity in connection with the acquisition.

Other Inducement Grants for Previous Transaction

Unrelated to the Genosity transaction, Invitae reported inducement grants in connection with the addition of certain assets and key personnel from a small organization called IntelliGene Health Informatics, LLC. which was focused on specialized software capabilities and technologies and will augment Invitae's oncology offerings.

In connection with Invitae's acquisition of assets from IntelliGene Health Informatics, LLC ("IntelliGene") for approximately $2.7 million, Invitae granted RSUs having a value of up to $6.225 million to certain employees and consultants of IntelliGene who continue as employees of Invitae.  These RSUs were granted under the 2015 Plan, which was amended to provide for an additional pool of shares of Invitae's common stock to be used exclusively for the grant of inducement awards in compliance with Rule 303A.08.  These RSUs were approved by the Invitae Board of Directors and were granted as a material inducement for continued employment following the acquisition of assets from IntelliGene in reliance on the employment inducement exemption under NYSE Rule 303A.08.  These RSUs vest in two installments at 12 months and 24 months following the acquisition of IntelliGene assets.  The number of RSUs that vest on each vesting date will be calculated based on the volume-weighted average trading price of the company's common stock on the NYSE for a trailing 20 trading day period prior to the grant date or, in certain situations, the vesting date.

About Invitae

Invitae Corporation (NYSE: NVTA) is a leading medical genetics company whose mission is to bring comprehensive genetic information into mainstream medicine to improve healthcare for billions of people. Invitae's goal is to aggregate the world's genetic tests into a single service with higher quality, faster turnaround time, and lower prices. For more information, visit the company's website at invitae.com.

About Genosity

Genosity is a life science biotechnology company that employs its expertise, novel software solutions and laboratory services for both somatic and germline applications to enable its strategic partners to fully realize the value of precision medicine for both the research and clinical markets. For more information, please visit us at genosity.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the expected benefits and advantages of the proposed acquisition; statements regarding Invitae's belief that the acquisition will accelerate the timeline to market and decentralization Invitae's future product offerings; statements regarding Invitae's belief that the acquisition will provide advantages for the development and launch of its potential oncology products, and the nature of any potential advantages; statements regarding the ability of Genosity's technology and capabilities to distribute PCM globally, increasing accessibility and reducing turnaround time; Invitae's belief that it will be able to uniquely meet the needs of cancer patients worldwide; and the expected timing of completion of the proposed transaction. . Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include, but are not limited to: the ability of the parties to close the transaction, including obtaining any required regulatory approvals; the failure to realize the anticipated benefits from the proposed acquisition on a timely basis or at all; the possibility that costs or difficulties related to the integration of Genosity's operations with those of Invitae will be greater than expected; and the other risks set forth in Invitae's Annual Report on Form 10-K for the year ended December 31, 2020. These forward-looking statements speak only as of the date hereof, and Invitae disclaims any obligation to update these forward-looking statements.

NOTE: Invitae and the Invitae logo are trademarks of Invitae Corporation. All other trademarks and service marks are the property of their respective owners.

Contact:
Laura D'Angelo
ir@invitae.com
(628) 213-3369

 

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SOURCE Invitae Corporation

FAQ

What is the purpose of Invitae's acquisition of Genosity?

Invitae aims to enhance its personalized oncology offerings and accelerate the development of complex sequencing tests.

What is the transaction value for the acquisition of Genosity by Invitae?

The acquisition is valued at approximately $200 million, comprising $120 million in cash and $80 million in stock.

When is the acquisition of Genosity expected to close?

The acquisition is anticipated to close in the second quarter of 2021, subject to customary closing conditions.

How will the acquisition impact Invitae's Personalized Cancer Monitoring platform?

The integration of Genosity's technology is expected to enhance the platform's development and accessibility, improving cancer care.

What advantages does Invitae expect from acquiring Genosity?

Invitae expects to gain specialized capabilities that will accelerate product development, improve efficiency, and enhance market access.