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SoftBank-Backed Genetic Testing Invitae's Descent from $7B Valuation to Near-Bankruptcy

Vandana Singh
·2-min read

Invitae Corporation (NYSE:NVTA), backed by SoftBank Group (OTC:SFTBY) (OTC:SFTBF), is reportedly on the brink of filing for bankruptcy in the coming weeks.

The San Francisco-based medical genetics company, grappling with a substantial $1.5 billion debt burden, is enlisting the expertise of restructuring advisers from FTI Consulting and legal counsel from Kirkland & Ellis to navigate its financial challenges.

Amidst this financial turmoil, Invitae is actively exploring various strategic options, and bankruptcy is a prominent consideration.

The company, known for its aggressive acquisition approach in recent years, has initiated the shedding of assets and cost-cutting measures to address its precarious financial situation, the Wall Street Journal noted.

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Notably, the downward trajectory of Invitae mirrors the struggles faced by its industry counterpart, 23andMe Holdings Co (NASDAQ:ME), a genetic testing company.

23andMe’s market cap plummeted from $6 billion in 2021 to a mere $332 million, reflecting the challenges within the genetic testing sector.

Invitae’s stock, which once soared above $50, dramatically declined. The company’s market cap, previously exceeding $7 billion, has dwindled significantly over the past 12 months, experiencing an 82% loss in value.

Having invested $1.2 billion in convertible debt in 2021 to support Invitae’s asset acquisition plans, SoftBank remains a stakeholder in the beleaguered company.

In January, Invitae sold its non-invasive prenatal and carrier screening business to Natera Inc (NASDAQ:NTRA) for $10 million. The transaction includes $42.5 million in potential milestone payments, including cash and litigation-related credits.

In December 2023, Invitae divested Ciitizen’s assets and announced strategic cost cuts, including workforce reduction and other operating expense reductions, with an anticipated cash savings of approximately $90 million-100 million on an annualized basis.

Price Action: NVTA shares are down 68.80% at $0.122 on the last check Monday.

Photo via Wikimedia Commons

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This article SoftBank-Backed Genetic Testing Invitae's Descent from $7B Valuation to Near-Bankruptcy originally appeared on Benzinga.com

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