Invitae surges after report says Softbank will lead a $1.2 billion investment in the genetic-testing company

Invitae Genomics Test Kit Sample
  • The genetic testing company Invitae is set to receive a $1.2 billion investment led by Softbank.
  • Invitae also announced it will acquire a genomics company, Genosity, in a $200 million deal.
  • The firm turned in revenues of $280 million and a net loss of $602 million for the full year 2020.
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Invitae stock surged as much as 7% on Monday after a report out of the Wall Street Journal said Softbank plans to lead a $1.2 billion investment in the San Francisco-based genetic testing company.

The investment will come in the form of convertible debt and allow Invitae to expand its current genetic testing operations, per WSJ.

The convertible debt notes have an initial conversion price of $43.18 per share. Invitae shares closed at $39.19 on Friday.

The Inviate stake is the second sizeable investment from Softbank into a medical sciences company in the past few months.

The Japanese conglomerate also invested $900 million into the convertible debt of Pacific Biosciences, a next-generation DNA-sequencing systems firm, back in February.

Invitae announced plans to acquire the genomics company Genosity on Monday as well. The genetic testing company plans to use Genosity’s holdings to enhance its personalized oncology offerings.

Under the terms of the deal, Invitae will spend $200 million on the acquisition, consisting of approximately $120 million in cash and $80 million in Invitae shares. The deal is expected to close in the second quarter.

Softbank is the second big name to come out in support of Invitae.

In a CNBC interview in March, Cathie Wood of Ark Invest said Invitae “is probably one of the most important companies in the genomic revolution.”

Wood argued Inviate is “investing aggressively to be the leader in the diagnostics testing space” and that a “move towards personalized testing is going to give a few companies the lion’s share of the market.”

Despite the recent support from big names like Wood and Softbank, Invitae continues to struggle with profitability. The company turned in revenues of roughly $280 million in 2020 while posting a $602 million net loss, according to the annual 10-K SEC filing.

Invitae traded up 5.62%, at $41.36 per share, as of 10:56 a.m. ET on Monday.

invitae chart 2
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