Invitae's $102M IPO stands alone as three med tech IPOs remain sidelined

Only one out of a potential of 5 med tech IPOs has gotten out this week, but it has done so with style. Invitae ($NVTA) raised $102 million in an IPO that priced above its range and was upsized. It's a sign that life sciences investors remain picky amidst a sea of med tech IPO offerings, as a number of neglected companies rush to the exits.

The genetic testing company sold 6.35 million shares at $16 each; that's above the 5.35 million that were expected to price at a range of $13 to $15 a piece. The deal values the company at $516 million. In early trading on Feb. 12, its shares were up 8% to $17.33.

But lately, more med tech IPOs seem to get postponed than to actually price. This week drug metabolic test maker AltheaDx postponed its planned IPO, while last week radiopharmaceutical company Advanced Accelerator Applications and insulin pump maker Asante Solutions each postponed IPOs.

Like AltheaDx, an IPO pricing for cardiovascular plaque imaging and treatment company Infraredx has been kicked out for a couple of weeks now. No word yet if it will officially postpone or withdraw. In addition, diagnostics player AutoGenomics as well as nitric oxide specialist and Ikaria spinout Bellerophon Therapeutics remain unpriced for now; both were slated to debut this week.

Invitae plans to use its financing to expand its current assay of 216 genes to one with more than 500 genes in 2015. Eventually, the company expects to provide genetic information on all the clinically indicated genes that are known, a figure that's currently at 4,000. Whole genome analysis is the ultimate goal for Invitae. About 80% of its test orders by Sept. 30 were for hereditary cancers.

The company launched in November 2013 with its current assay of 216 genes related to 85 different genetic disorders and 17 targeted panels. It had delivered more than 2,000 billable tests as of Sept. 30. Less than half of those tests, 44%, were billable to institutions or patients. And only about one-quarter of those, 26%, had been paid as of Sept. 30.

Each panel costs $1,500. Invitae has a patient-friendly policy in which patient cost per test is limited to $100 for patients able to bill their insurance under either in-network or out-of-network coverage.

The company had a mere $729,000 in revenues during the first nine months of 2014, with an operating loss of $32.1 million during that period. Reimbursement is likely to remain a challenge going forward for Invitae but it has ample cash to continue plowing forward, $194 million after the IPO.

Existing Invitae investors had committed to buying up to $25 million of the IPO. Invitae major holders include Baker Brothers with a 20.6% stake pre-IPO, BlackRock (17%), Thomas, McNerney & Partners (15.2%) and Genomic Health (7.4%).

Invitae is at least the fourth med tech IPO to price this year, but the first do so this month.

- here is the Invitae SEC filing