ArcherDX drops IPO plans in favor of a $1.4B takeover by Invitae

Personalized cancer test developer ArcherDX is walking away from plans to take itself public and into the arms of genetic testing company Invitae.

Earlier this month, ArcherDX announced it was filing for a $100 million Nasdaq IPO—but instead it will reap a deal worth $1.4 billion, counting upfront cash, Invitae shares and future milestone payments. The two companies plan to integrate their genomics, tumor profiling and liquid biopsy technologies through one, overarching service.

"From the beginning, Invitae's goal has been to aggregate the world's genetic tests into a single platform in service of our mission to bring comprehensive genetic information into mainstream medicine. Today, we take another major step forward in that effort,” Invitae co-founder and CEO Sean George said in a statement.

The transaction begins with $325 million in cash plus 30 million shares of Invitae common stock; an additional 27 million shares are linked to milestones. The move has been approved by the boards of both companies and is expected to close within several months, the companies said.

To help carry the acquisition, Invitae has set up a strategic financing with over $400 million in commitments from investors, led by Perceptive Advisors. Invitae has agreed to sell $275 million of stock in a private placement at $16.85 a share, supported by Casdin Capital, Deerfield Management, Driehaus Capital Management, Farallon, PBM Capital, Redmile Group, Rock Springs Capital, Soleus Capital and an unnamed institutional investor.

RELATED: ArcherDX expands co-marketing, in vitro diagnostics partnerships with Illumina

Invitae has also secured a credit facility for up to $200 million with Perceptive Credit Opportunities Funds. Following the deal’s announcement, Invitae’s stock rose nearly 50% from about $18 to over $26 a share.

“We are thrilled to unite with Invitae to form the leading hub for precision oncology, diagnostics, therapy optimization and monitoring, with an opportunity to accelerate both patient care and shareholder value," said ArcherDX’s co-founder and CEO Jason Myers.

ArcherDX currently counts over 325 unique products in its research services catalog and is developing in vitro cancer diagnostics with FDA submissions slated for later this year. The company’s Stratafide DX and Personalized Cancer Monitoring efforts have both received breakthrough device designations from the agency.

ArcherDX also recently launched separate collaborations with AstraZeneca and Bristol Myers Squibb to apply its minimal residual disease assays to the drugmakers’ clinical cancer research.

RELATED: Invitae to buy DNA-counseling chatbot developer Clear Genetics for $50M

Together, the two companies aim to offer research and clinical trial support to biopharma companies as well as biomarker identification and companion diagnostic development while providing test reports, consultations and genetic counseling through Invitae’s central laboratory.

"Integrating all aspects of cancer genetics can transform care for patients and the flexibility that comes from both centralized and decentralized capabilities will uniquely position Invitae to meet the needs of customers worldwide," said George. "By joining together, we will unite world-class capabilities in the hands of a talented team with complementary expertise and strong brands in service of a shared goal to improve healthcare for patients."