Invitae's double deal day: A genomics buyout and $1.2B in SoftBank-led financing

DNA helix forming inside a test tube
Invitae's deal with Genosity includes $120 million in cash and about $80 million in stock, while its agreement with a small group of investors led by SoftBank's subsidiary aims to add more than $1.1 billion to its balance sheet. (Getty Images)

It's been a busy day for Invitae. The genetic testing provider inked a $200 million buyout and wrapped up a hefty investment from a group of backers marshaled by SoftBank.

Just how hefty? $1.15 billion, enough to do a few more deals like the one it announced Monday.

The company inked a $200 million deal for lab sequencing and software developer Genosity—but, with its new capital to spend, it’s probably not sweating the upfront cost.

Led by SoftBank subsidiary SB Management, the $1.15 billion in notes will come due in April 2028, bearing 1.5% interest per year. With an initial conversion price of $43.18 per share, they represent a 20% premium over a five-day average through the end of March, the companies said.

The investment will help Invitae expand its platforms and services, including “through both in-house development and the addition of complementary companies and technologies,” co-founder and CEO Sean George said in a release. The company's stock rose more than 7% following the news before closing at just over $40.

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"Invitae has a definitive head start in the rapidly expanding market for clinical genetic sequencing,” SB Management CEO Akshay Naheta said, adding that its line of diagnostics could also help uncover how genomics may predispose populations for certain diseases.

The company hopes to maintain that lead by absorbing Genosity to help drive access to personalized cancer testing. That deal includes about $120 million in cash and the remainder in shares of Invitae common stock, and is expected to close before the end of June.

Genosity brings tools and services for clinical research applications, such as technology platforms for studying somatic and germline mutations, for the development of complex sequencing-based tests aimed at unraveling the makeup of different cancers.

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Invitae previously worked with Genosity on multiple clinical trials, and the companies plan to move forward together on three oncology projects currently under development, including planned centralized laboratory services and distributable diagnostic kits.

One test, Invitae’s Personalized Cancer Monitoring platform, which previously received a breakthrough designation from the FDA, is an in vitro diagnostic designed to analyze samples of a patient’s tumor and then use the information to build an individualized blood test to screen for its recurrence.

"Each individual cancer is unique. The way we diagnose and treat it must be as well," said Invitae Chief Medical Officer Robert Nussbaum, M.D. "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.”