The rumors are true: A week after reports first surfaced that Invitae was on the brink of filing for bankruptcy, the genetic testing company has done exactly that.
In a release it put out late Tuesday night, Invitae said it had filed for Chapter 11 bankruptcy to protect the business as it pursues “an efficient and value-maximizing sale process.” The company said it plans to continue operating as usual despite the bankruptcy declaration and throughout the sale.
“We have been working diligently over the past eighteen months to improve our cash position by realigning our portfolio and focusing on our most impactful business lines,” CEO Ken Knight said in the release. “These strategic initiatives have accelerated our path to positive cash flow in order to realize our potential as an industry-leading genetics platform. However, we still need to address the company’s debt position through these Chapter 11 proceedings.”
He added, “I want to thank our incredibly talented and hard-working employees for their continued focus on our patients and customers.”
Invitae said it plans to fund its ongoing operations using its cash on hand. According to its most recent financial report, released after the third quarter of 2023, the company had about $168 million in cash, cash equivalents and restricted cash as of Sept. 30, well below the $267.5 million it had at the start of that year.
Meanwhile, as of the end of the third quarter, Invitae’s total liabilities stood at more than $1.6 billion.
The company also has yet to turn a profit since its 2012 debut. It reported a net loss of more than $3.1 billion for all of 2022 and, by the end of the first nine months of 2023, had already tallied a loss of about $1.34 billion for the year.
As it struggled to keep its head above water in recent years, Invitae implemented a series of cost-cutting moves. In mid-2022, it made plans to lay off more than 1,000 employees, narrow the scope of its business and reduce its physical footprint, all with an aim of cutting about $326 million from its annual expenses.
Another round of layoffs took place at the end of 2023, along with the divestment of Invitae’s Ciitizen health data platform and “other operating expense reductions,” for estimated savings between $90 million and $100 million per year. Those moves came shortly after Invitae disclosed in its third-quarter earnings report that its board had assembled a special committee that was “exploring a number of options, including, but not limited to, raising capital, asset sales, business and R&D refocusing efforts, capital expenditure and operating expense reductions and addressing its debt obligations.”
Invitae’s latest attempt to slash expenses came at the start of this year when the company announced it had agreed to sell off its reproductive health assets to Natera for $10 million up front, plus up to $42.5 million more in additional payouts—while cutting around $44 million from its annual spending.