Invitae (NYSE: NVTA), a leading medical genetics company, today announced it has entered into a definitive agreement to acquire Genosity Inc. (“Genosity”), a genomics company offering innovative software and laboratory solutions to enable development and deployment of complex sequencing based tests. The acquisition would bring Genosity’s specialized capabilities onto the Invitae platform to accelerate the time to market and decentralization of Invitae’s personalized oncology offerings, including somatic and germline offerings poised to help transform how cancer is diagnosed, treated and monitored.

Invitae’s (NVTA) mission is to bring comprehensive genetic information into mainstream medical practice to improve the quality of healthcare for billions of people. (PRNewsFoto/Invitae Corporation)

“Each individual cancer is unique. The way we diagnose and treat it must be as well,” said Robert Nussbaum, M.D., chief medical officer of Invitae. “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. Together with Genosity, we believe our combined novel capabilities and capacity will help us reach that day sooner for patients around the globe.”

Genosity has built an industry-leading suite of highly specialized capabilities designed to support the use of next generation sequencing in oncology development and clinical care, ranging from basic research to clinical testing for regulated studies. The company currently works with Invitae on a number of projects and clinical trials. Becoming a part of Invitae is expected to provide important advantages for the development and launch of Invitae’s oncology products, which include three devices under development that have received breakthrough device designation from the U.S. Food and Drug Administration (FDA), including the capacity, speed, and efficiency required to serve mainstream medicine cost effectively both with central laboratory services and decentralized kitted products.

“Genosity, under the insightful leadership of Marc Grodman, MD, has been able to develop solutions which enable broader adoption of genomic testing. Our laboratory services, end-to-end software solutions and data management platform are an ideal fit as Invitae develops best-in-class options for MRD-based cancer monitoring,” said Robert D. Daber, Ph.D., president and chief technology officer of Genosity. “In Invitae we have found a like-minded partner focused on making genomics more affordable and accessible worldwide.”

Maximum flexibility to accelerate the future of cancer care worldwide

Invitae is currently developing its Personalized Cancer MonitoringTM (PCM) platform as an in vitro diagnostic (IVD) intended for regulatory submission. PCM analyzes a patient’s unique genetic profile of their specific cancer and uses it to monitor their blood to detect cancer recurrence early when it is most curable. Invitae’s PCM test, if approved for use, will be augmented by Genosity technology and capabilities to distribute PCM globally, increasing accessibility and reducing turnaround time. With this capability, we believe Invitae will be uniquely able to meet the needs of cancer patients worldwide, whether their clinicians send out to a central testing service or rely on tests that are completed locally by in-house laboratories.

In January 2020, Invitae received Breakthrough Device Designation from the FDA for PCM.

Transaction Terms

Under the terms of the agreement, Invitae will acquire Genosity for approximately $200 million, consisting of (i) approximately $120 million in cash and (ii) approximately $80 million in shares of Invitae common stock (based upon a trailing average closing price prior to the date of closing but subject to certain potential adjustments), with such stock and cash consideration subject to reduction based upon certain debt and transaction expenses of Genosity determined at closing.

The transaction, which has been unanimously approved by the Boards of Directors of both companies, is expected to close in the second quarter, subject to customary closing conditions including the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

In connection with the transaction, Invitae will grant restricted stock units (“RSUs”) having a value of up to $15 million to certain continuing employees of Genosity. These RSUs will be granted under Invitae’s 2015 Stock Incentive Plan (the “2015 Plan”), which is being amended to create an additional pool of shares of Invitae common stock to be used exclusively for the grant of inducement awards in compliance with New York Stock Exchange Rule 303A.08 (“Rule 303A.08”). These RSUs were approved by the Invitae Board of Directors and will be granted as an inducement material for continued employment following the acquisition of Genosity in reliance on the employment inducement exemption under Rule 303A.08. These RSUs will vest annually over three years and, in certain instances, the number of RSUs that vest on each vesting date will be calculated based upon a trailing average closing price prior to the date of closing of the Genosity acquisition.