Dive Brief:
- Medical genetics firm Invitae sold its reproductive health assets to Natera for up to $52.5 million, the companies announced on Monday.
- Natera paid $10 million upfront. The agreement also includes up to $42.5 million in milestone payments and litigation credits.
- Invitae is selling the segment as it faces liquidity concerns. The sale is expected to reduce its operating expenses by $44 million, excluding one-time severance payments.
Dive Insight:
Invitae raised doubts about its ability to continue as a going concern in the third quarter. As of Sept. 30, the San Francisco-based company had $254.6 million in cash and equivalents, and it reported a net loss of $942.1 million that quarter.
The company formed a special committee with the board to explore its options, including raising capital, addressing debt and selling certain business assets. Since then, Invitae has sold health data platform Ciitizen and its reproductive health segment, which includes genetic tests to determine parents’ risk of passing on a condition and non-invasive prenatal screening.
TD Cowen analyst Dan Brennan expects the reproductive health assets to contribute about $103 million in total revenue in 2023, he wrote in a research note on Monday. For Austin, Texas-based Natera, which specializes in cell-free DNA testing, the acquisition “looks like a favorably priced deal and an incremental positive,” the analyst wrote.
Natera plans to transition Invitae’s customers to its own line of tests and prune unprofitable accounts, Brennan added.