Invitae, a medical genetic testing company, has filed for Chapter 11 bankruptcy and intends to continue the case without disrupting operations using cash on hand and while seeking to sell its business.
The San Francisco-based company is seeking approval from the U.S. Bankruptcy Court for the District of New Jersey to use its cash on hand to fund the case.
In its bankruptcy petition, the company listed assets of $500 million to $1 billion, but liabilities of $1 billion to $10 billion.
“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,” Ken Knight, president and chief executive officer of Invitae, said in a statement.
“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. I want to thank our incredibly talented and hard-working employees for their continued focus on our patients and customers.”
THE LARGER TREND
Invitae went public in early 2015, initially listing on the NASDAQ for $17.80 per share. In 2020, the stock reached a high of $56.60 per share, the highest it’s seen since being listed.
In 2021, Invitae announced it signed a definitive agreement to acquire Ciitizen, a startup that helps users access and organize their health records, for about $325 million. The terms of the deal included around $125 million in cash and approximately 7,070,000 shares of Invitae common stock.
Invitae said at the time that it would also issue about $226 million in restricted stock units to new employees who join the company as part of the acquisition.
The company had two rounds of layoffs between 2022 and 2023 in order to cut costs and, last year, divested Ciitizen, which it said would save an estimated $90 to $100 million per year.
The company’s stock price has plummeted and closed at $0.019 per share as of today.
Last week, the New York Stock Exchange announced it was beginning the process of delisting the company’s shares due to the stock being at “abnormally low price levels.”
Since emerging on the market in 2012, the genetic test-maker had yet to turn a profit, and in 2023 reported more than a $1.34 billion net loss for the first nine months of the year.
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