Invitae’s share price fluctuates despite genomics coming together

Iby nvitae Corporation [NVTA] The share price failed to reverse its recent downtrend in early April, despite a series of positive announcements from companies, including the acquisition of genomics company Genosity and securing of ‘a considerable investment of $ 1.15 billion.

Shares of the genetic testing company have risen 2.3% to $ 39.07 throughout the month so far (as of the April 14 close), after falling 4.8% in March.

The Invitae share price got off to a positive start until 2021, climbing 18.4% in January. However, the stock changed direction the following month and ended February down 19%.

As of April 14, the Invitae share price was down 6.5% year-to-date, underperforming both the broad market and the genomics theme. The S&P 500 rose 9.8% over the same period, while the ETF Global X Genomics & Biotechnology [GNOM] was down 4.5%.

Invitae had a 2.91% weight in the genomics fund as of April 14 and a 3.05% weight in the ETF Global X Telemedicine & Digital Health [EDOC], making the latter its largest allocation according to ETF.com data. The telemedicine fund has increased 2.8% since the start of the year (until April 14).

Expanding genetic and oncology testing

Invitae kicked off in April by announcing the launch of a new program that would sponsor genetic testing for neurodegenerative diseases in the United States, Canada, Australia and Brazil.

Investors appeared to react positively to the news, and the Invitae share price jumped 2.6% on April 1, the day of the announcement. The stock was increased again on April 5 by 3.1%, after the company announced its intention to acquire Genosity.

Invitae said it has reached an agreement with the innovative genomics software and laboratory solutions company to accelerate time to market and decentralize its oncology offerings.

The combination will see Invitae acquire Genosity for approximately $ 200 million, including $ 120 million in cash and $ 80 million in Invitae shares. Certain Genosity employees will also receive restricted stock units up to a value of $ 15 million.

Invitae will leverage Genosity’s complex sequencing-based test solutions to ensure patients receive “complete and timely genetic information that is used to guide their care, from diagnosis to monitoring for disease recurrence,” said said Robert Nussbaum, medical director of Invitae statement.

“With Genosity, we believe our new capabilities and combined capabilities will help us reach that day sooner for patients around the world,” he added.

On the same day, Invitae also announced a $ 1.15 billion investment – via senior convertible bonds due April 2028 – from a small group of investors led by SB Management, a subsidiary of SoftBank Group. [9984.T].

The Notes will have an initial conversion price of $ 43.18 per share, which is a 20% premium over the five-day average of the share as of April 1, 2021.

Robert Abbott, president of Abbott Consulting, noted in Seeking Alpha in February that Invitae saw increased interest from institutional investors. At the end of December last year, 379 institutional investors, including Ark Invest, Baker Bros. Advisors and Vanguard Group, held significant stakes in the stock. Abbott referenced data from the Nasdaq indicating that 92.6% of Invitae shares were held by institutional investors.

A genomic revolution

As the global genomics market is expected to reach $ 62.9 billion by 2028, according to a report from Grand View Research, companies like Invitae that develop next-generation sequencing tools to screen genes are well positioned to benefit from it.

Oppenheimer analyst Kevin DeGeeter raised his share price target to $ 48 following the April 5 announcements. He gave the stock an outperformance rating, but said it was not based on the company’s large investment of SoftBank.

“We generally consider the expansion of the balance sheet to be sufficient to fund operations and profitability as support for multiple expansion of revenues,” he wrote in a note to clients seen by Precision Oncology News.

The Invitae share price was rated as a strong buy among four analysts on TipRanks, with a price target of $ 50.33, which is a 28.8% gain from its April 14 close.