Labcorp Acquires Assets from Bankrupt Invitae for $239 Million

Labcorp to Acquire Genetic Testing Assets from Invitae in $239M Deal

Labcorp, a prominent healthcare diagnostics company, has secured approval for the acquisition of select assets from Invitae, a genetic testing company. Invitae, which filed for Chapter 11 bankruptcy protection in February, will see its assets acquired by Labcorp for $239 million in cash, alongside other non-cash considerations. This strategic move is poised to enhance Labcorp's genetic specialty testing business, especially in the realms of oncology and rare diseases. Additionally, the acquisition is scheduled to be finalized in Q3, pending regulatory clearance. Noteworthy investment entities such as Softbank and Cathie Wood's Ark Investment Management have been backers of Invitae.

Key Takeaways

• Labcorp has approved to acquire select assets of Invitae in a $239M deal.
• The acquisition will expand Labcorp's genetic specialty testing, specifically in oncology and rare diseases.
• Invitae filed for Chapter 11 bankruptcy protection in February.
• The deal is expected to close in Q3, pending regulatory approval.
• Invitae is backed by Softbank and Cathie Wood’s Ark Investment Management.

Analysis

The acquisition of Invitae's assets by Labcorp will bolster its genetic specialty testing, particularly in oncology and rare diseases. Invitae's financial struggles, leading to Chapter 11 bankruptcy, may have prompted this sale. Notable investors like Softbank and Ark Investment Management, who backed Invitae, may face losses. This deal could encourage further consolidation in the genetic testing market. In the short term, Labcorp's stock prices might rise, while Invitae's may continue to fall. Long term, this acquisition could strengthen Labcorp's market position, offering advanced genetic testing solutions and improved patient care. However, regulatory approval and potential antitrust issues could pose challenges.

Did You Know?

• Chapter 11 bankruptcy protection: A provision of the U.S. Bankruptcy Code allowing a company to restructure its debts and operations while protected from legal actions by creditors.
• Genetic specialty testing: Diagnostic tests analyzing a person's DNA to identify genetic variations associated with specific diseases or conditions.
• Softbank and Cathie Wood’s Ark Investment Management: Noteworthy investors that have backed Invitae. Softbank is a Japanese multinational conglomerate with investments in technology and healthcare companies. Cathie Wood’s Ark Investment Management is a U.S. firm focusing on innovative technologies and companies, including those in healthcare and genetic testing sectors.