Profile

Invitae is a company that does genetic testing using kits. They test for things like Cancer Genetics, Rare Genetic Disease and Women's Health. They generate over 3 million samples per year and continue to grow. This makes them like the Google of Genomics information. They allow patients to share their information which can lead to patients getting matched with doctors or scientists who are doing clinical trials that might apply to them. This can provide powerful population level genetics to scientists and researchers alike who are doing research on these diseases.

Pipeline

They just replaced their CEO last year with Ken Knight. So far I like his strategy to cut costs and focus on growing the company in key markets. They have a lot of debt so he has a huge challenge ahead of him. They just did a refinancing of their debt to 2028. They cut costs significantly from $850 million a year in cash burn down to a projected $275 million for 2023. He has really turned around this company while maintaining a good growth rate. They continue to grow revenues while cutting costs.

Science

The Oncology space of genetic testing is expected to grow to over $30 billion a year market size. There is a huge genetics market for oncology as every tumor for every patient is unique. There is a need for multiple tests per patient throughout their course of treatment. There is a high level of relapse rates in cancer which will drive continued testing. The more we understand oncology the more important the need for genetic profiling of tumors becomes. This space will only continue to grow as personalized cancer treatments become more popular. One of the major current drivers of oncology is the Minimal Residual Detection (MRD) of cancer.

It's estimated that the Women's health space is about a $2.5 billion market. It's not the reason I would own this company or any other testing company. The key focus is on oncology.

The rare Disease market is one of the primary needs for genetic testing, but it's not even remotely as big as the oncology market.

Valuation

Cash $557 million

They project a 2023 run rate of $500 million a year in sales with strong ongoing growth. At 5x sales for a typical price to sales for biotech companies, that comes to $2.5 billion in valuation based on current sales.

They have about $1.5 billion in debt. That is a negative to the valuation and has to be deducted.

All in, that is a $1.557 billion market cap. Based on the 246.3 million shares outstanding, that comes to $6.32.

Partnerships

None

Company Website Links

Press Releases

Events & Presentations

SEC Filings