In a bold move to keep its business afloat amid towering debts, medical genetics giant Invitae has filed for Chapter 11 bankruptcy protection. The San Francisco-based company, once hailed as a trailblazer in the field of genetic testing, is courting buyers in a high-stakes bid to save what it can of its operations, according to the San Francisco Business Times.
Listing debts of a whopping $1.6 billion against assets of just $535.1 million, the saga of Invitae's financial woe is evidence of a fierce battle with a balance sheet gone rogue. The firm's shares, which once soared to dizzying heights, have crash-landed to a market capitalization of a mere $5.6 million. After a litany of layoffs and strategic cuts, President and CEO Ken Knight admitted in a statement obtained by the San Francisco Business Times, "We have been working diligently over the past 18 months to improve our cash position by realigning our portfolio and focusing on our most impactful business lines."
Invitae has the distinction of administering tests capable of interpreting nearly 2 million disease-associated genes for over 4.4 million patients. But despite its efforts towards restructuring, the company ultimately conceded to the debt pressures. The chapter 11 filing follows a thorough cost-cutting journey, including the slashing 1,200 jobs and divesting from its women's health and Ciitizen patient network business units.
The bankruptcy announcement was compounded by the reveal that key Senior Secured Noteholders have thrown in their lot to support Invitae's restructuring plan—a move crucial for the company's future. "These strategic initiatives have accelerated our path to positive cash flow to realize our potential as an industry-leading genetics platform," Knight said, signaling a glimmer of hope even as the firm negotiates a tightrope walk of financial recovery. Ana Schrank, Invitae's CFO, detailed in her declaration how rising inflation and increased operational expenses played critical roles in the company's downturn, a somber reflection of how even pioneering businesses aren't immune to economic adversity, as per Invitae's press release.
Ahead lies a complex journey for Invitae as it navigates bankruptcy proceedings, seeking a "stalking horse bidder" by March 29 and gearing up for a potential sale hearing on May 2.
