NEW YORK – Invitae announced Tuesday morning that it will acquire consumer health technology company Ciitizen for $325 million in a bid to make it easier for patients to collect their genomic and clinical information.
Ciitizen, which is backed by several investors, including a16z, Section 32, and Verily, is building a digital platform that will enable patients to collect, store, and share their medical records. Invitae has been expanding the genomic content of its testing platform and investing in software and data science capabilities to analyze patient data, and said that Ciitizen can help it create a centralized hub for medical data that can inform research and improve medical decision-making.
"We believe combining Ciitizen's state-of-the-art, transparent, and patient-consented platform with our technologies and services will accelerate our evolution into a genome information company that informs healthcare throughout one's life," Sean George, Invitae's cofounder and CEO, said in a statement. "This would give us the ability to engage patients, create an innovative patient-centered data ecosystem, and deliver better outcomes for everyone. Invitae views the acquisition of Ciitizen as an important part of its strategy to be the industry leader across the genetic testing, software, and health information technology spaces."
Invitae said in a statement that it has raised more than $1.4 billion since the start of the year, which it plans to spend partly on acquiring new capabilities that will allow it to achieve its vision of aggregating all genetic tests into one service. The Ciitizen acquisition is slated to close this month and has the unanimous approval of both companies' board of directors.
Under the terms of the deal, Invitae will acquire Ciitizen for around $125 million in cash and 7,070,000 shares of common stock based on average closing price before the agreement date. Invitae will also issue approximately $225 million in restricted stock units to Ciitizen employees who join Invitae as part of the acquisition. The RSUs, which will cover up to 8,125,000 shares of Invitae common stock and vest in three tranches, will be given to 99 recipients, while Ciitizen CEO Anil Sethi will receive RSUs comprising 2,011,000 shares of Invitae common stock.
The deal comes at a time when real-world patient data is becoming increasingly valuable in healthcare research. However, Ciitizen emphasized that its platform allows patients to decide which actors in the healthcare system have access to their medical information.
"Patients leave a breadcrumb trail of records behind them, and we believe access to this real-world data is key to personalized therapeutics in the future," Sethi said in a statement. "Democratization of patient-consented data is expected to improve outcomes by providing access to third parties for whom the patient has granted consent. Unlike many health data companies, we operate on the premise that it's the patient's data, not ours."
In a call to discuss the deal, Sethi explained that the acquisition will expedite Invitae's aim to quickly grow its platform by streamlining patients' ability to organize their health data, particularly unstructured data, such as physicians' notes, where he believes the real, untapped value lies in healthcare. Invitae will maintain the Ciitizen platform as an open system and allow it to bring in data from a variety of labs, including Invitae's competitors. "Open is the way to go to increase the impact," George said. The companies expect that allowing consented third-party access to patients' genomic and clinical data can lead to the development of new tools and services, which in turn will grow Invitae's business.
Karthik Suri, Invitae's chief digital officer, added that stakeholders interested in the patient-consented data can access it via a subscription model. This will provide an additional revenue source for Invitae in the coming years, though Suri expects the revenue to be minimal in the first few years after the deal closes. Ciitizen currently compensates patients for sharing their data, and George said that Invitae likes this idea and will look for ways to continue this model.
Currently, Ciitizen works with disease-specific advocacy groups to encourage patients, specifically those with cancer and rare pediatric diseases, to use its platform to gain access to their medical records and identify clinical trials. Invitae plans to expand the platform's utility into other disease settings.
In early Tuesday morning trading on the Nasdaq, Invitae's stock price was up nearly 1 percent at $31.49.