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Natera Acquires Reproductive Health Assets From Invitae for up to $52.5M

NEW YORK – Natera and Invitae announced separately on Monday that they completed the sale of certain Invitae reproductive health assets to Natera, including carrier screening and noninvasive prenatal screening.

The transaction is valued at approximately $52.5 million, which includes a $10 million upfront payment made by Natera to Invitae, as well as $42.5 million in potential milestone payments including cash and credits related to ongoing litigation. As part of the transaction, Invitae will begin transitioning its noninvasive prenatal screening and carrier screening customers to Natera.

Austin, Texas-based Natera recently won an injunction against Invitae and ArcherDx, ordering those companies to stop using certain products containing technology patented by Natera and sold as the Invitae Personalized Cancer Monitoring assay. In a filing with the US Securities and Exchange Commission related to the asset sale, Natera disclosed that it has agreed to pay Invitae cash and/or litigation-related credits, if any, for a combined value of up to $20 million, following passage of a final and non-appealable order disposing of all claims in that case.

Furthermore, any liabilities attributed by jury to Invitae for past damages related to infringing sales of the Invitae PCM in that case will be limited to a maximum of $20 million. Finally, the agreement stipulates that by June 15, 2024, Natera will pay Invitae a milestone payment of up to $22.5 million based on the volume of testing services that Natera is able to retain.

San Francisco-based Invitae expects the transaction to help reduce its operating expenses by approximately $44 million annually, excluding one-time severance-related payments.

Invitae has been seeking ways to reduce its cash burn and operating expenses over the past two years, starting with a business restructuring in mid-2022. In December of last year, it divested its Ciitizen medical records platform and laid off 15 percent of its workforce, which, together with other spending cuts in technology and professional services, were estimated to result in annualized cash savings of approximately $90 million to $100 million, excluding one-time severance-related payments of approximately $10 million.

"Today's announcement further helps us streamline operations and focus our resources on our strengths of clinical germline genetic information and superior variant interpretation in support of millions of oncology and rare disease patients," Ken Knight, president and CEO of Invitae, said in a statement.