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Invitae Acquires Data Company AltaVoice

NEW YORK (GenomeWeb) – Invitae announced today that it has acquired privately owned data company AltaVoice. Under the terms of the deal, Invitae purchased all of AltaVoice's stock in exchange for $5 million in Invitae common stock and up to an additional $10 million in Invitae common stock if certain future milestones are met.

The acquisition will add to Invitae's Genome Network, the company said, which connects patients, clinicians, advocacy organizations, researchers, and pharma companies to advance the understanding of hereditary disease and its possible treatments.

AltaVoice runs several patient-centered programs, including Patient Insights Networks (PINs), which allow research organizations to track patient data and recruit subjects for clinical trials. Since 2007, the company has developed programs for more than 400 diseases, and has worked with the National Institutes of Health, Patient-Centered Outcomes Research Institute, and biotech and pharmaceutical companies.

Invitae plans to combine AltaVoice's database of more than 75,000 patients with its own testing business. The two companies plan to build a more robust network for combining genetic information and clinical data. Patients who participate in the combined network will be able to access aggregate and customized information based on their genotype and phenotype and participate in new research, clinical trials, and treatment planning.

"We are very excited to welcome AltaVoice to Invitae," said Invitae Chairman and CEO Randy Scott in a statement. "AltaVoice's proven ability to generate insights based on permission-based patient- and clinician-provided data, in combination with Invitae's genetic testing platform and relationships with clinicians, biopharma companies, and payers, can be powerful for both patient care and research."

Invitae also announced today that it has delivered approximately 57,000 billable tests in 2016, representing a 200 percent year-over-year growth in test volume over the 19,000 billable tests it delivered in 2015, and meeting its volume guidance of 50,000 to 70,000 billable tests.

The firm attributed the growth to a large expansion of its test menu to more than 1,100 genes, and coverage agreements with large insurance companies for its tests. The total number of lives covered by payors for Invitae's tests increased to more than 175 million during 2016, it added.

The company also delivered approximately 20,000 billable tests in the fourth quarter.

"With major payers on board with Invitae, this provides us with what we expect will be a revenue ramp that outpaces our volume growth in 2017," Scott noted. "Furthermore, based on our preliminary Q4 financials we expect to report positive gross margins in the fourth quarter of 2016, and we now have a clear path to profitability by the end of 2018."

The company also said that it has entered into an agreement with biotech firm BioMarin. No details were disclosed.

In a note to investors, Cowen said Outperform-rated Invitae continues to execute according to plan, and continues to improve consistently and materially, adding, "Now that major payors have been brought on board, 2017 could be the year [when] we see an inflection in revenue to go along with the company’s efforts to expand its scope beyond oncology panels."

Invitae's stock fell more than 2 percent to $8.49 in morning trading on the New York Stock Exchange.