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Invitae Divests Ciitizen Health Data Platform Amid Further Cuts

Update: This story has been updated to add the percentage of employees to be laid off and the related cost of severance.

NEW YORK – Invitae announced late Wednesday that it has divested its Ciitizen medical records platform as part of a program of strategic cost cuts, which will also include reductions in its workforce and other operating expenses.

Invitae acquired consumer health tech firm Ciitizen in 2021. The company's platform enabled users to gather, store, and organize their own medical records in a single place online.

Invitae said in a statement that it transferred Ciitizen assets to a newly formed business established by the leadership team of the Ciitizen business and funded by a group of venture capital investors. The new company, the name of which is not yet known, will continue to expand the Ciitizen platform globally and intends to collaborate with Invitae on certain key initiatives. Invitae holds a minority equity interest in the new company.

The San Francisco-based company had previously used the platform in multiple other collaborations, including supporting pharmaceutical company Praxis' investigational new drug application for an experimental treatment for pediatric patients with early-onset SCN2A developmental and epileptic encephalopathy and to help AstraZeneca identify new treatment strategies for cholangiocarcinoma.

"We continue to believe that patient-consented data is growing in importance for improving patient care and that this new company will be able to take the platform to the next level," Ken Knight, president and CEO of Invitae, said in a statement.

Additionally, the company announced that it implemented workforce and operating expense reduction efforts aimed at streamlining processes across its core platforms.

In an 8-K filed with the Securities and Exchange Commission after market on Wednesday, Invitae said that it would cut approximately 15 percent of its workforce. The company said that it anticipated the layoffs and Ciitizen transaction to result in one-time severance related payments of approximately $10 million. The company also expects to incur non-cash charges which it said it is currently unable to estimate.

Together with other spending cuts in technology and professional services, Invitae estimates annualized cash savings of approximately $90 million to $100 million, excluding one-time severance-related payments.

"The actions announced today will assist in streamlining our operations and reducing our cash burn," Knight said. "While these moves unfortunately involve a reduction in our workforce, we are committed to working closely with those impacted to ensure a smooth transition for them and for our customers and patients."

In a quarterly earnings call with investors last month, Knight highlighted growth opportunities stemming from the use of the Ciitizen platform while lowering the company's cash burn guidance, which he attributed to the company trimming unproductive business units.

The firm had previously undertaken a restructuring of its business in mid-2022 that was expected to generate approximately $326 million in annual cost savings by the end of 2023, enabling Invitae to extend its cash runway to the end of 2024. As part of that effort, Invitae laid off 1,000 employees and in late 2022 sold its portfolio of Archer next-generation sequencing research-use assays to Integrated DNA Technologies (IDT) for $48 million.