Invitae’s shares rose more than 25% this week, a sharp rise after Ark Invest’s Cathie Wood called the company one of its most undervalued shares in an interview with CNBC on Monday.
Invitae was the 11th largest stake in Wood’s flagship fund, Ark Innovation ETF (ARKK), on Thursday, giving it greater weight than better-known companies like DocuSign and PayPal.
The close investor and his company are known for their strategy of investing around “disruptive innovation”, and strong performance in the past year has caused billions of new dollars to flow into Ark’s family of funds.
In an interview with CNBC on Friday, the CEO of Invitae explained the mission and long-term goals of the genetic testing company, offering an insight into why Wood is optimistic about his prospects.
“Genetic information is of fundamental importance for improving people’s health care outcomes and reducing costs, and we are relentlessly pursuing the idea of putting that information into conventional medical care for everyday use,” said Sean George in “Closing Bell “. He co-founded the San Francisco-based company in 2010, and it went public in 2015.
Invitae reported annual revenues of $ 279.6 million in 2020, up from $ 216.8 million in the previous year. Its net loss increased $ 608.9 million last year, compared to $ 242 million in 2019.
Although genetic information can be a powerful tool in combating various diseases, George said that high costs have historically limited its availability and, by extension, the impact it can have. However, he said, recent innovations in gene sequencing have laid the foundation for more accessibility. He compared this to semiconductor improvements helping to kick-start the computing and networking industry in the 1970s and early 1980s.
“It allowed … application providers like us … to change what in the past was fundamentally a rationed healthcare asset – genetic information, sort of in a niche, test by test, sample by sample, lab industry created – for something that looks a lot more like an information industry, “said George.
George, who has a Ph.D. in molecular genetics, said Invitae hopes to take his tests to the point where patients and doctors can proactively use them in large numbers. That way, even if the cost of each test is cheaper, Invitae will have the scale to generate enough operating cash to thrive as a company, he said.
“The enormous importance and central importance of genetic information in the area of health is about – I am sure in the next five to 10 years – it will come to the fore as an ability to get the right therapy earlier for individuals who can benefit, to identify people at risk and implement monitoring and prevention modalities to certainly delay, if not prevent, the onset of the disease and generally provide a basic understanding of the risk that occurs in families, “he added.
Ark Invest holds positions in a number of companies working on medical innovation in addition to Invitae. Wood’s company has an ETF dedicated to him, called the Genomic Revolution ETF (ARKG). As of Thursday, it includes Teladoc, Regeneron Pharmaceuticals and CRISPR Therapeutics. Invitae is also part of this fund, and is currently its 16th largest share.
Invitae’s shares closed Friday’s session with a 0.5% drop to $ 42.70. Despite the stock’s big gains this week, it remains below its highest high of $ 61.59 on December 14. It has risen by almost 260% in the past 12 months.