Shares of Invitae rallied more than 25% this week, a sharp rise that came after Ark Invest’s Cathie Wood named the company one of its most undervalued stocks in a CNBC interview on Monday.
As of Thursday, Invitae was the 11th largest stake in Wood’s flagship fund, the Ark Innovation ETF (ARKK), giving it greater weight than better-known companies such as DocuSign and PayPal.
The well-watched investor and her company are known for their strategy of investing around “disruptive innovation,” and a strong performance last year has seen billions of new dollars flow into Ark’s family of funds.
In a CNBC interview on Friday, Invitae’s CEO explained the mission and long-term goals of the genetic testing company, and provided insight into why Wood is optimistic about his outlook.
“Genetic information is fundamental to improving people’s health outcomes and lowering costs, and we continuously strive for the idea of getting that information into mainstream medical care, for everyday use,” said Sean George. Closing Bell “. He co-founded the San Francisco-based company in 2010, and it went public in 2015.
Invitae reported annual sales of $ 279.6 million in 2020, up from $ 216.8 million in the previous year. The net loss increased by $ 608.9 million last year, compared to $ 242 million in 2019.
While genetic information can be a powerful tool in fighting a variety of diseases, George said high costs have historically limited its availability and, by extension, the impact it can have. However, he said recent gene sequencing innovations have laid the groundwork for greater accessibility. He compared it to semiconductor improvements that jump-started the computer and network industry in the 1970s and early 1980s.
“That has … enabled application providers like us … to change what was fundamentally a rationed commodity in healthcare in the past – genetic information, species in a niche, test-by-test, sample-by-sample lab industry – into something much more like an information industry, ”said George.
George, who is a Ph.D. in molecular genetics, Invitae hopes to advance its tests to allow patients and doctors to use them proactively 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 business, he said.
“The tremendous importance and central importance of genetic information in healthcare is about to emerge – I know it for sure in the next five to ten years – as an opportunity to get the right therapy earlier. for individuals who will benefit from it, identify people at risk, and establish monitoring and prevention modalities to certainly delay, if not even prevent, disease onset, and generally provide a core understanding of the risks that run in families, ”he added.
Ark Invest has positions in a range of companies engaged in medical innovation outside of Invitae. Wood’s firm has an ETF dedicated to it called the Genomic Revolution ETF (ARKG). Starting Thursday, it includes Teladoc, Regeneron Pharmaceuticals and CRISPR Therapeutics. Invitae is also in that fund, currently the 16th largest holding.
Shares of Invitae closed Friday’s session 0.5% at $ 42.70. Despite the stock’s big gains this week, it remains below its all-time high of $ 61.59 on December 14. It is up nearly 260% in the last 12 months.