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Invitae Offers $55M for Singular Bio to Expand Prenatal Test Business

Xconomy San Francisco — 

Invitae, a maker of a wide array of low-cost genetic medical tests, has reached a deal to acquire Singular Bio to expand its ability to screen babies for disease during the early months of pregnancy.

Invitae (NYSE: NVTA) said Monday it will pay $55 million in cash and stock to acquire privately held Singular Bio. Both companies are based in San Francisco. In addition, Invitae will pay up to $90 million in stock to Singular Bio employees who stay with Invitae after the acquisition. Those stock awards are tied to milestones for the Singular technology.

Singular Bio’s technology, which is still under development, analyzes each molecule of a patient’s DNA instead of analyzing a DNA sample in aggregate, which the company says offers greater sensitivity in detecting disease. The trick is to perform more sensitive analysis at higher volume. Invitae, which already offers noninvasive prenatal screening for $99, is banking that it can provide Singular Bio’s improvements, keep costs down, and expand its customer base.

In a research note, SVB Leerink analyst Puneet Souda wrote that Invitae has an estimated 40 percent of a prenatal screening market that is largely underpenetrated. Souda added that Singular Bio’s technology could also be applied to other types of genetic testing, which would further expand Invitae’s footprint.

Invitae says the current expense of prenatal screening has limited such tests to women in higher-risk groups. A commercial launch of the Singular Bio genetic test is expected in the first half of 2021.

Shares of Invitae were up 3.8 percent midday Monday. Invitae said the acquisition is expected to close in coming weeks.

Photo by Flickr user Christian Haugen via a Creative Commons license