Acquisition advances Labcorp's specialty
testing strategy in key areas such as oncology and rare
diseases
Key milestone reached in Invitae's Chapter
11 process
BURLINGTON, N.C. and SAN FRANCISCO, May 7, 2024
/PRNewswire/ -- Labcorp (NYSE: LH), a global leader of innovative
and comprehensive laboratory services, and Invitae (OTC:NVTAQ), a
leading medical genetics company, announced today that the
United States Bankruptcy Court has approved the previously
announced bid by Labcorp to acquire assets of Invitae.
"As a leading medical genetics company, Invitae has advanced
genomics-based testing solutions across its network," said
Mark Schroeder, Executive Vice
President and President of Diagnostics Laboratories and Chief
Operations Officer of Labcorp. "Invitae will complement our
business and advance our leadership in genetic screening,
diagnostics and specialty testing. This supports our goal to
provide best-in-class resources and health insights for patients
and physicians."
"The Court's approval of our proposed sale to Labcorp is a
positive step forward in our restructuring process," said
Ken Knight, President and Chief
Executive Officer of Invitae. "Looking ahead, I am confident that
with this transaction, Labcorp will help ensure our
industry-leading genetics platform is available to all who can
benefit from it."
The transaction is expected to bolster Labcorp's genetic
specialty testing capabilities, especially in key health areas such
as oncology and rare diseases, aimed at enhancing patient care and
providing insights into their health with improved accessibility to
genetic data. The transaction also strengthens Labcorp's ability to
utilize genetic data to enhance and support clinical trials and
treatment regimens.
Pursuant to the asset purchase agreement, Labcorp will acquire
select assets of Invitae on a going concern basis for $239 million in cash consideration, plus other
non-cash consideration. Invitae and Labcorp anticipate the sale
will be completed in the third quarter of 2024, subject to
customary closing conditions and applicable regulatory
approvals.
Additional information on Invitae's chapter 11 case can be found
at www.kccllc.net/invitae.
Invitae is advised in this matter by Kirkland & Ellis LLP as
legal counsel, Moelis & Company LLC as investment banker and
FTI Consulting, Inc. as financial and communications
advisor. Citi is serving as Labcorp's financial
advisor and Hogan Lovells and Kilpatrick
Townsend are serving as Labcorp's legal counsel.
About Labcorp
Labcorp (NYSE:
LH) is a global leader of innovative and comprehensive
laboratory services that helps doctors, hospitals, pharmaceutical
companies, researchers and patients make clear and confident
decisions. We provide insights and advance science to improve
health and improve lives through our unparalleled diagnostics and
drug development laboratory capabilities. The company's more
than 67,000 employees serve clients in approximately 100 countries,
provided support for 84% of the new drugs and therapeutic products
approved in 2023 by the FDA and performed more than 600 million
tests for patients around the world. Learn more about us
at www.labcorp.com.
About Invitae
Invitae (OTC: NVTAQ)
is a leading medical genetics company trusted by millions of
patients and their providers to deliver timely genetic information
using digital technology. We aim to provide accurate and actionable
answers to strengthen medical decision-making for individuals and
their families. Invitae's genetics experts apply a
rigorous approach to data and research, serving as the foundation
of their mission to bring comprehensive genetic information into
mainstream medicine to improve healthcare for billions of
people.
To learn more, visit invitae.com and follow for
updates on LinkedIn, X, Instagram, and
Facebook @Invitae.
Labcorp Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements,
including but not limited to statements with respect to the terms
of the transaction, its approval by the bankruptcy court, and the
benefits to the company, patients, and physicians if the
transaction is completed.
Each of the forward-looking statements is subject to change
based on various important factors, many of which are beyond the
company's control, including without limitation: (i) the risk that
the transaction may not be completed in a timely manner or at all;
(ii) expected timing to closing; (iii) the failure to satisfy
closing conditions, including the receipt of certain regulatory
approvals; (iv) the occurrence of any event, change or other
circumstance that could give rise to the termination of the
transaction agreements; (v) uncertainties as to the completion and
timing of the company's planned holding company reorganization
(Reorganization); (vi) the effect of the announcement of the
Reorganization on the company's business generally; (vii)
unexpected issues that arise in the continued planning for the
Reorganization; (viii) market reaction to the announcement, updates
on, and planning for the Reorganization; (ix) the failure to
receive tax-free treatment with respect to the spin-off for U.S.
federal income purposes; (x) the impact of spin-off related items;
(xi) potential difficulties with employee retention; (xii) the
trading price of the company's stock, competitive actions and other
unforeseen changes and general uncertainties in the marketplace;
(xiii) changes in government regulations, including healthcare
reform; (xiv) customer purchasing decisions, including changes in
payer regulations or policies; (xv) other adverse actions of
governmental and third-party payers; (xvi) changes in testing
guidelines or recommendations; (xvii) federal, state, and local
government responses to the COVID-19 pandemic, and the volume of
COVID-19 Testing performed by the company; (xviii) the impact of
global geopolitical events; (xix) the effect of public opinion on
the company's reputation; (xx) adverse results in material
litigation matters; (xxi) the impact of changes in laws and
regulations applicable to the company; (xxii) failure to maintain
or develop customer relationships; (xxiii) the company's ability to
develop or acquire new products and adapt to technological changes;
(xxiv) failure in information technology, systems, or data
security; (xxv) the impact of potential losses under repurchase
agreements; (xxvi) adverse weather conditions; (xxvii) the number
of revenue days in a financial period; (xxviii) employee relations;
(xxix) personnel costs; (xxx) inflation; (xxxi) increased
competition; and (xxxii) the effect of exchange rate fluctuations.
These factors, in some cases, have affected and in the future
(together with other factors) could affect the company's ability to
implement the company's business strategy, and actual results could
differ materially from those suggested by these forward-looking
statements. As a result, readers are cautioned not to place undue
reliance on any of the forward-looking statements. The company has
no obligation to provide any updates to these forward-looking
statements even if its expectations change. All forward-looking
statements are expressly qualified in their entirety by this
cautionary statement. Further information on potential factors,
risks and uncertainties that could affect operating and financial
results is included in the company's most recent Annual Report on
Form 10-K and subsequent Forms 10-Q, including in each case under
the heading RISK FACTORS, and in the company's other filings with
the SEC. The information in this press release should be read
in conjunction with a review of the company's filings with
the SEC, including the information in the company's most
recent Annual Report on Form 10-K, and subsequent Forms 10-Q, under
the heading "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS".
Invitae Cautionary Statement Regarding Forward-Looking
Statement
Certain statements made in this press release, including, but
not limited to, statements about Invitae's ability to consummate
the planned sale of assets to Labcorp pursuant to the United States
Bankruptcy Court's approval in the chapter 11 case; Invitae's
ability to pay its current obligations when due and satisfy its
continuing obligations, including, but not limited to, employee
benefits and wages, vendors and suppliers of goods and services,
and insurance and tax obligations; and any assumptions underlying
any of the foregoing may be deemed "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995, as amended. Forward-looking statements are subject to
risks and uncertainties that could cause actual results to differ
materially and reported results should not be considered as an
indication of future performance. These risks and uncertainties
include, but are not limited to: (i) risks and uncertainties
regarding Invitae's ability to successfully consummate and complete
a plan under chapter 11 or any strategic or financial alternative
as well as Invitae's ability to implement and realize any
anticipated benefits associated with its sale of assets to Labcorp
and the wind down of operations; (ii) the risk that the transaction
may not be completed in a timely manner or at all; (iii) expected
timing to closing; (iv) the failure to satisfy closing conditions,
including the receipt of certain regulatory approvals; (v) the
occurrence of any event, change or other circumstance that could
give rise to the termination of the transaction agreements; (vi)
market reaction to the announcement, updates on, and planning for
the sale of assets to Labcorp; (vii) Invitae's ability to continue
operating in the ordinary course while the chapter 11 cases are
pending; (viii) potential adverse effects of the chapter 11 cases
on Invitae's business, financial condition, liquidity and results
of operations; (ix) Invitae's ability to obtain timely approval by
the United States Bankruptcy Court with respect to motions filed in
the chapter 11 cases; (x) objections to Invitae's recapitalization
process or other pleadings filed with the Bankruptcy Court that
could protract the chapter 11 cases; (xi) employee attrition and
Invitae's ability to retain senior management and other key
personnel due to the distractions and uncertainties caused by the
chapter 11 cases; (xii) Invitae's ability to improve its liquidity
and long-term capital structure and to address its debt service
obligations through the restructuring; (xiii) Invitae's ability to
comply with the restrictions imposed by the terms and conditions of
the potential financing arrangements; (xiv) Invitae's ability to
effectively implement its strategic initiatives; (xv) Invitae's
liquidity needs to operate its business and execute its strategy,
and related use of cash; (xvi) Invitae's ability to maintain
relationships with suppliers, customers, employees, regulatory
authorities and other third parties as a result of the chapter 11
cases; (xvii) the effects of the restructuring and the chapter 11
cases on Invitae and on the interests of various constituents,
including holders of Invitae's common stock; (xviii) the Bankruptcy
Court's rulings in the chapter 11 cases, including approvals
related to the terms and conditions of any plan under chapter 11
and the outcome of the chapter 11 cases, generally; (xix) the
length of time that Invitae will operate under chapter 11
protection and the continued availability of operating capital
during the pendency of the chapter 11 cases; (xx) risks associated
with third-party motions in the chapter 11 cases, which may
interfere with Invitae's ability to consummate a plan under chapter
11 and the sale of assets to Labcorp; (xxi) increased
administrative and legal costs related to the chapter 11 process;
(xxii) other litigation and inherent risks involved in a bankruptcy
process; (xxiii) Invitae's public securities' potential liquidity
and trading; (xxiv) any impact resulting from the delisting of
Invitae's common stock from the New York Stock Exchange and trading
instead on the OTC Pink Marketplace; (xxv) and the other risks and
uncertainties disclosed in Invitae's annual and quarterly periodic
reports and other documents filed with the SEC. Additionally, there
can be no assurances that the sale of the business will receive
regulatory approval or that any sale will be successfully
consummated. Forward-looking statements speak only as of the date
they are made. Invitae undertakes no duty or obligation to update
or revise these forward-looking statements, whether as a result of
new information, future developments, or otherwise, except as
required by law.
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SOURCE Labcorp