Shares of Invitae rose more than 25 percent this week, a sharp move that came after Arkie’s Cathie Wood called the company one of its most underrated shares in a CNBC interview on Monday.
Guests on Thursday was the 11th largest stake in Wood’s flagship fund, Ark Innovation ETF (ARKK), giving it a higher share than well-known companies such as DocuSign and PayPal.
The closely watched investor and her firm are known for their strategy of investing around “disruptive innovation,” and a strong performance last year caused billions of new dollars to flow into Ark’s fund family.
In a CNBC interview on Friday, the CEO of Invitae explained the company’s genetic testing mission and long-term goals, providing information on why Wood is optimistic about his prospects.
“Genetic information is critical to improving people’s health care outcomes and lowering costs, and we’re constantly looking at getting that information into regular, day-to-day health care,” Sean George told Closing Bell. He co-founded the San Francisco-based company in 2010 and went public in 2015.
Guests reported year-round revenue of $ 279.6 million in 2020, up from $ 216.8 million the previous year. Its net loss increased last year by $ 608.9 million, compared to $ 242 million in 2019.
While genetic information can be a powerful tool in combating various diseases, George said the 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 groundwork for greater accessibility. He compared it to semiconductor improvements, helping launch the computer and network industry in the 1970s and early 1980s.
“This has allowed … application providers like us … to change what has been fundamental in the past to a good health care rationale – genetic information, a kind of niche, test by test, sample by sample, the industry of laboratory – to something that looks a lot more like an information industry, “said George.
George, who has a doctorate in molecular genetics, said Invitae hopes to bring 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 money to thrive as a company, he said.
“The massive and central importance of genetic information in health care is about to – I’m sure in the next five to 10 years – is about to emerge in the spotlight, as an ability to get the right therapy earlier for people who can benefit, identify people at risk and implement monitoring and prevention measures to definitely delay, if not prevent, the disease and, in general, to provide a basic understanding of the risk that takes place in families “, he added.
Ark Invest holds positions in a number of companies working on medical innovation beyond Invitae. Wood has an ETF dedicated to it, called the Genomic Revolution ETF (ARKG). As of Thursday, it includes Teladoc, Regeneron Pharmaceuticals and CRISPR Therapeutics. Guests are also in this fund, currently as the 16th largest holding company.
The shares of Invitae closed the session on Friday with 0.5%, at 42.70 USD. Despite the big gains of the stock this week, it remains below its all-time high of $ 61.59 on December 14th. It has increased by almost 260% in the last 12 months.