Cathie Wood called this one of her most underrated stocks. Its CEO explains its growth story
Invitae’s shares rose over 25% this week, a sharp rise after Ark Invest’s Cathie Wood called the company one of their most underrated stocks in a CNBC interview on Monday.
Invitae was the eleventh largest holding in Wood’s flagship fund, the Ark Innovation ETF (ARKK), as of Thursday, giving it a heavier weight than better-known companies like DocuSign and PayPal.
The closely watched investor and company are known for their strategy of investing in “disruptive innovation” and a strong performance over the past year has resulted in billions of new dollars pouring into Ark’s family of funds.
In a CNBC interview on Friday, Invitae’s CEO outlined the genetic testing company’s mission and long-term goals, and provided some insight into why Wood is optimistic about its prospects.
“Genetic information is fundamental to improving people’s health outcomes and reducing costs. We tirelessly pursue the idea of incorporating this information into general medical care and daily use,” said Sean George on Closing Bell. He co-founded the San Francisco-based company in 2010, which went public in 2015.
Invitae achieved total annual sales of USD 279.6 million in 2020, compared to USD 216.8 million in the previous year. Net loss increased $ 608.9 million last year compared to $ 242 million in 2019.
While genetic information can be an effective tool in combating a variety of diseases, George says high costs have historically limited availability, and therefore potential impact. However, the latest innovations in gene sequencing would have laid the foundation for better accessibility. He compared it to semiconductor improvements that helped boost the computer and networking industries in the 1970s and early 1980s.
“That has enabled … application providers like us to change what has historically been considered a rationed good in healthcare – genetic information, a kind of niche, test-by-test, sample-by-sample structure of the laboratory industry – to something that looks a lot more like an information industry, “said George.
George, who holds a Ph.D. In molecular genetics, Invitae hopes to take its tests to the point that patients and doctors can proactively use them in large numbers. That way, even if the cost of each test is cheaper, Invitae can generate enough resources to be successful as a company, he said.
“The enormous importance and central importance of genetic information in health care will – I am sure in the next five to ten years – be in the foreground in order to receive the right therapy sooner for people who can benefit from it.” , identify people at risk and put in place surveillance and prevention modalities to safely delay, if not prevent, disease outbreaks and, in general, provide a basic understanding of the risk that exists in families, “he added.
Ark Invest has positions in a number of companies working on medical innovation beyond Invitae. Wood’s company has dedicated an ETF, the Genomic Revolution ETF (ARKG). As of Thursday, these will include Teladoc, Regeneron Pharmaceuticals and CRISPR Therapeutics. Invitae is also represented in this fund, currently the 16th largest participation.
Invitae’s shares closed Friday’s session down 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 has grown by almost 260% in the past 12 months.