SF’s Invitae to acquire two prenatal genetic screening firms

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The San Francisco genetic testing firm Invitae Corp. plans to acquire two smaller companies that specialize in prenatal and reproductive screening, the company announced Monday.

The move is Invitae’s first acquisition in the prenatal space, a fast-growing segment of the genetic testing industry.

The two acquired firms — Good Start Genetics of Cambridge, Mass., and Irvine’s CombiMatrix — specialize in testing pregnant women and fetuses for genetic abnormalities that may increase the likelihood of developmental problems in the child. The tests are ordered by obstetricians and reproductive endocrinologists for patients undergoing in vitro fertilization, or IVF. The testing can help determine, for example, whether a genetic disorder may be a contributing factor in recurrent miscarriages.

“We view this as an important step into the reproductive side of genetics,” said Invitae chief executive Sean George. “This is us moving the industry from a test-by-test laboratory type of market to genetic information as a service moving across all stages of life.”

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Several other firms already compete in the prenatal genetic screening market, including South San Francisco’s Counsyl, San Carlos’ Natera and San Diego’s Sequenom, which is owned by the lab diagnostics giant LabCorp.

Prenatal screening has become more widely available in recent years, as the technology to screen for genetic abnormalities continues to advance rapidly. But some experts have cautioned against interpreting the results — which can yield false positives — without seeking the advice of a medical expert or genetic counselor.

Invitae was founded in 2010 and went public in 2015. It offers a wide range of genetic tests, including those that detect genetic variants linked to breast and ovarian cancer. Unlike direct-to-consumer genetic tests like those sold by 23andMe, these tests are ordered by a physician and increasingly are covered by major commercial health insurers.

The proposed acquisition of Good Start is expected to close in August, with the CombiMatrix deal following in the last three months of the year. CombiMatrix, which is publicly traded, reported $12.8 million in revenue for 2016. Good Start is privately held and does not disclose financial figures. Invitae reported $25 million in revenue last year.

The deal will merge the combined genetic information collected by all three companies. Invitae currently partners with biotech firms MyoKardia, BioMarin and Alnylam Pharmaceuticals to share patients’ genetic information, with their consent, to be used in the development of drugs to treat genetic disorders, including patients’ participation in clinical trials.

George said he expects to see more mergers and acquisitions in the genetic testing industry as the sector matures.

“That’s exactly what you see in the 100-plus companies that supply genetic information,” George said. “These two are examples, and there are more that I would expect to see in the coming year — companies that either cease to offer genetic testing services or who get bought by other companies as this industry scales up in volume and sheer number of people. I definitely expect that to continue.”

Invitae stock closed at $9.28 on Monday, down 2.4 percent from Friday. CombiMatrix stock closed at $4.95, down 3.9 percent.

Catherine Ho is a San Francisco Chronicle staff writer. Email: cho@sfchronicle.com Twitter: @Cat_Ho