ArcherDX CEO: Scale the deciding factor in choosing $1.4B acquisition over going public

BOULDER — ArcherDX Inc. CEO Jason Myers said his company would have had a “white-hot” initial public offering, but opted to take a $1.4 billion takeover offer from Invitae Corp. (NYSE: NVTA) because of the potential to spread its oncology genomic testing platform to a wider base.

In an interview with BizWest Tuesday morning, Myers confirmed that the San Francisco-based Invitae offered to acquire the company shortly after ArcherDX filed paperwork this month to raise up to $100 million in an IPO. However, he said the two companies were in merger talks in the months leading up to the IPO filing.

While he described going public and the acquisition offer as both favorable outcomes, Myers said the decision came down to patient access. Invitae’s size and scale guarantees that patients across the country can get their genomic tests completed even if they don’t have a local lab to process the sample.

“The thought is you click those two together and you get one plus one equals four or five,” he said. “And that’s not just in business terms; that’s for patients to have the opportunity to get information in a different way.”

ArcherDX has raised more than $150 million in venture capital in previous years and made about $55 million in revenue last year from building companion tests for cancer treatments made by larger pharmaceutical firms. 

However, its value proposition was in Stratafide and PCM, two broad cancer-testing platforms thought to be the ticket for ArcherDX to take a cut of the $45 billion oncology testing market. Myers said 27 million bonus shares of Invitae stock are tied to development milestones for those two tests.

While the IPO market slowed considerably in recent months due to the wider economic troubles brought on by the coronavirus, health-care stock debuts outperformed because of the relative scarcity of cutting-edge medical treatments.

“I think the IPO would have been white-hot for us, and I just think ultimately, it really came down to what we had, two excellent choices in front of it,” he said. “…We made the choice based on people and what we should do for employees and patients. That’s really what the tiebreaker was, because it was a hard decision.”

Myers will stay on as head of the ArcherDX division once the deal closes this year. He said Invitae has no major plans to alter headcounts or operations in ArcherDX’s Boulder offices, especially because the city is already a draw for biotechnology employees.

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