INVITAE, a genetic-testing company with backers including SoftBank Group and Cathie Wood’s Ark Investment Management, has filed for bankruptcy as the DNA testing industry struggles to regain investor interest following a pandemic-era boom.

San Francisco-based Invitae filed for Chapter 11 protection in New Jersey and listed assets of US$500 million to US$1 billion and liabilities of US$1 billion to US$10 billion on its bankruptcy petition.

The bankruptcy filing caps a relatively swift decline for Invitae, which saw its market capitalisation soar to more than US$10 billion during the Covid-19 pandemic. Despite the renewed investor interest, the company kept losing money and struggled to run a sustainable business.

The company plans to use its own cash to fund the court process, according to a statement. Before filing, it reached a deal with lenders to sell itself in bankruptcy. It has already received interest from several parties, with more than a dozen suitors signing confidentiality agreements, according to court papers.

“We have been working diligently over the past eighteen months to improve our cash position by realigning our portfolio and focusing on our most impactful business lines,” Ken Knight, the firm’s president and chief executive officer, said.

Invitae, as at Sep 30, had roughly US$1.4 billion outstanding on two sets of senior secured bonds maturing in 2024 and 2028, respectively, according to the company’s most recent quarterly report. The debt includes about US$1.15 billion in convertible bonds issued to investors led by a subsidiary of SoftBank.

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The firm expanded rapidly in recent years. Starting in 2019, it made more than a dozen acquisitions which increased the company’s debt load by around US$1.5 billion, according to court papers.

Since going public, Invitae has laid off employees, cut costs and sold some of its assets. The company formed a special board committee in 2023 to explore options for raising cash and address its debt, according to filings with the US Securities and Exchange Commission.

Invitae said in a November securities fling that the company had laid off about 1,000 employees over the past couple of years. The company also sold its pregnancy screening related business assets for as much US$52 million. BLOOMBERG