NanoString files bankruptcy in wake of 10x Genomics litigation

By Sarah Lizee

Olympia, Wash., Feb. 5 – NanoString Technologies, Inc. filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware, according to a Sunday press release.

NanoString said it is exploring strategic alternatives, including the potential sale of the company or product lines.

“The unexpected outcome of the November GeoMx patent litigation trial in Delaware and the unusually large magnitude of the damages awarded by the jury have forced us to take proactive steps to protect our stakeholders, customers and employees,” Brad Gray, president and chief executive officer of NanoString, said in the release.

“NanoString has powerful product platforms, strong relationships with our customers throughout the scientific community, an enviable workforce, and conviction in the integrity of our innovation process.

NanoString is the primary target of an extensive litigation campaign being conducted by 10x Genomics, Inc., the company said.

Since May 2021, 10x has brought multiple infringement lawsuits against NanoString in the United States and Europe, with respect to NanoString’s GeoMx Digital Spatial Profiler (DSP) and CosMx Spatial Molecular Imager (SMI) product lines.

“10x is engaging in its litigation campaign with the apparent goal of shrinking the competitive landscape for different spatial biology platforms to the detriment of the public good,” NanoString said.

The company said it has faced unfavorable initial rulings that have impacted its business trajectory and financial position.

“While the company believes that it has strong grounds for appeals, these initial litigation outcomes, including the cost burdens associated with continued engagement in extensive litigation with a large well-funded competitor, have siphoned resources from innovation and customer support activities and placed a significant strain on the company’s business and financial resources,” NanoString said.

The company said it has received and is evaluating multiple preliminary indications of interest as part of its restructuring process.

NanoString has reached an agreement in principle with some of its existing lenders to provide at least $40 million in debtor-in-possessing financing.

NanoString said its current management team, board of directors and employees will continue to operate the business following the filing.

The company said it would file customary first-day motions to allow it to maintain normal operations.

In its petition, the company listed $274.71 million in assets and $325.28 million in debt.

Its largest unsecured creditor is 10x, based in Pleasanton, Calif., with its $31 million disputed patent infringement claim.

The next largest unsecured claims are those of SalesForce.com Inc., based in San Fransisco, with a $1.47 million software claim, Jason M. Wood, based in Tiburon, Calif., with a $1.44 million bank service charges claim, and Weil, Gotshal & Manges, LLP, based in New York, with a $1.36 million litigation claim.

NanoString is represented by Willkie Farr & Gallagher LLP as counsel, AlixPartners LLP as restructuring adviser and Perella Weinberg Partners LP as restructuring investment banker.

NanoString Technologies is a Seattle-based biotech company specializing in cancer diagnostic tools.

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