NanoString Technologies and Subsidiaries File for Bankruptcy Protection Following $31 Million Patent Infringement Case

Seattle-based NanoString Technologies and three of its subsidiaries have filed for Chapter 11 bankruptcy protection, citing a $31 million jury award in a patent infringement lawsuit. The dispute arose after rival company 10x Genomics accused NanoString’s GeoMx® Digital Spatial Profiler (DSP) of infringing seven patents exclusively licensed to 10x by Prognosys Biosciences. The jury decided in favor of 10x, awarding them $31 million in damages. NanoString’s shares dropped 50% following the announcement of the award. In response, NanoString withdrew its full-year 2023 guidance to investors, which had projected revenue between $175 million and $185 million.

NanoString is appealing the decision but has already taken steps to address the financial impact. The company announced a workforce reduction of 9%, affecting approximately 50 employees. Additionally, NanoString faces potential delisting from Nasdaq due to its stock price falling below the minimum requirement of $1 per share for 30 consecutive business days. Despite these challenges, NanoString’s president and CEO, Brad Gray, expressed confidence in the company’s innovation and product development process.

However, NanoString acknowledged that the unfavorable initial rulings and costly litigation with a well-funded competitor have strained its resources. As a result, the company plans to explore strategic alternatives, including a possible sale of all or part of its business. Multiple indications of interest have already been received and are being evaluated.

To support its operations during the bankruptcy proceedings, NanoString has secured an agreement in principle for $40 million in debtor-in-possession (DIP) financing from lenders. This funding is expected to provide sufficient liquidity as the company navigates the bankruptcy process. NanoString emphasized that it will continue to serve its customers and support its workforce throughout the restructuring.

The Chapter 11 filing will also halt all ongoing patent litigation against NanoString worldwide. 10x Genomics has filed several patent infringement lawsuits against NanoString, specifically targeting its GeoMx DSP and CosMx SMI platforms. NanoString has criticized 10x’s litigation campaign, accusing the company of trying to reduce competition in the spatial biology field to the detriment of innovation.

NanoString currently has significant debts of $325.3 million and assets of $274.7 million. Despite this challenging financial situation, the company remains committed to its mission and aims to emerge from bankruptcy stronger and better equipped to continue serving the scientific community.

In conclusion, NanoString Technologies and its subsidiaries have filed for Chapter 11 bankruptcy protection following a substantial jury award in a patent infringement lawsuit. The company is taking proactive steps to protect stakeholders, customers, and employees, including exploring strategic alternatives and securing debtor-in-possession financing. NanoString remains confident in its innovative products and plans to continue serving the scientific community throughout the bankruptcy process.