NanoString Technologies, a leading provider of life science tools for discovery and translational research, announced that steps are being taken to protect its business, customers, employees and its mission to “Map the Universe of Biology.” With support from key creditors, NanoString and certain of its subsidiaries have voluntarily initiated a chapter 11 restructuring proceeding in the United States Bankruptcy Court for the District of Delaware. Coincident with this proceeding, NanoString is exploring strategic alternatives in support of the Company’s mission and for the benefit of its stakeholders, 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,” said Brad Gray, President and CEO of NanoString. “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. We believe chapter 11 protection will provide us with the necessary breathing room to continue to serve our customers while we address our litigation and the related financial challenges.”

Patent Litigation with Competitor Seeking to Control Life Science Research

Patent litigation is common among companies operating in life sciences and is sometimes initiated for the purpose of minimizing or eliminating competition unfairly. NanoString is currently the primary target of an extensive litigation campaign being conducted by 10x Genomics, Inc. (10x). Since May 2021, 10x has brought multiple infringement lawsuits against NanoString in the United States and the European Union, 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. In one case, 10x acquired patents from a defunct company for the apparent purpose of generating litigation with NanoString. In another case, the court granted NanoString’s motion to add counterclaims for antitrust and unfair competition violations, as well as the affirmative defense of “unclean hands” by the plaintiffs.

NanoString is confident in the fidelity of its innovation and product development process, and believes it has strong legal defenses and counterclaims and that the GeoMx DSP and CosMx SMI offer unique propositions to the scientific community. Nonetheless, the Company 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.

Restructuring Process Provides Safe Haven and Cash Infusion

As a result of the combined near-term impact of these litigation proceedings, today, NanoString elected to commence a court-supervised restructuring process. This process importantly allows the Company to:

• Continue to operate its business, support its workforce, and serve its customers, including customers that either own or are considering the purchase of an nCounter®, GeoMx DSP or CosMx SMI system.
• Stay all ongoing patent litigation against the Company worldwide.
• Explore strategic alternatives including a potential sale of all or part of the Company’s business to new owners who will continue the Company’s mission. The Company has received and is currently evaluating multiple preliminary indications of interest as part of this process.
• In connection with this process, NanoString has reached an agreement in principle with certain of our incumbent lenders to provide us with at least $40 million in new capital in the form of Debtor in Possession (DIP) financing. Upon approval of the Bankruptcy Court, this financing facility is expected to provide sufficient liquidity to operate the Company’s business during the pendency of the cases.

NanoString to Continue to Serve Researchers Worldwide

NanoString will continue to serve researchers across its installed base of over 1,500 nCounter, GeoMx DSP, and CosMx SMI platforms. NanoString’s current management team, Board of Directors and employees will continue to operate the business and serve customers following the filing.

As part of the restructuring process, the Company will file customary "First Day" motions to allow it to maintain normal operations. NanoString expects and intends to pay vendors under customary terms for goods and services received on or after the filing date, and to pay its employees in the usual manner and to continue their primary benefits without disruption.

The Company is represented by Willkie Farr & Gallagher LLP as counsel, AlixPartners LLP as restructuring advisor and Perella Weinberg Partners L.P. as restructuring investment banker.