Dive Brief:
- Nanostring Technologies, a maker of life science research tools, said it has filed for Chapter 11 bankruptcy protection and is exploring strategic alternatives in connection with the proceedings, including a potential sale of the company or product lines.
- CEO Brad Gray, in a statement Sunday, said large damages awarded by a jury in November in a patent lawsuit brought by competitor 10x Genomics forced Nanostring to take steps to protect its business.
- Nanostring said it has received “multiple preliminary indications” of interest from potential acquirers and is currently evaluating them.
Dive Insight:
Nanostring, which has been in business for two decades, has an installed base of more than 1,500 systems used in biological research. Its primary platforms are the GeoMx digital spatial profiler and CosMx spatial molecular imager.
The company said its management and employees will continue to operate the business and serve customers following the Sunday filing in U.S Bankruptcy Court for the District of Delaware.
“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,” Gray said. “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.”
TD Cowen analyst Dan Brennan, in a note to clients, said research conducted by his team indicates there is “ample customer interest” in Nanostring’s GeoMx and CosMx product lines.
“Thus, we are not surprised there is [third] party interest,” Brennan wrote.
Nanostring said it has reached an agreement with some of its existing creditors to provide at least $40 million in new capital through debtor-in-possession financing to support its restructuring. The financing, which must be approved by the bankruptcy court, is expected to provide enough liquidity to operate the business during the proceedings.
The company said 10x Genomics has brought multiple infringement lawsuits against it in the U.S. and European Union since May 2021 over its GeoMx and CosMx technologies, and unfavorable initial rulings have affected its 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 reported $48.1 million in revenue in the third quarter, ending the period with $97 million in cash and cash equivalents, compared with $349 million in the fourth quarter of 2021.