Initiates Voluntary Chapter 11 Restructuring
Proceedings with Additional $40 Million in Financing Secured from
Existing Noteholders to Facilitate Process
Continuing to Serve Life Sciences
Researchers Worldwide
NanoString Technologies, Inc. (NASDAQ: NSTG) (“NanoString” or
“the Company”), a leading provider of life science tools for
discovery and translational research, today 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.
Additional Information About the Court-Supervised
Restructuring Process
Additional information regarding the Company’s court-supervised
process, including court filings and other information, is
available on a separate website administrated by the Company’s
claims agent, Kroll, at https://cases.ra.kroll.com/NanoString.
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.
About NanoString
NanoString Technologies, a leader in spatial biology, offers an
ecosystem of innovative discovery and translational research
solutions, empowering our customers to map the universe of biology.
The GeoMx® Digital Spatial Profiler is a flexible and consistent
solution combining the power of whole tissue imaging with gene
expression and protein data for spatial whole transcriptomics and
proteomics. The CosMx™ Spatial Molecular Imager is a single-cell
imaging platform powered by spatial multiomics enabling researchers
to map single cells in their native environments to extract deep
biological insights and novel discoveries from one experiment. The
AtoMx™ Spatial Informatics Platform is a cloud-based informatics
solution with advanced analytics and global collaboration
capabilities, enabling powerful spatial biology insights anytime,
anywhere. At the foundation of our research tools is our nCounter®
Analysis System, which offers a secure way to easily profile the
expression of hundreds of genes, proteins, miRNAs, or copy number
variations, simultaneously with high sensitivity and precision. For
more information, please visit www.nanostring.com.
Forward-Looking Statements
This press release includes statements that are, or may be
deemed, “forward-looking statements.” In some cases, these
forward-looking statements can be identified by the use of
forward-looking terminology, including the terms “believes,”
“estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,”
“could,” “might,” “will,” “should,” “approximately” or, in each
case, their negative or other variations thereon or comparable
terminology, although not all forward-looking statements contain
these words. These forward-looking statements reflect the current
beliefs and expectations of management made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. We caution you that forward-looking statements are not
guarantees of future performance and that our actual results of
operations, financial condition and liquidity, and the development
of the industry in which we operate may differ materially from the
forward-looking statements contained herein. Any forward-looking
statements that we make in this press release speak only as of the
date of such statement, and we undertake no obligation to update
such statements to reflect events or circumstances after the date
of this press release or to reflect the occurrence of unanticipated
events. NanoString’s forward-looking statements in this press
release include, but are not limited to, statements about
NanoString’s plans to sell its assets pursuant to chapter 11 of the
U.S. Bankruptcy Code; NanoString’s intention to continue operations
during the chapter 11 case; NanoString’s belief that the sale
process will be in the best interest of NanoString and its
stakeholders; NanoString’s beliefs about the outcome of litigation;
and other statements regarding NanoString’s strategy and future
operations, performance, and prospects, among others. These
forward-looking statements are based on current expectations and
beliefs concerning future developments and their potential effects.
There can be no assurance that future developments affecting
NanoString will be those anticipated. These forward-looking
statements involve a number of risks, uncertainties (some of which
are beyond NanoString’s control) or other assumptions that may
cause actual results or performance to be materially different from
those expressed or implied by these forward-looking statements.
These risks and uncertainties include, but are not limited to, the
risks associated with the potential adverse impact of the chapter
11 filings on NanoString’s liquidity and results of operations;
changes in NanoString’s ability to meet its financial obligations
during the chapter 11 process and to maintain contracts that are
critical to its operations; the outcome and timing of the chapter
11 process and any potential asset sale; the effect of the chapter
11 filings and any potential asset sale on NanoString’s
relationships with vendors, regulatory authorities, employees and
other third parties; possible proceedings that may be brought by
third parties in connection with the chapter 11 process or the
potential asset sale; uncertainty regarding obtaining Bankruptcy
Court approval of a sale of NanoString’s assets or other conditions
to the potential asset sale; and the timing or amount of any
distributions, if any, to NanoString’s stakeholders.
NanoString, NanoString Technologies, the NanoString logo, CosMx,
GeoMx, AtoMx and nCounter are trademarks or registered trademarks
of NanoString Technologies, Inc. in various jurisdictions.
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version on businesswire.com: https://www.businesswire.com/news/home/20240204252123/en/
Investor Relations and Communications ir@nanostring.com (888)
358-6266
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