Letter from Our CEO,
Dear Customers, Scientists, and Partners
First, I want to thank you for your enthusiasm for our company and products throughout 2023. Together, we have realized phenomenal scientific achievements and secured NanoString’s technology as a critically important tool in advancing the world of health.
From our beginning, NanoString’s focus has been to invest our resources in pioneering the industry’s most sophisticated and differentiated spatial biology tools while partnering with researchers to enable them to deploy these tools to forge their next breakthrough. We do this work for the benefit of scientific inquiry and promoting human health.
Unfortunately, not all life sciences companies approach the mission of serving scientists with the same values. Our competitor 10x Genomics, a much larger company than NanoString, has chosen to deploy significant resources towards an unfair litigation strategy in what we believe is an effort to control life sciences research tools.
10x has filed numerous patent infringement lawsuits against us and other smaller competitors. We view these cases as driven by an anticompetitive and misguided business strategy that is detrimental to science and the research community. For example, 10x Genomics 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.
On November 17, a jury in the Delaware District Court issued a verdict against NanoString in a case involving these patents and our GeoMx® Digital Spatial Profiler (DSP). In a complicated case, the jury found NanoString liable for patent infringement and awarded approximately $31.5 million in damages.
We respectfully disagree with the verdict, and we remain resolute in our belief that the patents that 10x Genomics has asserted describe a fundamentally different scientific method than that which is used for our GeoMx DSP system. We firmly believe the asserted patents are invalid and that we do not infringe these patents. When the time comes, we will appeal.
NanoString’s focus has always been to operate with integrity, protecting our innovations and your access to our products. While we are confident in our legal defenses and counterclaims, and have strong grounds for our appeals, the cost of the litigation and 10x’s current demands for extraordinary damage awards have placed a significant strain on the company’s financial resources.
On February 4, 2024, NanoString voluntarily initiated chapter 11 restructuring, deploying a proven mechanism to address financial stress and bolster our capabilities to serve customers and provide our products to the scientific community. Chapter 11 restructuring is a protective action that offers us significant benefits to shield the company from threats created by our ongoing IP litigation and related debts. By entering restructuring, we protect our mission, employees, and customer access to our products.
NanoString has received a commitment for $40 million in new capital, and this financing facility is expected to provide sufficient liquidity to support the company throughout the process. During this phase, our business will operate as it has in the past. Our team will continue to serve you, our customers, and support the scientific community with the same great products and tools. Our commitment to brand quality and customer satisfaction will not change.
We believe that NanoString will emerge from restructuring a stronger company. We are also exploring several strategic options that support the continuation of our mission for the benefit of our customers, employees, and other stakeholders, including the potential sale of the company or product lines to partners who share our values of helping the scientific community advance their science.
You may receive certain communications and legal notices throughout this process. If you have additional questions, do not hesitate to reach out to your normal business contact. Court documents and additional information can be found at the website administered by our claims agent, Kroll Restructuring Administration LLC, at https://cases.ra.kroll.com/NanoString, or by calling the Company’s restructuring hotline, toll-free in the U.S., at (844) 596-1372.
Throughout this process, we will remain steadfast in our mission to invest our resources in innovation as opposed to litigation. Thank you for the many messages, emails and calls of support. Your continued enthusiasm for our team, technologies, and products is a powerful way to stand up for us and for having a choice when it comes to important scientific tools.
President and CEO, NanoString Technologies, Inc.