NanoString Technologies, along with some of its subsidiaries, initiated voluntary restructuring proceedings, filing for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware.
In a statement, NanoString said that, along with the filing, it 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 bankruptcy protection process will also allow NanoString to stay all ongoing patent litigation against it worldwide.
In November 2023, a Delaware jury awarded $31 million in damages to 10x Genomics in a patent infringement suit against NanoString; the suit alleged that NanoString's GeoMx Digital Spatial Profiler infringed seven patents held by 10x Genomics. NanoString shares fell nearly 50% following that verdict, prompting the company to withdraw its full-year 2023 and fourth-quarter financial guidance pending a review of the litigation's effect on its business. The lawsuit was one of several brought against NanoString by 10x Genomics.
In an early January filing with the U.S. Securities and Exchange Commission, NanoString announced plans to cut 50 jobs -- approximately 9% of its global workforce -- by the end of March. Moreover, the company received a warning from Nasdaq in early January that its stock price had closed below the $1 per share minimum bid price requirement for continued inclusion in Nasdaq for 30 consecutive business days. The company must maintain the minimum bid price requirement for at least 10 consecutive business days in a 180-day period (ending July 2) to regain compliance with Nasdaq’s requirements or it risks being delisted.
NanoString added that it has reached an agreement with some of its lenders to provide it with at least $40 million in new capital in the form of debtor-in-possession financing, pending approval of the bankruptcy court. These funds are expected to provide sufficient liquidity to maintain operations during the proceedings.
“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,” Brad Gray, president and CEO of NanoString, said in the company’s statement.
“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,” Gray said.