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NanoString's Q3 Revenues Rise 39 Percent

NEW YORK (GenomeWeb News) – NanoString Technologies reported after the close of the market Tuesday that its third quarter revenues climbed 39 percent as the firm reported growth for both its instruments and consumables.

The Seattle-based company brought in total revenues of $8.4 million for the three months ended Sept. 30, compared to $6 million for the third quarter of 2012. NanoString beat analysts' consensus estimate for revenues of $7.7 million.

Its instrument revenue increased to $3.6 million from $2.2 million year over year, while its consumables revenue was $4.4 million versus $3.6 million. Service revenue was $420,000 for the quarter, up from $284,000.

NanoString said that its life sciences revenue increased 34 percent year over year to $8.1 million, and its diagnostics revenue was around $300,000 in the quarter.

Its net loss was $7.7 million, or $.53 per share, compared to a loss of $4.7 million, or $18.28 per share, for the third quarter of 2012, prior to the firm going public in June. On a non-GAAP basis, its net loss per share for the quarter was $.44 versus $.49 for the comparable quarter a year ago, easily beating the Wall Street estimate of $.67.

Nanostring's R&D costs for the quarter climbed 23 percent to $3.8 million from $3.1 million, and its SG&A expenses jumped 90 percent to $8 million from $4.2 million.

During the quarter, NanoString received US Food and Drug Administration 510(k) clearance for its Prosigna Breast Cancer Prognostic Gene Signature Assay. The test is based on the PAM50 gene signature and analyzes the gene expression profile of cells found in breast cancer tissue to assess a patient's risk of distant recurrence of disease. It is NanoString's first FDA-cleared product and runs on the firm's nCounter Dx Analysis System.

NanoString President and CEO Brad Gray said on a conference call following the release of the financial results that the firm's efforts during the third quarter were focused on three primary objectives: developing the market for Prosigna outside of the US, rapidly expanding the body of clinical data the firm can use to educate physicians and payors about the advantages of Prosigna, and laying the groundwork for the US launch of Prosigna in early 2014.

"We are on track to have Prosigna-enabled nCounter Systems available for placement in high-complexity CLIA labs later this quarter," Gray said. "We are also on track to make Prosigna testing services available in the US in the first quarter of 2014. We expect US Prosigna revenue to ramp throughout 2014, building momentum as we establish reimbursement and gain inclusion in treatment guidelines."

Gray said the firm is actively working on reimbursement coding and coverage "by laying the groundwork for Prosigna's inclusion in the MolDx program run by" the US Centers for Medicare & Medicaid Services. The program is an effort to track utilization of molecular diagnostics and set reimbursement rates based on the value these tests provide to patient care.

"The MolDx program could provide a positive coverage decision by as early as the third quarter of 2014 for states covered by Palmetto and Meridian, which include the largest molecular diagnostic testing sites for the largest US commercial labs," Gray said, noting that the firm would also engage private payors to first establish positive coverage decisions and then collaborate with them on a coding approach.

NanoString also is working on trying to get Prosigna included in key breast cancer treatment guidelines, such as those maintained by the National Comprehensive Cancer Network.

NanoString finished the quarter with $19.3 million in cash and cash equivalents and $32.9 million in short-term investments.

The company said that it expects to report full-year 2013 revenues of between $30 million and $31.5 million with a net loss of between $28 million and $32 million, down from a previous range of $30 million to $35 million.