NanoString Technologies has raised $20 million that it will use to advance its breast cancer test, prepare its nCounter Analysis System for clinical use, and develop new research applications for its platform, according to its top official.
CEO Brad Gray told BioArray News this week that the Seattle-based firm will use the proceeds to "fund continued technology and commercial development for our life science tools business," and "advance the development of our first diagnostic product."
Privately held NanoString announced earlier this week that it had closed the Series D of equity financing. New investors include GE, BioMed Ventures, and Henri Termeer, former chairman and CEO of Genzyme. Gray served as vice president of product and business development at Genzyme before joining NanoString in 2010.
NanoString said that all of its previous investors participated in the financing, including Clarus Ventures, Draper Fisher Jurvetson, and OVP Venture Partners.
Founded in 2003, NanoString launched its first-generation nCounter Analysis System three years ago and has since introduced applications for gene expression, microRNA analysis, and copy number variation.
The system is based on technology licensed from the Institute for Systems Biology and enables researchers to measure gene expression in a multiplexed fashion using sets of color-coded molecular barcodes and single-molecule imaging to detect and count hundreds of unique transcripts in a single reaction.
Last month, it introduced the second generation of the nCounter, a smaller, benchtop sized instrument with increased throughput. NanoString has pledged to bring diagnostic tests to market that run on the latest version of the nCounter hardware (BAN 10/18/2011)
In terms of the test menu, NanoString is focusing on its Breast Cancer Intrinsic Subtyping Assay. The assay is based on the PAM50 gene signature that the company exclusively licensed last year from Bioclassifier, a consortium of academic cancer experts. NanoString last year launched a version of the assay for research purposes. The firm originally targeted a 2012 submission date for a diagnostic version of the assay but has declined to provide an estimate for when the test might be available for clinical use (BAN 12/7/2010).
Earlier this year, NanoString announced that it had initiated the first in a series of studies to evaluate the clinical utility of the assay. The initial investigation will rely on approximately 1,000 samples from the TransATAC study to evaluate whether the assay can quantitate the probability of cancer recurrence in individual post-menopausal women with hormone receptor-positive, early stage breast cancer who have been treated with hormonal therapy.
TransATAC is a translational study group that has used tissue and data from the Arimidex, Tamoxifen, Alone or in Combination, or ATAC, trial to study the molecular characteristics of tumors in patients with ESBC.
In a statement this week, NanoString said that it would present the results of the study at the 2011 San Antonio Breast Cancer Symposium on Dec. 8.
Gray said that the new funds will be "used in part to seek regulatory authorizations for in vitro diagnostics use of [the nCounter] hardware." He did not elaborate.
On the research side of its business, NanoString is developing a number of new applications for the nCounter, most of which compete with array-based offerings. Gray noted that the new hardware offers improvements "that enable more ambitious translational research studies," setting the firm up against companies that sell array and RT-PCR based assays for validation of expression signatures.
Gray said that NanoString will "continue to introduce a steady stream of new research use applications for the nCounter as we have throughout 2011," but declined to comment on specific product launch plans. The company in September introduced a new assay that allows users to profile mRNA and microRNA expression at the same time (BAN 8/16/2011).
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NanoString has raised nearly $70 million to date, and most recently closed a $30 million Series C round in 2009. Gray said that the company may have to raise more funds in order to see its products more widely adopted by researchers and clinicians.
"These funds provide the capital required for us to continue to rapidly grow our life science tools business and advance development of our first molecular diagnostics product," said Gray. "However, if we are to fully realize the potential of NanoString’s technology in both research and clinical use, we will need to secure additional growth capital at some point in the future."
Aligning with GE
According to both NanoString and its new investor GE Healthcare, potential exists for future cooperation.
GE made its investment in NanoString through its Healthymagination Fund, an equity investment fund focused on "identifying, partnering with and growing highly promising healthcare technology companies," according to the firm.
In a statement, Pascale Witz, president and CEO of GE Healthcare's medical diagnostics business, called NanoString a "good strategic fit" with the firm, given GE and NanoString's "common focus on oncology." He said that GE believes that NanoString's system "gives researchers the potential to take basic biomarker discoveries into the clinic," and that GE "looks forward to exploring ways to collaborate with the NanoString team."
Gray said that there are "many areas" in which NanoString and GE could collaborate in the future.
"As an investor, GE will look for various ways to work with NanoString that complement the strategic objectives of its Healthymagination initiative," he said.
Gray noted, however, that "GE will not gain rights to NanoString’s technology or products as part of the investment."
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