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10x Genomics Wins Permanent Injunction to Prevent NanoString CosMx Sales in Germany

NEW YORK – 10x Genomics said on Wednesday afternoon that a German court has awarded it a permanent injunction that will force NanoString Technologies and its German subsidiary to cease selling its CosMx Spatial Molecular Imager instrument and RNA detection reagents in Germany.

The ruling, from the Munich Regional Court, was based on a finding that CosMx products infringe 10x's European Patent No. 2794928B1, covering in situ detection of analytes. According to 10x, which filed the suit in March of last year, the Munich court referenced an earlier preliminary opinion by the German Federal Patent Court in its decision, which found the asserted claims of the patent to be valid.

The news sent shares of NanoString down 17 percent to $7.10 in Thursday morning trading on the Nasdaq.

10x has also sued NanoString in the US, alleging patent infringement by the CosMx and GeoMx Digital Spatial Profiler products, and has asked for an injunction to prevent CosMx sales. 10x offers a competing high-resolution spatial analysis platform called Xenium. The firm plans to seek injunctions in other jurisdictions where CosMx is sold, 10x Chief Legal Officer Eric Whitaker said in a statement.

NanoString CEO Brad Gray said in a statement that he disagreed with the decision, adding that the firm "will continue to pursue all legal avenues to vigorously defend against 10x's claims," including an appeal, which could take more than a year.

NanoString added that the decision does not apply to the use of CosMx to detect proteins.

The European patent at suit and several of the US patents 10x has been asserting were originally awarded to George Church and other researchers in his lab at Harvard University. Harvard exclusively licensed that IP to ReadCoor, a Church lab spinout, which 10x acquired in 2020 for approximately $350 million in cash and stock.

In a note to investors, Canaccord Genuity Analyst Kyle Mikson said the near-term implications would be "minimal," though the long-term implications aren't clear. "NanoString noted to us that Germany does not represent material CosMx revenue," he wrote. "However, the legal ruling may influence other CosMx customers, given the risk of potential injunctions elsewhere."

NanoString is also challenging the European patents' validity through a nullity action in the German Federal Patent Court, with a decision expected following a hearing scheduled for May 2024.

10x added that it is offering an unspecified discount on Xenium to NanoString customers who have ordered a CosMx prior to May 17.