NEW YORK – Investment bank JP Morgan said on Monday that it is downgrading NanoString Technologies from an Overweight to a Neutral rating. The move comes in light of NanoString's recent loss in a patent dispute with 10x Genomics as well as other ongoing litigation in the US and Europe.
"[W]hile we acknowledge that [NanoString's] spatial portfolio is competitive and has been getting traction across the scientific community, we see limited visibility given the pending litigation," JP Morgan analyst Rachel Vatnsdal wrote in a research note. "All in, [the company] is facing litigation across [a] majority of its spatial portfolio both in the US and Europe which adds [an] incremental layer of uncertainty."
Earlier this month, a Delaware jury found that NanoString's GeoMx Digital Spatial Profiler infringed seven patents that 10x exclusively licensed from Prognosys Biosciences. The jury awarded 10x over $31 million in damages and found the infringement to be willful.
The verdict led to NanoString shares tumbling more than 50 percent the following trading day, and the company withdrew its full-year 2023 and fourth-quarter financial guidance.
A week ago, TD Cowen also downgraded shares of NanoString, to Market Perform, citing the legal risk to its spatial genomics product portfolio, a large debt balance, and increased competition.
In September, 10x won a preliminary injunction from the European Unified Patent Court that prevents the sale of NanoString's CosMx instrument across much of the EU.