This story has been updated to include comments from NanoString Technologies, information on its share price, and TD Cowen's downgrading of those shares.
SALT LAKE CITY – 10x Genomics said on Friday after the close of the market that it has won a $31 million jury verdict in a lawsuit against NanoString Technologies.
The result sent shares of NanoString tumbling down more than 50 percent in Monday morning trading on the Nasdaq, to $.62, prompting the company to withdraw its full-year 2023 and fourth quarter financial guidance, pending a review of the verdict's impact on its business. In August, the firm reiterated previous revenue guidance for 2023 of $175 million to $185 million, including spatial biology revenue of $100 million to $105 million.
A Delaware jury found that NanoString's GeoMx Digital Spatial Profiler infringed seven patents held by 10x, exclusively licensed from Prognosys Biosciences. The jury awarded 10x over $31 million in damages and found the infringement to be willful, opening the door for increased damages. The jury also found that the patents were valid, 10x said in a statement.
"We respectfully disagree with the jury's verdict, which we will seek to have overturned or amended in our post-trial motions and then expect to appeal to the US Court of Appeals for the Federal Circuit," NanoString CEO Brad Gray said in a statement. "We remain resolute in our belief that the patents that 10x Genomics has asserted describe a fundamentally different scientific method than that which is used for our GeoMx system. Simply put, we believe the asserted patents are invalid, that we don’t infringe these patents, and that we should be vindicated on appeal."
"In the last six months, three separate courts have found that both NanoString's CosMx and GeoMx products infringe nine separate 10x patents," Eric Whitaker, chief legal officer at 10x Genomics, said in a statement. "At some point, NanoString must drop the charade that it is 'confident' it does not infringe the 10x patents and the patents are invalid."
The verdict — which covers sales of GeoMx products from May 6, 2021, to Oct. 16, 2023 — is the latest legal victory for 10x in its battle with NanoString and other makers of spatial genomics technologies. In September, 10x won a preliminary injunction from the European Unified Patent Court that will prevent the sale of NanoString's CosMx instrument across much of the continent.
10x said that in post-trial proceedings it intends to seek royalties on sales of GeoMx products since Oct. 13, treble damages and attorneys' fees, and a permanent injunction barring the manufacture, use, and sale of GeoMx products in the US.
TD Cowen downgraded shares of NanoString to Market Perform on Monday, citing the legal risk to its spatial genomics product portfolio, a large debt balance, and increased competition.