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NanoString Chairman Sees Dx Opportunity for 'Elegantly Simple' Technology

By Bernadette Toner

NEW YORK (GenomeWeb) – NanoString Technologies' newly appointed executive chairman is looking to drive the company's digital barcoding technology into the clinical diagnostics market by positioning the nCounter platform as an "elegantly simple" alternative to qPCR and other diagnostic methods.

NanoString's nCounter, built upon technology licensed exclusively from the Institute for Systems Biology, uses digital barcoding to enable multiplexed, direct profiling of individual molecules in a single reaction without amplification. The first application for the system is in gene expression, but the company is also working on other tasks like copy number assays and microRNA analysis.

Currently, the platform is available for research use only, but the tool market is only one of the "two wings" of NanoString's business, Bill Young, executive chair of the company, told GenomeWeb Daily News. "You can bet that the clinical diagnostics side will be a big part of what we're trying to do," he said.

Young took the helm of the privately held firm in early February after serving as chairman and CEO of Monogram Biosciences, which was acquired by Laboratory Corporation of America last August.

Prior to Monogram, Young was chief operating officer of Genentech and worked for several years at Eli Lilly. He is also chairman of Biogen Idec's board and a director at Theravance.

"Having seen what goes in diagnostic work, both in pharma and biotech and in my own diagnostic company, most of the technologies we're using are pretty complex, and the trend of the industry in trying to make the whole idea of personalized medicine work is leading to more and more complexity rather than less," Young said.

"What I see in the NanoString technology is a little bit in the opposite direction," he added. "It's elegantly simple, which I think would give it a lot of advantages in trying to move it to the users in clinical diagnostics. It's very amenable to an [in vitro diagnostic] if we choose to go that way, and it's certainly easy to run; it doesn't require any training to do PCR, which a lot of labs are forced to do."

Young said that his first priority is building the management team at NanoString. The company has been without a CEO since Perry Fell resigned from that position last March. Fell remains on the board and CFO Wayne Burns has been acting CEO in the interim.

"We're actively working on a CEO search and that's job one, and we also intend to build out the rest of the management team," he said, adding that he expects to have a decision on the CEO spot "within the next few months."

As far as the type of experience that the company is seeking for the CEO role, "I've got a lot of clinical diagnostics knowledge from my work at Monogram, so that gives us some flexibility in different candidates that we look for, but ideally we want somebody who is facile in both the tools and the clinical diagnostic space, and that's what we're looking for."

Young said that his experience at Monogram made him aware of a number of challenges facing molecular diagnostic firms. One, he said, is the model that many companies, including Monogram, follow, in which they serve as a "centralized lab" that runs all the samples internally in a CLIA setting.

That model "adds a lot of additional complexity to trying to run a diagnostics business because you have to ship everything to a central location, you have more billing and reimbursement issues, and so on," Young said.

Ideally, he noted, the testing platform should be "amenable to a distributed model where the technology would be out in community hospital laboratories … and allow users to get closer to the technology."

Another lesson learned at Monogram was that "the most important driver of a personalized medicine strategy is to have good clinical data," he said. In this aspect, he said he believes that NanoString has an advantage "because we can look at gene expression of hundreds of genes at one time in a multiplex format. You get a lot of data from that approach, and that will allow us, I think, to do much more rapid work in predictive medicine."

Young said that his dealings with pharma indicate that the industry is growing increasingly aware of the value of molecular diagnostics in personalized medicine.

"I think in principle [that] all the companies understand that they need to find ways of making sure that the drugs they develop actually work in patients, and that the days of treating large populations with drugs that only work in a portion are behind them," he said.

"What isn't clear to them is what the right technologies are. So I think they tend to work with a lot of different companies, they have a lot of systems in house, some have even hired diagnostic people to help them ferret through the available technologies, and the problem is that no one has come up with a set of technologies that everyone agrees are the ones that work."

Another consideration, he said, is cost. Drugmakers "want to see technologies that can be deployed rapidly with FDA approval and could potentially cost a lot less to perform than some of the more complicated ones in central lab systems," he said.

"I think that's one of the advantages of NanoString," he added. "Conceptually the technology has the ability to meet those requirements, and I think they'll be more amenable to using NanoString technologies than they have been to some others."

NanoString is not the only genomics tool provider looking to move its platform into molecular diagnostics, but Young said that he sees an advantage in the company's technology because "it's a way of digitizing gene expression without the need for any amplification, and I think that alone is going to be a big advantage over any of the PCR-based technologies."

Last June, NanoString raised $30 million from Clarus Ventures, OVP Venture Partners, and Draper Fisher Jurvetson. The firm had raised $8 million in prior financing rounds since its founding in 2004.

Young said that while there appears to be "a little crack" in the initial public offering market for life science firms, NanoString is "not there yet. I think we want to see more commercial progress and scientific progress and application progress, but I'm hopeful in the general environment that we'll see a lot more companies going public."

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