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NanoString Makes Moves to Push Into Molecular Diagnostics Market

By Tony Fong

NEW YORK (GenomeWeb News) – Fresh off its announcement that it had licensed a panel of genes for breast cancer detection, NanoString Technologies is seeking to expand its profile by moving into the molecular diagnostics space.

In a recent interview on the sidelines of the JP Morgan Healthcare Conference in San Francisco, Brad Gray, president and CEO of NanoString, said that with its life science tools business on firm footing, the company is now embarking on efforts to build its diagnostics business.

Its first test will be based on the PAM50 gene signature for breast cancer, which it licensed from Bioclassifier in December.

According to Gray, about 60 percent of NanoString's research customers already do cancer biomarker validation and gene signature validation on NanoString's flagship platform, the nCounter system, launched in 2008. The platform is based on technology licensed from the Institute for Systems Biology.

"So we are naturally building a diagnostic strategy around oncology gene signatures in the clinic," he said. "The overall vision is to become the platform of choice for FDA approved in vitro diagnostic tests that are based on multiplex gene expression profiling in cancer."

The announcement of the licensing agreement with Bioclassifier "marks really the debut of NanoString as a serious diagnostics developer," Gray added.

The Seattle-based, privately held company first got serious about molecular diagnostics in 2009, he said, when Clarus Ventures invested in NanoString's Series C financing round, which raised $30 million. It was Clarus' first investment in the company.

Clarus, Gray said, brought a "very clear" vision about the potential of the nCounter technology both in life science tools and in clinical diagnostics. "And [Clarus] really began to steer the company toward looking beyond just the life science tools market toward the clinical diagnostics market," he told GenomeWeb Daily News.

The company began laying the groundwork to enter the diagnostics space last year by first recruiting William Young as executive chairman in February. Young had been chairman and CEO of Monogram Biosciences before it was acquired by Laboratory Corporation of America in August 2009.

Almost immediately upon landing at NanoString, Young signaled the company's interest in the clinical diagnostics space.

Then in May last year, the nCounter platform received ISO 13485:2003 certification, which Gray said was the first step in preparing it for FDA clearance. The final piece to NanoString's diagnostic ambitions was the hiring of Gray in June from Genzyme Genetics, where he was vice president of product and business development and directed the development of molecular diagnostics and partnering activities. (Genzyme Genetics was recently acquired by LabCorp for $925 million.)

"The board recruited me with the intent of continuing to build out a diagnostic vision and capability for the company," he said.

Along with Gray, Nalini Murdter also was hired in June as NanoString's chief business officer. She had been global product marketing manager in life sciences and chemical analysis at Agilent Technologies. And in October, the company added Barney Saunders as chief commercial officer. He held the same position at IntegenX, and also previously led the gene expression business at Agilent Technologies.

NanoString has no thoughts of leaving the life science tools space, Gray said, but added, "I think we'd be foolish not to simultaneously build a clinical diagnostics business in partnership with our customers."

Initial Focus on Breast Cancer

The PAM50 gene signature test will be NanoString's first diagnostic test. Comprised of 50 genes, PAM50 was created and validated by Bioclassifier, a partnership of four breast cancer experts from Washington University, the British Columbia Cancer Agency, the University of North Carolina at Chapel Hill, and the University of Utah.

The technology was licensed to ARUP Laboratories to be offered as a laboratory-developed qPCR-based assay. GWDN sister publication BioArray News reported that Bioclassifier chose to license product rights to the technology to NanoString after it discovered that the PCR approach was not robust enough to support widespread use of the assay.

According to NanoString, the subtype classification and prognostic score generated by the PAM50 gene signature provides information about the fundamental biology of breast cancer that currently available diagnostic tests cannot.

NanoString's goal is to take the gene signature, clinically validate it, and then submit it for FDA approval as an in vitro diagnostic device. The company is in the assay development phase for the test and will begin to clinically validate it by the middle of the year, Gray said. The firm hopes that such a test will be cleared by the agency sometime in 2012.

Gray added that over the past decade, numerous studies have demonstrated that intrinsic subtyping, which can be achieved with PAM50, is useful not only for prognostic applications but also for predicting response to specific classes of chemotherapies.

The main subtypes are ER-negative tumors, basal-like and human epidermal growth factor receptor-2, and two subtypes of estrogen receptor-positive tumors, luminal A and luminal B.

"So, the intrinsic subtypes have been correlated with a number of important outcomes that can inform major therapeutic choices, not just for women who are ER-positive, node negative the way some of the existing assays in the market today do," he said, "but for women who have later stages of breast cancer who are node-positive and who are ER-negative."

NanoString is developing its test so that it can guide clinicians in treating all breast cancer patients, and not just a subset, he added.

The company also is "very interested" in exploring opportunities with pharma firms to develop companion diagnostics based on the Bioclassifier technology for therapies in development.

In addition to developing the PAM50 gene assay, NanoString is in discussions with researchers who are using the nCounter platform to validate gene signatures for cancers other than breast cancer, and diagnostic companies who may be interested in using the nCounter platform after being unable to develop a multiplex gene signature expression assay on other technology platforms.

"We have a number of business development discussions ongoing about accessing other content to develop as potentially our second and third clinical testing products," Gray said, adding that many of NanoString's research customers are bringing their content to the company "in the hopes of commercializing it as diagnostics with us."

Work is also being done by the company to adapt the nCounter system to comply with FDA requirements for design control and quality system control, he said.

Some of NanoString's customers are validating gene expressions that may be clinically useful for indications in immunology, inflammation, and infectious disease, and the company may pursue those indications in the future, said Gray. However, NanoString is focusing its current efforts on oncology because the nCounter is especially well-suited for cancer research, and some of the most innovative gene expression research is being done in the cancer arena, he said.

Additionally, the chemistry used for the platform is particularly compatible with formalin-fixed, paraffin-embedded tissue, which is the most common kind of solid tumor tissue sample used for clinical research.

NanoString is now preparing a financing round and has received a "very positive" reception from investors, Gray said. The funds will be used to take its first diagnostic through FDA approval and to bring NanoString to profitability.

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