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NanoString Technologies Files to Go Public

NEW YORK (GenomeWeb News) – Translational life science tools and molecular diagnostics company NanoString Technologies today filed for an initial public offering.

In its Form S-1 filed with the US Securities and Exchange Commission, the Seattle-based company said it anticipates a proposed maximum aggregate offering price of about $86.3 million, but did not provide a price range for its shares or the amount of shares to be sold.

JP Morgan and Morgan Stanley will be joint book-running managers for the offering, and Leerink Swann and R.W. Baird will act as co-managers.

NanoString plans to list on the Nasdaq under ticker symbol "NSTG".

NanoString was incorporated in 2003 and describes itself as a developer of products "that unlock scientifically valuable and clinically actionable genomic information from minute amounts of tissue." Its flagship instrument is the nCounter Analysis System that directly profiles hundreds of molecules simultaneously, using barcoding technology. nCounter digitally quantifies the activity of up to 800 genes at once in a single experiment, it added in its Form S-1.

Additionally, the company operates in the molecular diagnostics space and offers the Prosigna Breast Cancer Assay, a test comprised of 50 genes known as the PAM50 gene signature. In 2010, NanoString secured an exclusive worldwide license to PAM50.

Prosigna provides physicians with a subtype classification "based on the fundamental biology of the patient's tumor" and a prognostic score that predicts the probability of cancer recurrence during a 10-year period, NanoString said. In September, the test received CE marking, and in February 2013, it was launched in Europe and Israel.

The company filed a 510(k) application with the US Food and Drug Administration in December 2012 for clearance of a version of Prosigna for assessing a patient's risk of recurrence for breast cancer.

Last month, the company said it acquired the option to license a 186-gene signature from the Broad Institute that potentially could determine the prognosis of patients diagnosed with hepatocellular carcinoma.

For the first quarter of 2013 ended March 31, NanoString posted $5.7 million in revenues, up 27 percent from $4.5 million in the first quarter of 2012. Its net loss was $7.3 million, or $0.56 per share, compared to a net loss of $3.6 million, or $0.52 per share, a year ago.

In 2012, the company brought in $23.0 million in revenues, up 29 percent from $17.8 million in 2011, while its net loss rose to $17.7 million, or $2.22 per share, compared to a net loss of $10.9 million, or $1.56 per share.

It had $11.8 million in cash and cash equivalents as of March 31, as well as working capital of $12.3 million.

NanoString said that it anticipates using about $25 million of net proceeds from its initial offering to commercialize Prosigna after receiving regulatory authorization, including the creation of a dedicated oncology sales force. About $15 million will be used to expand the clinical utility of the test and to develop other diagnostic products.

Another $15 million will go toward expanding its life sciences commercial operation in order to support and grow the installed base of nCounter systems among life science research customers, it said. About $10 million will be used to develop new life sciences applications, chemistry, and instrumentation for the nCounter platform. Other net proceeds will be used for working capital and general corporate purposes, and for possible M&A activity and licensing activity.

The management team at NanoString includes President and CEO Bradley Gray; CFO James Johnson; CMO Wayne Cowens; SVP of R&D Joseph Beechem; and VP of Manufacturing Mary Tedd Allen. William Young is chairman of the board.

NanoString's plans to go public come amidst a rough time for life science tools and molecular diagnostics firms in the IPO market. Since the start of 2012, only two firms have completed their IPOs, Atossa Genetics and Cancer Genetics.