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NanoString Looks to NGS Readout to Fuel Next Wave of Digital Spatial Profiling Growth

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NEW YORK – Having unloaded its clinical diagnostics business in a $60 million licensing deal with Veracyte last December,  Nanostring has refocused on its core business as a research platform provider, and expects steady sales of its nCounter gene expression profiling instruments and mounting adoption of its newer spatial genomics platform this year.

On a call discussing the firm's fourth quarter and full-year earnings this week, NanoString President and CEO Brad Gray said that handing off its Prosigna breast cancer diagnostic — along with rights to commercialize certain other future diagnostic assays — to Veracyte, has been key ’for its goal to reach break-even in its financials.

According to Gray, growing the customer base for its GeoMx Digital Spatial Profiler is now NanoString's top priority for 2020. The firm expects order volume for the platform to increase by about 50 percent over 2019, equating to about 90 new orders, Gray said. The company's nCounter business, meanwhile, will likely remain at the steady state it has been for the past year or so, "without the distraction and the expense of Prosigna," Gray added.

NanoString launched GeoMx last spring, and Gray said the firm's strategy in 2020 is two-fold, the first component of which is beefing up what has so far been a customer base of largely translational researchers.

"Translational research has been the core market for NanoString for a decade, as reflected by our large installed base of Ncounter systems within biopharma companies and academic medical centers," Gray said, adding that "almost every GeoMx system sold today has gone into translational research."

With GeoMx, the company has the potential to target existing nCounter users who might want to expand to spatial profiling, and new customers interested in spatial genomics who might either be persuaded to bring in an nCounter or who'd rather read out the digital spatial profiling instrument on a sequencer they already have on hand.

Gray said that continued robust interest in NanoString's technology access program (TAP) is part of what is fueling its confidence that it will be able to continue to drive GeoMx adoption over the next year.

"We saw a steady sequential growth in TAP projects throughout 2019 and booked about 50 new projects in the fourth quarter. To date we've completed more than 200 TAP projects for more than 125 unique customers," he said.

He also said that there continues to be a rapid funnel of DSP research into the scientific literature, which the company believes is a key contributor to generating and sustaining interest in the platform among the translational research community.

 "To date, there have been 13 peer-reviewed publications that included GeoMx data [and] … importantly these publications are taking on a high profile within their fields." Such studies include two papers published simultaneously in Nature this January, describing the development of a new method to identify gene expression signatures associated with patient response to cancer immunotherapies.

But to really take advantage of the full market for DSP, Gray said, the next big step for NanoString in 2020 will be its planned mid-year launch of support for GeoMx readout for NGS platforms. This, he argued, will be crucial in allowing the company to effectively target customers beyond translational research and into the biologic and biomarker discovery market.

"For these customers, more information is usually better, so the massive increase in RNA content using NGS readout for genomics is compelling," Gray said, estimating that by putting GeoMx systems upstream of even just the current installed base of Illumina sequencers, NanoString could increase its addressable market by approximately 20-fold.

Laying the groundwork for this, NanoString recently launched its first ever assay for NGS readout, currently available only through its TAP: a cancer transcriptome panel that merges content from three of the firm's existing panels for the nCounter system — PanCancer Pathways, PanCancer Immune Profiling, and the IO 360 panels, as well as additional gene content.

The firm also brought two external NGS early-access sites online in the fourth quarter of last year, Gray said.

In addition, at this week's annual Advances in Genome Biology and Technology conference, NanoString presented 10 GeoMx studies, all of which featured sequencing readout.

Most used the firm's Cancer Transcriptome Atlas panel, which Gray confirmed will become available to in-house GeoMx customers around the middle of this year. Priced at $1,250 per sample, the company expects the assay to appeal to both discovery and translational research customers.

NanoString described researchers' presentations at the meeting as falling into several categories. A handful of studies focused on discovering novel spatial biomarkers "not readily detectable by traditional bulk profiling," according to the company.

Among these, investigators shared data using the Cancer Transcriptome Atlas to interrogate tissue microarrays of metastatic prostate cancer samples and characterize immune responses, to detect microenvironment-specific expression of biomarkers linked to early melanoma development, and to profile tumor, fibroblast, and immune compartments in pancreatic ductal adenocarcinoma.

Other presentations reflected the more discovery-oriented work that Gray said represents a larger untapped market for NanoString moving forward, with some featuring experiments using a follow-on to the current Cancer Transcriptome panel — the GeoMx Whole Transcriptome Atlas — which NanoString is planning to bring online for TAP users only by the end of 2020, with wider commercial launch in 2021.

These included a study by investigators at the Sanger Institute using GeoMx to analyze whole-transcriptomic profiles of neural stem cells, intermediate progenitors, and neurons in the fetal human cerebral cortex.

Another study by Broad Institute researchers used the firm's Whole Transcriptome Atlas to interrogate how tumor and microenvironment interactions vary spatially within colorectal cancers.

During its earnings call this week, NanoString fielded questions on whether potential GeoMx discovery research customers may hold off on acquiring a system, knowing that whole-transcriptome content won't be available till next year.

But Gray said that he is confident in whole transcriptome capability increasing, not decreasing customer interest in the DSP platform.

"It's hard to predict the exact timing of when all the interest we’re generating … will manifest as orders. We'll begin to see that in the second half I would expect, and we'll have more commentary on the mix of instrument orders between the translational and discovery markets as the year goes on," he said.

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