NanoString Technologies, a leading provider of spatial biology platforms, has filed for Chapter 11 bankruptcy following a devastating patent infringement lawsuit that resulted in a $31 million damages order. In an announcement made on Sunday evening, NanoString revealed its intent to explore strategic alternatives, including the possibility of selling some or all of its business to interested buyers.

To facilitate its ongoing operations, several of NanoString's existing creditors have committed at least $40 million as debtors in possession. This infusion of funds will provide the financial support necessary for NanoString to continue serving its customer base and navigate the challenges ahead.

The Chapter 11 filing also offers a temporary respite from ongoing patent litigation against the company, specifically lawsuits brought forth by its competitor, 10x Genomics. NanoString believes that the court-supervised restructuring process will provide the necessary breathing room to address the litigation and associated financial difficulties.

"The unexpected outcome of the November GeoMx patent litigation trial in Delaware and the unusually large magnitude of the damages awarded by the jury have forced us to take proactive steps to protect our stakeholders, customers, and employees," noted NanoString CEO Brad Gray. He expressed confidence in the company's product platforms, its relationships with customers, and the integrity of its innovation process.

Amidst the legal turmoil, NanoString plans to maintain its regular operations and continue serving its customer base, which relies on the company's nCounter, GeoMx, and CosMx platforms for spatially profiling RNA and certain protein targets in cell samples. These platforms have been at the center of multiple patent infringement cases initiated by 10x Genomics in the US and Europe since 2021.

The recent patent litigation focused on NanoString's GeoMX digital spatial profiler, with a federal jury ruling in favor of 10x Genomics in November. The jury ordered NanoString to pay approximately $25 million in lost profits and an additional $6 million in royalty payments. As NanoString plans to appeal the decision, 10x Genomics has indicated its intention to seek further damages, royalties, and reimbursement for court fees while pursuing an injunction against NanoString's GeoMX products.

In announcing the bankruptcy filing, NanoString accused 10x Genomics of using its lawsuits to limit competition in the spatial biology platform space, highlighting ongoing efforts to charge its competitor with antitrust violations. Despite facing a series of losses, including a preliminary injunction against its CosMx instruments and reagents issued by the European Unified Patent Court, NanoString remains confident in its product development process and legal claims against 10x Genomics.

This bankruptcy filing marks a pivotal moment for NanoString Technologies as it seeks to navigate the challenges posed by patent litigation and secure a path forward. The company will continue to operate, serving its valued customer base while exploring avenues for a strategic resolution in the best interest of its stakeholders, customers, and employees.