Seattle-based research device company NanoString Technologies Inc. (Nasdaq: NSTG) plans to be acquired by health care investment firm Patient Square Capital for $220 million.
Patient Square is making its offer as a "stalking-horse" bidder, or an entity that puts in a preliminary offer to set the low-end bidding bar. The acquisition plans, announced Sunday, mark the latest chapter in a turbulent few months for NanoString, which has undergone multiple rounds of layoffs and filed for bankruptcy in February as it fights bruising patent litigation from competitor 10x Genomics Inc. (Nasdaq: TXG).
“This agreement with Patient Square provides continuity for our scientific customers and employees, and represents an important step in our financial restructuring,” NanoString CEO Brad Gray said in a news release. “We believe that Patient Square is committed to continuing NanoString’s mission."
The deal needs approval from bankruptcy court. A court hearing to approve the bid and bidding procedures is set for March 28, and NanoString is asking to set the deadline for competing offers at 5 p.m. on April 12. NanoString is seeking a hearing to approve the sale on April 22.
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Patient Square is headquartered in Menlo Park, California. The firm had about $8 billion in assets under management at the end of last year.
NanoString, founded in 2003, makes high-powered, high-tech imaging and research tools. Pleasanton, California-based 10x, which was founded in 2012, also makes imaging tools, as well as software and analysis tools. 10x has filed patent lawsuits against NanoString in both the U.S. and Europe.
10x in November announced a jury in the U.S. District Court for the District of Delaware found in favor of the company in a patent lawsuit, awarding 10x over $31 million in damages. NanoString is appealing the decision, a process that usually takes 12 to 18 months.
NanoString in February announced the European Union's Unified Patent Court (UPC) Court of Appeal overturned a preliminary injunction that blocked the sale of some NanoString products in 17 UPC countries. The UPC had first issued the preliminary injunction in September, and the case is awaiting a full hearing.
The February decision allowed NanoString to restart selling in 16 UPC countries. The German High Regional Court of Munich in December lifted the injunction in Germany subject to a security bond payment, and NanoString is considering next steps there after the decision, but the injunction is still in place in Germany for now.
Gray previously told the Business Journal the sales blocked in Europe represented about 10% of NanoString's overall revenue, and that NanoString’s legal bills are “many millions of dollars.”
NanoString generated $48.1 million in revenue during the third quarter of 2023, up from $29.5 million during the same period in 2022. The company hasn't released its fourth quarter results.
In February, NanoString also secured $47.5 million in debtor-in-possession financing, a type of funding for companies that file for bankruptcy. NanoString's leadership, board and employees continue to operate the company in the wake of the bankruptcy filing. The company expects to finish its most recent round of layoffs by the end of March, after which it will have just over 500 employees. NanoString has 300 Seattle-area employees, according to Business Journal research.
