Seattle's NanoString, amidst bankruptcy, is set to be acquired by Bruker for USD 392 Million. Legal battles with 10X Genomics led to restructuring and layoffs. Bruker aims to bolster spatial biology with the acquisition.

United States: NanoString has confirmed its acquisition by Bruker, marking the culmination of its restructuring journey, which included navigating a Chapter 11 bankruptcy plan. Bruker, a prominent life sciences research and diagnostic company headquartered in Massachusetts and established in 1960, will acquire Seattle-based NanoString for a sum of $392.6 million. The acquisition is anticipated to be finalized next month.

NanoString's decision to pursue Chapter 11 bankruptcy proceedings followed its defeat in a patent infringement lawsuit filed by 10X Genomics. In February 2024, NanoString announced its exploration of a potential sale as part of its restructuring efforts. Subsequently, in March, the company received a preliminary bid as part of the bankruptcy process. However, Bruker's bid, which emerged last week, surpassed the initial offer by approximately 78% in value.

The legal setback against 10X Genomics resulted in NanoString being ordered to pay over USD 31 million in damages. This prompted the company to implement several rounds of layoffs, including a 9% reduction in workforce affecting 50 positions, announced in January. NanoString's stock value, which soared to record highs above USD 80 per share in 2021, experienced a steady decline over subsequent year. In January, the company faced delisting from Nasdaq due to its stock price consistently falling below the USD 1 per share minimum requirement for 30 consecutive business days, leading to its eventual delisting on April 8.

Founded in 2003 and later going public in 2013, NanoString originated from the Institute for Systems Biology. The company had previously undergone restructuring measures, including layoffs in October that impacted approximately 110 positions.

Bruker's acquisition of NanoString underscores its strategic focus on expanding its presence in spatial biology, a field it entered in 2020 with the acquisition of Canopy Biosciences. The following year, Bruker made a majority investment in Acuity Spatial Genomics. Notably, Canopy Biosciences, now a subsidiary of Bruker, introduced the CellScape system in 2022, aimed at providing single cell targeted spatial proteomics for comprehensive tissue analysis and immune profiling.

At its Investor Day in June 2023, Bruker projected robust revenue generation from its spatial biology and cellular analysis business, indicating its commitment to enhancing Canopy's performance in spatial biology.

During the sale process overseen by the U.S. Bankruptcy Court under Section 363 of the U.S. Bankruptcy Code, Patient Square served as the initial bidder. NanoString initiated the sale process by filing for Chapter 11 bankruptcy protection in February, citing the adverse jury ruling in the patent infringement case with 10X Genomics as a primary factor.

The legal dispute stemmed from NanoString's GeoMx Digital Spatial Profiler being found to infringe on seven patents held by 10X Genomics. NanoString is currently appealing the jury's decision. Following the legal setback, the company withdrew its full-year 2023 guidance to investors and implemented workforce reductions.

NanoString CEO Brad Gray said, “NanoString’s market-leading platforms for spatial biology and gene expression are enabling researchers to gain unprecedented insights into cancer, immunology, neurology, and other critical disease areas. As a global leader in the life science analytical instrument industry, Bruker is uniquely positioned to ensure ongoing customer access to NanoString’s innovations.”

According to TechSci Research, Bruker's acquisition of NanoString is poised to significantly impact the growth trajectory of the market in several keyways. It represents a strategic move by Bruker to bolster its presence in the rapidly expanding field of spatial biology. By integrating NanoString's innovative technologies and capabilities into its portfolio, Bruker can enhance its offerings in life sciences research and diagnostics, thereby strengthening its competitive position in the market.

The acquisition is likely to stimulate innovation and drive advancements in spatial biology research. NanoString's expertise in developing cutting-edge solutions for analyzing RNA and protein spatially will complement Bruker's existing capabilities, fostering synergies that could lead to the development of novel research tools and diagnostic assays. This influx of new technologies and intellectual property has the potential to fuel groundbreaking discoveries and enable researchers to gain deeper insights into complex biological processes.

Moreover, the acquisition may have broader implications for the market landscape, particularly in terms of industry consolidation. As larger companies like Bruker expand their portfolios through acquisitions, smaller players may face increased pressure to innovate and differentiate themselves to remain competitive. This could spur further consolidation within the industry as companies seek to strengthen their market positions and capture a larger share of the growing spatial biology market.

Additionally, the acquisition could have ripple effects on investment and funding trends in the life sciences sector. The successful acquisition of NanoString by Bruker for a substantial sum underscores the attractiveness of innovative biotech companies with unique technologies and strong growth potential. This may attract increased investment interest in similar companies operating in the spatial biology space, driving further growth and innovation in the market.