JPMHC 2019: NanoString Excels in 2018

The 37th JP Morgan Healthcare Conference was held January 7–10, 2019, in San Francisco, California, bringing together innovative companies and leaders in the healthcare and investment industries. On January 9, NanoString Technologies gave its presentation and an overview of strategic goals accomplished in 2018, prospects for 2019, and an update on its core and future product offerings.


New Applications Drive Instrument Growth

The company provided the latest information on the nCounter Analysis System, a platform for gene expression profiling, which NanoString categorizes as its core business addressing biomarker challenges in the precision medicine sector. As of December 31, 2018, there was nearly a 730-system installed base at academic, biopharmaceutical and clinical labs, a 20.7% increase from 2017. Revenues of over $75–$80 thousand annually from consumables are generated from each system, with such revenues up 18% last year. The nCounter platform was part of the accelerated product and service revenue growth of 16% for NanoString  in 2018, with revenues totaling approximately $83.5 million. In contrast, nCounter platform product and service revenues increased only 4% in 2017. The spike in sales in 2018 can be largely attributed to NanoString’s strategic positioning of the nCounter in new applications and areas.

The company identified the GeoMx Digital Spatial Profiler as a future growth catalyst, an ultra-high-plex spatial profiling system for protein and RNA, set for commercial launch in the first half of this year. NanoString has received over 30 pre-orders for the instrument, with most of these customers in the academic, biopharmaceutical and CRO sectors. According to the company, the GeoMX instrument facilitates sample preparation for nCounter or NGS analysis, using protein and RNA as reagents. The GeoMX will help establish NanoString’s presence in the digital spatial profiling market. NanoString plans to commercially launch the instrument at the American Association of Cancer Research (AACR) conference later this year, with commercial installations following shortly after.

Additionally, at the Conference, the company discussed its Hyb & Seq Clinical Sequencer, currently under development, a clinical workflow for DNA and RNA sequencing that emphasizes ease of use, and that could serve as a platform for decentralized cancer and infectious disease testing. NanoString discussed the challenges within the large clinical sequencing sector, indicating that the multi-billion dollar market is in need of a simple solution. The company listed the largest areas in the market as oncology and reproductive health. Emphasizing the challenges involved with clinical sequencing, it noted the multi-step processes of NGS, the bottleneck with bioinformatics and poor compatibility with clinical samples.

The Hyb & Seq addresses these challenges through its rapid and simple sequencing method, which requires no library preparation, enzymes or amplification. NanoString claims that customers can begin sequencing from an FFPE tumor biopsy in under 60 minutes, with the instrument providing high-consensus accuracy at a low-coverage rate. The instrument can also simultaneously capture DNA and RNA sequencing, and provides long reads with no theoretical upper limits.


2018 Review and Future Goals

In 2018, NanoString consistently exceeded its quarterly Product & Service guidance, gaining approximately $1 million more than forecast each quarter. Total 2018 Product & Service revenue guidance was $83 million, with the company bringing in $83.5 million. Nearly 135 new sales of the nCounter were made in 2018, pushing double-digit growth in consumables revenue. The nCounter SPRINT Profiler, which provides molecular barcoding for RNA, DNA and protein profiling applications, accounted for nearly 50% of all nCounter units sold. The nCounter MAX and FLEX Systems, which immobilize and count samples that have hybridized to nCounter barcodes, accounted for the remainder. Almost 40% of new system sales in 2018 were for non-oncology applications.

Several of the company’s strategic objectives were achieved in 2018, including expanding its leadership position within oncology research and diagnostics, as well as driving the nCounter platform into new therapeutic applications and sectors. Managing the first shipments of the company’s digital spatial profiling instruments and advancing development of Hyb & Seq towards its commercial launch were also goals that NanoString accomplished last year.

Oncology, immunology and neurology are the key areas of focus for NanoString in 2019, with the company planning for 11 new panels in the three applications. New company goals include bifurcating its salesforce, establishing a group of consumables specialists. Increased accountability and productivity, seasoned leadership, accurate forecasting and consistent execution were cited as other goals the company is concentrating on in 2019. The company projects that developments further driving future growth will be its universal barcoding chemistry and a diversity of platforms.