Seattle-based NanoString Technologies Inc. and its affiliates have taken a drastic step by filing for Chapter 11 protection in Delaware bankruptcy court, swallowed by a staggering $325 million debt against $275 million in assets. This move comes in the wake of a contentious legal battle, where NanoString was found guilty of infringing gene-technology patents.
NanoString Files for Bankruptcy : Legal Conundrum
In the aftermath of a pivotal trial in November, a Delaware federal jury found NanoString culpable of willfully infringing seven patents held by Prognosys Biosciences, licensed to rival 10x Genomics Inc. The verdict slapped NanoString with a whopping $31 million in damages, covering sales of contentious products spanning from May 2021 to October 2023. 10x Genomics is now pursuing further penalties against its rival.
NanoString Files for Bankruptcy : Financial Fallout
NanoString’s largest unsecured claim revolves around the $31 million judgment in favor of 10x Genomics, posing a substantial burden on the embattled company. To weather the storm of bankruptcy, NanoString has secured a lifeline in the form of at least $40 million in debtor-in-possession financing from its lenders. This crucial support aims to keep the company afloat during the tumultuous legal proceedings.
Salvaging Operations
Undeterred by the financial turbulence, NanoString is gearing up for a strategic maneuver within the Chapter 11 framework. The company intends to explore a potential sale of its business, seeking to salvage its operations and assets amidst the bankruptcy chaos.
CEO’s Response
NanoString’s CEO, Brad Gray, expressed his dismay over the unexpected turn of events, emphasizing the necessity of proactive measures to shield stakeholders, customers, and employees. Gray highlighted the formidable challenge posed by the “unusually large magnitude” of damages awarded by the jury, signaling the gravity of the situation faced by the company.
NanoString Files for Bankruptcy : Legal Counteroffensive
In a bid to fend off the relentless assault from 10x Genomics, NanoString has mounted a vigorous defense in court. The rival’s pursuit of enhanced damages, ongoing royalties, and a permanent injunction has been vehemently contested by NanoString, labeling such measures as a potential “death sentence” for its business. NanoString accuses 10x Genomics of orchestrating a calculated legal offensive aimed at stifling competition in the spatial biology arena, to the detriment of public interest.
No Immediate Response
Despite the unfolding drama, representatives for NanoString remained silent in response to requests for comment, underscoring the intensity of the ongoing legal battle and the high stakes involved.
Legal Representation
In navigating the treacherous legal waters, NanoString is backed by a formidable legal team, led by Rachel C. Strickland, Debra M. Sinclair, and other seasoned attorneys from Willkie Farr & Gallagher LLP and Young Conaway Stargatt & Taylor LLP.
