NanoString Forges Closer Ties With Broad Institute to See What Genetic Tool Can Really Do

Xconomy Seattle — 

NanoString Technologies, the maker of a machine that lets scientists digitally analyze how genes are turned on or off in a tissue sample, just won a glowing endorsement from one of the biggest names in biology—Eric Lander of the Broad Institute of MIT and Harvard.

The Seattle-based company has nailed down a three-year research collaboration with the Cambridge, MA-based Broad Institute to look at how networks of hundreds of genes work in concert to form immune defenses against foreign invaders. Financial terms aren’t being disclosed, but NanoString has sold the Broad a couple discounted nCounter machines that normally retail at $235,000 apiece, and will provide proprietary reagent chemicals to operate them, according to acting CEO Wayne Burns. In return, NanoString gets certain intellectual property rights from the collaboration, advice on how to improve its tool, and some golden word of mouth.

NanoString, a private company founded in 2004 with technology from the Institute for Systems Biology in Seattle, has been building stronger ties to the Broad over the past year as people there have started using one of the first commercially available machines, Burns says. The mounting enthusiasm at the institute was instrumental in helping NanoString nail down a $30 million venture capital round in June. The round was led by Clarus Ventures, which has an office just a couple blocks from the Broad. Word has spread to the point that 15 researchers at the Broad are now involved in 20 separate collaborations to see whether the NanoString technology can yield biological insights that couldn’t realistically be attained with competing instruments, Burns says.

“NanoString offers the ability to look at hundreds of genetic markers across many samples at relatively low cost and with high sensitivity. They have developed exciting technology with potential applications to a wide range of scientific problems,” said Lander, the director of the Broad Institute, in a NanoString statement. “We look forward to working together to explore new ways of using of this technology.”

That kind of endorsement is sure to carry weight in the biomedical research community, and can’t hurt a fledging company trying to increase sales. “If you’re in the industry you know exactly who Eric Lander is, the reputation he has, as well as that of the Broad. We have the best of the best endorsing our technology,” Burns says.

For those who are new to the NanoString story, the idea is to allow researchers to look at a large number of genes, with digital precision, to see the extent to which they are turned on or off in a given sample. It’s the sort of technology that’s supposed to help researchers do a new kind of large-scale genetic experiment, where they might, for example, compare 100 genes or more from 100 different patients with diabetes to see how they respond to certain therapies. In the $1 billion market for gene expression instruments, the NanoString technology is made to compete with real-time PCR machines from big players like Carlsbad, CA-based Life Technologies (NASDAQ: LIFE), San Diego-based Illumina (NASDAQ: ILMN), and Switzerland-based Roche.

The new Broad collaboration is meant to demonstrate how scientists can learn new things from using the nCounter, Burns says. Researchers at the Broad will be looking for specific gene signatures of immune response, and NanoString will look to build on that knowledge by making customized lab tests, he says. Scientists at the Broad, Massachusetts General Hospital, and NanoString published some of their work last month in Science Express that showed how they could describe the complex circuitry involved in how mammalian cells recognize a pathogen—a finding that shed some new light on immunology. The new collaboration will look to build on that work and explore how stem cells morph into specific adult cells. It will also look at how long stretches of RNA that aren’t involved in carrying out instructions from genetic code are potentially involved with regulating the extent to which genes are dialed on or off.

Intriguing as it all sounds, NanoString isn’t saying how quickly it is translating scientific enthusiasm into actual sales. The company has grown to about 50 employees, while adding a handful of new people in the sales department in recent months, Burns says. Sales have grown each quarter since the product has been on the market, he says. NanoString has now sold its machine to biotech, pharmaceutical, and industrial customers, as well as those in academia or government like the Broad and the National Cancer Institute. The corporate customers insist on remaining anonymous, Burns says.

While the sales team seeks to gain momentum, NanoString is looking to add new capabilities to the machine, Burns says. The nCounter should include new applications in the first half of 2010 that allow scientists to do analysis of microRNA, the tiny strands of code that regulate networks of genes, as well as look for copy number variants, which represent subtle alterations of genetic code, Burns says. Other customers are interested in using the nCounter’s existing applications as a diagnostic tool, he says.

The last thing I had to ask Burns was about who’s going to end up running the show at NanoString. Burns has been holding down the title of acting CEO since Perry Fell stepped down in March. The company has hired an executive search firm, but it doesn’t have plans to make an imminent announcement of who will get the job, Burns says. He’s not a candidate himself, because the company is looking for someone with more industry experience to help commercialize the product, he says.