NanoString Nails Breast Cancer Study, Challenging Genomic Health

Seattle-based NanoString Technologies has made a big bet that the future of the company depends on turning its genetic analysis research tool into a diagnostic workhorse. Today, it presented some hard data that suggests it is on its way.

The company reported today that its instrument, called nCounter, was able to predict whether or not women with early-stage breast cancer were likely to have a recurrence in the future, by looking at an array of 50 genes known as the PAM50 signature. The information went beyond the usual 21-gene analysis done by Redwood City, CA-based Genomic Health (NASDAQ: GHDX). While some women get clear information today from Genomic Health about when they are at “low” or “high” risk of recurrence, doctors and patients often are confused about how aggressive they should be with chemotherapies when the results put patients into the “intermediate” risk group. NanoString’s tool could prove valuable because it classified fewer patients in the “intermediate” risk category.

The findings for the NanoString study were presented today in front of several thousand people at a plenary session of the San Antonio Breast Cancer Symposium.

NanoString CEO Brad Gray

“This is one of the single most important events in NanoString’s history, along with the launch of our first commercial system,” says Brad Gray, NanoString’s CEO, when reached by phone at the conference. “It really validates we can develop diagnostics on the nCounter, and that our first product is likely to be a significant one.”

NanoString, a spinoff from the Institute for Systems Biology in Seattle, introduced the first commercial version of its tool in the summer of 2008, for research purposes only. The technology provides scientists with a digital readout on the extent to which genes are dialed on or off in a sample—what’s known as gene expression analysis. The tool has gained popularity the past couple years with academic customers, especially those at The Broad Institute of MIT and Harvard, because of its ability to help spot patterns in complex diseases like cancer where 50 or 100 genes might be perturbed instead of just one.

But the research market has its limits, and NanoString has been thinking big about the diagnostic potential for the nCounter. In October, the company introduced a second-generation product that’s supposed to have 50 percent higher bandwidth (known as throughput in the genetics business); more flexible software for analyzing the data from the instrument; and hardware that is manufactured in line with more rigorous, consistent diagnostic industry standards. Last month, the company raised $20 million in venture capital from a syndicate that includes GE Healthcare and former Genzyme CEO Henri Termeer, to help pursue its diagnostic opportunity.

NanoString’s vision is to challenge Genomic Health directly, with a different kind of business model, Gray says. While Genomic Health runs its sophisticated 21-gene analysis at a centralized lab that doctors ship samples to, NanoString envisions selling instruments to labs around the world so … Next Page »

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