NanoString Technologies just started selling its first diagnostic test after 10 years in business, and now it’s getting ready for another milestone—an initial public offering.
The Seattle-based company said today that it is seeking to raise as much as $86.3 million in an IPO, according to a prospectus filed with the Securities and Exchange Commission. NanoString’s IPO aspirations will be guided by a few blue-chip underwriters of life science companies, including JP Morgan, Morgan Stanley, Leerink Swann, and Baird.
NanoString has telegraphed this strategic move for a while, by adding the former chief financial officer of Wyeth to its board of directors last July, and then by hiring an experienced public company CFO—Jim Johnson—as its finance chief in October.
NanoString, a spinout from the Institute for Systems Biology, has grown in the past couple years, selling an instrument that provides a digital readout of how genes are expressed in biological samples. The company saw its revenues grow 29 percent to $23 million last year on selling its system to researchers, like those at top centers such as the Broad Institute of MIT and Harvard.
The company, led by former Genzyme executive Brad Gray, has spent the last several years seeking to diversify from a research toolmaker into a company that also markets its instrument to provide better diagnostic information for cancer physicians. In February, the company won European clearance to begin marketing its first commercial test—which predicts a woman’s risk of breast cancer recurrence by looking at a panel of 50 genes.
The company has burned through more than $102 million of investor money since its founding, according to the regulatory filing, and had $11.8 million left in the bank as of March 31. NanoString’s expenses have risen as it has sought to seize its diagnostic opportunity, and it has built up a staff of 138 employees. It reported a net loss of $17.7 million last year.
Who stands to gain the most if NanoString can pull the trigger on an IPO? It’s mainly three venture funds. Clarus Ventures holds a 36 percent ownership stake in NanoString prior to its IPO, while OVP Venture Partners has 23 percent, and DFJ has about 20 percent, according to the filing. Gray, the CEO, has about a 4.8 percent ownership stake.
The company hopes to trade on the Nasdaq under the ticker symbol “NSTG.”