On Tuesday, genomic diagnostics company Veracyte announced it had secured exclusive global rights for the nCounter FLEX technology of Seattle-based NanoString technologies, a deal Verycyte intends to leverage for global expansion of its range of clinical diagnostics products.
Under the terms of the deal, Veracty will pay NanoString $40 million in cash and $10 million in stock with the possibility for an additional $10 million on attainment of certain milestones. For Veracyte, leveraging the nCounter technology across its current range of tests, plus the development of new diagnostic tests, will allow it broader access to a global testing market it estimates to be worth $40 billion annually.
“NanoString has developed a versatile, world-class diagnostics platform, which we believe will enable us to realize our vision of becoming a leading global provider of advanced genomic testing,” said Bonnie H. Anderson, Veracyte’s chairman and CEO in a press release announcing the deal. “We are especially excited about the opportunity to bring our noninvasive nasal swab classifier to a global market, where it can help save more lives in the fight against lung cancer.”
In October, the company released positive preliminary results on a first-of-its-kind nasal swab test that can ai din the early detection of lung cancer. The genomic test was used in conjunction with computed tomography (CT) scans that detected lung nodules in 700 patients. The nasal swab test then classified the patients as either at high risk of developing lung cancer, or low risk for further development of the disease, allowing those with the highest risk to get earlier treatment.
“Early lung cancer detection is key to saving lives. However, today when a potentially malignant lung nodule is found, physicians lack accurate and reliable tools to determine which patients require more invasive diagnostic evaluation and those who can be managed with noninvasive surveillance,” said Carla R. Lamb, M.D., interventional pulmonologist at Lahey Hospital & Medical Center, in Burlington, Mass., the PI on the nasal swab test study. “Given the nasal classifier’s ability to more accurately classify cancer risk in patients with lung nodules, the test can help address this diagnostic gap, potentially helping to save more lives while also enabling patients to avoid unnecessary invasive procedures and reducing costs.”
In other details of the deal, Veracyte has obtained rights to the NanoString 510(k)-cleared Prosigna Breast Cancer Assay and nCounter Dx LymphMark assay, currently approved for research and investigational use only. Veracyte will also distribute the nCounter FLEX system for diagnostic purposes while NanoString will retain the exclusive right to commercialize nCounter products for research and investigational use.
To aid in the global commercialization of both nCounter and Veractye’s tests members of Nanostring’s diagnostic sales, marketing, medical affairs, and distribution teams will join the Veracyte. The intent is to provide the kind of pricing and commercial flexibility to drive adoption of both the nCounter system and Veracyte’s tests—expansion capabilities that wouldn’t be available via third-party distributors.
“We believe this exclusive licensing agreement with Veracyte, a leading genomic diagnostics company with a strong track record of developing and commercializing highly innovative tests, will substantially expand the number of patients who will benefit from the nCounter platform,” said Brad Gray, president and CEO of NanoString. “In addition, this transaction allows NanoString to focus our energy and resources on the significant growth opportunities in our life sciences business, especially the commercialization of our GeoMx Digital Spatial Profiler.”