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NanoString Technologies, Inc.(NASDAQ:NSTG)

Q3 2013 Earnings Conference Call

November 5, 2013 4:30 PM ET

Executives

Lynn Pieper – Investor Relations

Brad Gray – President and Chief Executive Officer

James A. Johnson – Chief Financial Officer

Analysts

Dan G. Brennan – Morgan Stanley & Co. LLC

Justin D. Bowers – Leerink Swann LLC

Operator

Good day ladies and gentlemen and welcome to NanoString 2013 Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference call may be recorded.

I would now like to turn the conference over to Ms. Lynn Pieper. Ma’am, you may begin.

Lynn Pieper

Thank you. Earlier today, NanoString released financial results for the quarter ended September 30, 2013. If you’ve not received this news release or if you’d like to be added to the company’s distribution list, please call Westwicke Partners at 415-202-5678.

Before we begin, let me remind you that the company’s remarks include various forward-looking statements including projections of future business growth and the factors underlying such growth. Estimates of market penetration and revenue-generating potential of new product offerings, anticipated timing and outcomes of ongoing clinical studies, anticipated presentation and publication of data from clinical studies, expectations for the timing of launch of Prosigna, expectation regarding Prosigna’s competitive profile and market acceptance, the timing and nature of Prosigna reimbursement related decision, plans for and timing of applications and decisions regarding the inclusion of Prosigna treatment guidelines and projected financial results for the year 2013. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond NanoString’s control including risks and uncertainties described from time to time in NanoString’s SEC filings.

NanoString’s results may differ materially from those projected on today’s call. NanoString undertakes no obligation to publicly update any forward-looking statement. Additionally, non-GAAP financial measures maybe referred to during today’s call. A reconciliation of these non-GAAP measures is included in today’s press release, which is available on the NanoString website.

With that, I’d like to turn the call over to Brad Gray, President and CEO of NanoString. Brad?

Brad Gray

Thank you, Lynn. Good afternoon and thank you for joining us on our Q3 call. During the third quarter, we continue to build fundamental value across bulk of our businesses. We posted strong top-line growth of 39% and record revenue of $8.4 million driven by acceleration in our Life Science business. Our instrument revenue grew by 63% reaching a total of $3.6 million. We expanded our gross margin to a record 55% driven primarily by efficiencies in our consumable manufacturing. Finally, we substantially expanded our addressable market into clinical laboratories to the FDA 510(k) clearance of our Prosigna Breast Cancer assay and the launch of nCounter Elements General Purpose Reagents. Overall, we’re extremely pleased with our performance and achievement during the quarter.

This afternoon, I’ll provide a business update and then we’ll turn the call over to our CFO, Jim Johnson, who will provide more detail on the financial results and will provide our updated outlook for 2013. We’ll then open up the call for your questions.

On the Life Sciences side of our business, we achieved $8.1 million in revenue in Q3, 34% growth over 2012 and 15% sequential growth. Our momentum is being driven by increasing Life Sciences instrument revenues, which grew 50% year-on-year. We believe that this is a direct result of the investments that we have made in our commercial channel over the past several quarters and solid execution by our team. Life Sciences revenue was particularly strong outside North America where we’d have recently expanded with our direct and distributor channels. In particular, the Asia Pacific accounted for 18% of our revenue and approximately half of the growth in our Life Sciences business.

Two important trends that we experienced during the second quarter continued during Q3. These are first, the strengthened demand from biopharma customers and second the increasingly important role that nCounter technology is playing in cancer research. During the third quarter, we continue to see our business shift towards biopharma customers. The fraction of our consumable revenue coming from these customers has increased in each sequential quarter during 2013. As an example of our growing strength in this market segment, during the third quarter one leading biopharma company places multiple consumable orders totaling over $1 million in value. These reagents will be used to support large scale studies in the development of cancer drugs. The study and treatment of cancer is a critical part of NanoString’s mission and a primary driver of growth for both of our businesses.

Consistent with last quarter, we estimate that approximately 70% of our new Life Sciences instrument placements in the third quarter will let customers focused on cancer research. We expect that cancer research will continue to be an important driver of future growth. The extensive use of nCounter technology and cancer research sets the stage for expansion into the clinical market, while we speak to centralize and democratize complex testing for cancer. We look a major step forward in serving the needs of clinical labs with the launch of nCounter element through an Early Access Program at the end of July. The nCounter element is the line of general purpose reagent developed specifically to meet the needs of translational researchers and clinical labs. Using nCounter elements, our customers can assemble their own customized assay by combining standardized barcode provided by NanoString with probes purchased independently from a third-party oligonucleotide manufacturer.

This is by far the single most important launch of our Life Science business over the past two years and as it stands for market reach and the clinical testing for the first time, increasing our addressable market substantially. Participants in the Early Access program will receive a starter package to support initial experiment using nCounter Elements. And then have the opportunities that provide feedback which we can incorporate into our commercial processes to ensure the best possible customer experience after launch. We’re pleased with a strong level of interest so far and have already met our target of 15 early access customers for a spread across three continents. Interest is growing. And we expect to continue the early access program through the fourth quarter.

While a handful of participants in the early access program planned to use nCounter Elements for research, the majority into run Laboratory Developed Test or LDTs. Many of them are developing LDTs based on gene expression signatures that they are initially validated using our traditional nCounter chemistry. Others wish to offer LDTs based on assay that they read about in one of the over 300 peer-reviewed papers published by our customers. For instance several Early Access participants intend to offer AML 4 fusion testing for lung cancer patients based on the techniques first described in a paper offered by researcher’s provider and published in the Journal of the molecular diagnostics in January 2015. Another important development, we announced a collaboration agreement with BD Biosciences, a segment of Becton, Dickinson to jointly develop a single cell isolation and analysis workflow.

Single cell gene expression is a small, but rapidly growing approach to genome research. Our recent market research report from BD Bio has estimated that single cell genomics market have $75 million in value today growing to over $500 million by 2018. Performing single-cell experiments involves first isolating cell and then analyzing them individually. BD Biosciences is the leader in cell isolation with instrument platforms that can start to sell on numerous parameters simultaneously. While the nCounter Analysis System provides the opportunity to probe up to 800 genes from a single isolated cell. When used together, our systems provide tremendous power and flexibility for scientist to perform a wide range of single-cell experiments in fields such as oncology, immunology and stem cell research.

The agreement with BD Biosciences will allow NanoString to present perspective customers with a comprehensive workflow for a single Cell Gene Expression Analysis and co-host meetings and seminars to educate scientist about the single-cell workflow. We believe that the single-cell application will contribute to our growth in 2014 and beyond. Finally on October 1, we announced that we have settled all outstanding lawsuits with Fluidigm Corporation related to a comparison study of single-cell gene expression capability. This is important as we can now return our full attention to managing our growing business and delivering innovative genomic products to our customers.

Now move into our diagnostic business. During the third quarter, we achieved a similar milestone for our company with the FDA 510(k) clearance of our Prosigna Breast Cancer Assay produced in conjunction with the nCounter Dx Analysis System, while delivering steady progress in other areas. Our efforts during the third quarter were focused on three primary objectives, first to sustainably develop the market for Prosigna outside the United States, second to rapidly expand the body of clinical data that we can use to educate physicians and payers about the advantage of the Prosigna and third to lay the groundwork for U.S. Prosigna launch in early 2014. I’ll now review our recent progress on each of these key areas. We continue to lay the foundation for broad loan-term adoption of Prosigna outside the United States.

Our first priority has been to place Prosigna capable nCounter Dx Analysis Systems and major academic centers and commercial clinical labs, which can serve at local or regional centers of Prosigna testing. We have been positively surprised that so far early adaptors doctors of Prosigna has preferred to purchase rather than rent in nCounter Dx Analysis System. To date the sales cycle for our diagnostic instruments appear to be similar to that of our Life Sciences business, which can extend over 6 months or more. Therefore as we are establishing an installed base, the majority of our early diagnostic revenue is coming from instrument sale.

Recall during the second quarter, we placed three diagnostic systems, two for use and decision impact studies and staining and one for commercial testing of breast cancer patient in the Middle East. During the third quarter that commercial systems serving patients in the Middle East generated our first Prosigna kits sales, totaling approximately $40,000. During the third quarter, we shipped four additional diagnostic systems, two for use in a decision impact study in Germany and two for commercial testing elsewhere in Europe. These two new commercial systems are expected to generate their first Prosigna kit orders during the fourth quarter. Meanwhile, our two ongoing decision impact studies, which we expect to be important drivers of long-term demand and reimbursement in Europe, are progressing according to plan.

This data study which we initiated during the second quarter has now enrolled over a 125 patients and is expected to complete enrollment round the end of the year. The New York German study, which we initiated during the third quarter, is expected to enroll patients at 10 medical centers across Germany and yield results in 2014. Building a critical map of data on Prosigna’s performance is important for our commercial success and we have made significant progress on this front.

During the third quarter, clinical results that further differentiate Prosigna from competing breast cancer test were reported in two Peruvian publications. Both of these papers reported results from the landmark trends impact study. First, the full 10-year results of our TransATAC clinical validation study were published online in the Journal of Clinical Oncology in July. And second, the late recurrence results from the TransATAC studies were published online in the Journal of the National Cancer Institute in September.

We expect these patients to become a centerpiece of discussion with payers and guidelines committees, particularly because they established Prosigna’s advantages relative to Oncotype DX, a test that is already included in numerous breast cancer treatment guidelines and widely reimbursed within the United States.

Looking ahead we expect publication or presentation of several additional clinical validated results in the near-term. We recently learned that the results of our ABCSG8 clinical validation studies have been expected for publication in our major Peruvian Journal and expect that to be one of several additional papers published in the months ahead. In addition, there will be a podium presentation on for Prosigna’s ability to predict late recurrence at the San Antonio Breast Cancer Symposium in December.

The most important achievement in the last quarter and perhaps our tenure history of the company with the FDA’s 510k Clearance for Prosigna, which we announced on December 9. We are extremely pleased by both the timing of the FDA Clearance and the strength of the label. And we are confident about the competitive profile of Prosigna.

We believe post-menopausal provides the optimal balance of individualized information, clarity and familiarity. We expect that the report will be intuitive to oncologists who have been users of other breast cancer genomic test. By integrating Prosigna into existing laboratory workflow and eliminating the need to shift two more samples to a specialized testing lab. We are offering physicians and patients seamless and timely access to clinical insights and a tool that is useful as aided in making a clinical decisions

We believe that Prosigna is compelling clinical data, clear patient reports and unique delivering model positioned for Prosigna for success in the U.S. market. We are on track to have Prosigna enabled nCounter Systems available for placement and high complexity clear labs later this quarter. And we will be showcasing the nCounter Dx Analysis System publicly for the first time as the annual association of molecular pathology or ASCO meeting in Phoenix next week.

We are also on track to make Prosigna testing services available in the U.S. during the first quarter of 2014. We expect the U.S. Prosigna revenue to ramp throughout 2014, building momentum as we established reimbursement and gaining inclusion and treatment guidelines. On the reimbursement side, we are actively working on both coding and coverage by laying the groundwork for Prosigna’s inclusion in the MolDx program run by CMS.

We’re submitting an application to McCasin for a unique decode for Prosigna and expect that it will be assigned a code by fairly in the coming year. Once the decode has been assigned, we plan to submit an application for coverage. The MolDx program could provide a positive coverage decision by as early as the third quarter 2014 for states covered by Palmetto and Meridian which includes the largest molecular diagnostic testing sites for the largest U.S. commercial labs. During this period, we will also be engaging with private payers to first establish positive coverage decisions and then collaborate with them to establish a coding approach that works for their health plan.

In parallel to the reimbursement work, we have begun to execute on our strategy to gain for Prosigna’s inclusion in key breast cancer treatment guidelines. Within the United States, the most important treatment guidelines for breast cancer are those maintained by the National Comprehensive Cancer Network or NCCN. We’ve been encouraged by our discussions with NCCN and plan to apply for inclusion in the guideline during the first half of 2014. Following the publication of the result of our ABCSG8 study, these guidelines are updated on an annual cycle and, the meeting typically held each July will update the guideline published in each form.

Our base case expectation as that Prosigna will be considered by the guideline committee during summer 2014 and referenced in the NCCN guidelines at the time of the next commercial regularly scheduled update in the second half of 2014. In addition to laying the groundwork for reimbursement of guidelines, we’re actively pursuing or actively recruiting our U.S. commercial leadership team and are engaged in numerous discussions with leading cancer centers and commercial labs.

We plan to have a strong commercial presence for Prosigna at both the AMP meeting next week in the San Antonio Breast Cancer Symposium. in December.

I’d now like to hand it over to Jim Johnson, who will review our Q3 financials and outlook for 2013.

James A. Johnson

Thanks Brad. First I’m going to review our results for the third quarter and then I will provide our updated financial guidance for the year.

Total revenue for the third quarter was $8.4 million, up 39% over a strong third quarter in 2012. Sequentially, total revenue grew by 16% over a solid second quarter of 2013. All of the $327,000 of our reported revenue for the quarter was from our Life Sciences business. Total instrument revenue was $3.6 million, up 63% from the third quarter 2012.

Our installed base continues to build and now stands at over 160 systems. The acceleration and growth is being driven by the expansion of our sales and distribution channel. And we are seeing increased traction in all major geographic regions with particular strength in the Asia Pacific region.

Consumable demand was also robust at $4.4 million for the quarter. Consumable revenue was up 24% over the third quarter of 2012. Average pull-through per system in Q3 continued to exceed $100,000 on an annualized basis. Notably gross margin continued to improve to 55% compared to 49% a year ago. The primary driver of growth margin expansion is that we’ve consistently generated consumables manufacturing efficiencies as our scale has increased.

Certain favorable overhead cost variances also contributed to the increase in Q3 and this improvement in gross margin occurred despite a shift in product mix toward lower margin instrument revenue. Due to the strong instrument sale, consumable revenue was only 53% of total revenue this quarter versus 60% last quarter and 59% in Q3 of 2012. R&D expense was $3.8 million, up 23% over Q3 of 2012 and the increase reflects our ongoing investment in the development of our next generation of nCounter technology.

SG&A expense was $8 million for the quarter, up significantly from $4.2 million a year ago. The increase primarily reflects investments to expand our Life Sciences sales channel, litigation related cost and other increased corporate cost related to our transition to public company. Operating expense for the quarter included $278,000 of stock compensation expense compared to $149,000 in the third quarter of 2012.

Company ended the third quarter with $52.2 million of cash, cash equivalents and short-term investments. For your reference, we’ve included a schedule of non-GAAP financial information in our press release. And on a non-GAAP basis and describe further in that schedule, our net loss for the quarter was $6.4 million or $0.44 per share compared to $3.9 million of $0.49 per share in the third quarter of 2012. Please refer to that schedule for a summary of these items.

So now let’s shift to our financial guidance for the full year 2013. Based on the strength of our Life Sciences business in Q3 and the outlook for Q4 we’re increasing the low end of our range of total revenue guidance for the year from $29.5 million to $30 million. Our updated total revenue guidance is $30 million to $31.5 million for the year, which reflects approximately 31% to 37% growth over 2012. Our Life Sciences revenue expectations are $29 million to $30 million for the year, which implies a range of $8.2 million to $9.2 million in the fourth quarter of this year.

Our diagnostics revenue expectations for 2013 are unchanged at $1 million to $1.5 million for the full year, which in Q4 will largely be driven by additional diagnostic instrument placements, including initial sales to U.S. customers that may occur in late Q4. Actual fourth quarter diagnostics revenue will be heavily impacted by the mix of instrument purchases, which will drive near-term instrument revenues versus reagent [indiscernible].

For the year in total, we’re increasing our gross margin guidance to reflect the strong strength we’ve experienced through September and we now expect to be in the range of 50% to 53% for the year up from our prior guidance of 48% to 51%. With capital low end of the range at 50% because we see momentum in instrument sales that could shift product mix even more toward instruments in the fourth quarter, which would produce the lower overall gross margin.

For operating expenses, we expect $44 million to $46 million for the year, a decrease from our prior guidance of $45 million to $49 million. We still expect operating expense to be split approximately one third to R&D and two thirds to SG&A and there should be approximately $1 million to $1.2 million of stock based compensation expense included in operating expenses. We continue to expect interest expense to be about $2 million for the full year, capital expenditures are expected to be less than $1.5 million in total for the year and they expect to end 2013 with over $40 million of cash and investments.

With that, I’ll turn it back over to Brad to wrap up.

Brad Gray

Thanks, Jim. In summary, our business has made significant progress in 2013 to date and we’re confident that we will finish the year strong and enter 2014 with substantial momentum. We’re creating fundamental value with a combination of robust revenue growth, gross margin expansion and the entry into the clinical laboratory market through innovative products, such as nCounter Elements and the Prosigna Breast Cancer Assay. We accelerated the use of genomic science that benefit patients globally. We’ll be kicking of our campaign with installed base of nCounter systems of the U.S. clinical lab at the annual lab meeting next week.

At this meeting we’ll be talking to potential customers for the first time about all three of our clinical laboratory offerings, the new nCounter of Dx Analysis System, our Prosigna Breast Cancer Assay, and our nCounter Elements General Purpose Reagents. So, these three offerings in hand, we believe that we’re uniquely positioned to offer local labs the opportunities to perform complex, high value clinical testing for cancer.

We expect that the clinical laboratory market will emerge as the major catalyst for growth for both of our businesses during 2014. We look forward to updating you on our progress during future calls.

I will now like to open up the line for questions.

Question-and-Answer Session

Operator

Thank you, sir. (Operator Instructions) And our first question comes from Daniel Brennan from Morgan Stanley. Please go ahead sir, your line is open.

Dan G. Brennan – Morgan Stanley & Co. LLC

Hey, guys, thanks for taking the questions. Congrats on the quarter. I wondering if you can start off maybe with some color just on maybe some customer trends, kind of economic and pharma, I know you said pharma strength in your prepared remarks, but I’m just wondering, I know economic is a big customer base of yours, kind of what did you see in the quarter. Any color you can give us on kind of the economic demand trends and how that shutdown and the ongoing sequestration is impacting you there?

Brad Gray

Sure Dan, thanks. This is Brad. I think the first strong trend is the strength in biopharma, obviously we reported last quarter that 35% of our consumable revenue came from biopharma that was up sequentially both in absolute terms and our percentage of our overall consumables. And we think that represents from that segment, a growing and deep commitment to using nCounter in the bio-market discovery and validation, that’s associated with cancer drug development. That, the strength in the biopharma segment combined with the strength in our ex-U.S. growth, where we’ve invested heavily in both our direct channel and our distribution relationships, are growing over 40% in direct headcount and doubling the number of distributors we had in this year alone, offset weakness that we did see in the U.S. market, especially in consumable demand during the quarter.

Dan G. Brennan – Morgan Stanley & Co. LLC

Okay, and then the kind of as we look out and for your biopharma and kind of economic customer basis taking out the Life Sciences out of the business and where are we? Maybe can you help us to think about it where are you with kind of your ex-U.S. opportunity in Asia-Pac was generated half your growth I believe this quarter. So, can you help us sort of frame as you’ve kind of increased the number of, kind of distributor in sales force relationships, how we should think about kind of penetration or dynamics looking-forward kind of with the different customer bases?

Brad Gray

We think over time ex-U.S. will contribute a larger and larger fraction of our revenue base overall. The reason for this is both historical, we’ve started at the private company focused in the United States with the direct channel here, and so we have a store installed base in North America, that’s more substantial than overseas. Dan, because our investment is both direct, it’s kind of overseas and the distributable relationship is relatively recent. Our experience is that it takes letters of sales rep or a distributor, it takes on average maybe nine months to become fully effective. So, many of these distributor relationships that we put in place in the first half of 2013 are really just now beginning to make material contribution to our growth and we’ll make even more meaningful contributions in 2014 and beyond.

Dan G. Brennan – Morgan Stanley & Co. LLC

Okay. And then on the elements I mean obviously it sounds like it could be a tremendous opportunity for the company and I know you have got the 15 early access placements out there. How do we think about the transition from these early access placements just kind of turning into kind of revenue producing customers anyway to help us think about the elements opportunity and/or the timing of kind of how that begins to materialize?

Brad Gray

Sure, so elements will not be a material contributor to revenue during calendar year 2013 for us, right now it’s just at the beginning, but it will become a more material contributor during 2014. The element is a core part of our strategy for entering the clinical markets. And so for us one of the great benefits of the elements offering is an opportunity to grow our install base as instruments into a segment of the market that we never approached in the past which is the U.S. CLIA laboratory. So at the end of the first manifestation of having elements as an offering will probably be the sale with additional systems into that new market segment, which is unpenetrated by us.

Just to give you some color around the participant write-down in our early access program, we’ve had a majority of participants as I said interested in laboratory developed test. Several of these are actually poor profit diagnostic companies who are interested in be reporting certainly one of the little platforms on to encounter or to offer a new test that would have been just too difficult to automate on the encounter, on another platform on encounter. So we have interest both from commercial entities and the classic cancer laboratory appears an element. So we’re very excited about the potential to tab in a new market.

Dan G. Brennan – Morgan Stanley & Co. LLC

And then well I know you’re not discussing the forward year just on Prosigna, just anything you can share regarding maybe how we should think about the taste of that initial kind of penetration given the fact that I think you mentioned in the prepared remarks. You’re kind of expecting to get NCCN maybe the guideline includes maybe in the back half of 2014.

You are discussing any Z code and maybe again in the MolDx and they’re kind of back half of maybe the Z code early but the MolDx later in the year which will drive Medicare adoptions. So as we think about the coverage and guidelines coming through the back half of 2014 and how that – any thing you can say at this point regarding how we think about maybe the kind of first half 2014 versus second half 2014 with Prosigna uptick?

Brad Gray

Sure, so clearly reimbursement and guidelines are major catalyst for Prosigna adoption in the United States and we would expect momentum to build over the course of 2014 and therefore of course in the launch here more revenue in the back end and in the front end. Now that being said we think there will be an uptake ahead of guideline reimbursement and a guideline inclusion of reimbursement. And that’s because the combination of clinical data the opportunities are localized or regionalized testing and frankly the opportunity for laboratories to process by adopting and winning market share using for Prosigna just compelling.

We’ve had substantial early interest from both cancer centers and clinical laboratories who are interested above and being amongst the first way that last to offer Prosigna in the United States and they understand that they’ll kind of have to be partners with us in establishing reimbursement in those early months, but that’s not a typical for labs who look to operate at the cutting edge and you can look at other areas of molecular diagnostic innovation like non-invasive prenatal testing, the entry of sequencing into the clinical market with even the enthusiasm of many major labs for launching BRCA test to understand that there is a pent up demands to participate in some of these dynamic segments in the market and a willingness and ability to help advocate for reimbursement in the early days.

Dan G. Brennan – Morgan Stanley & Co. LLC

Great, I’ll get back in the queue. Thank you.

Operator

Thank you. And our next question comes from Dan Leonard from Leerink Swann.

Justin D. Bowers – Leerink Swann LLC

Hey, good afternoon everyone. This is Justin on for Dan. So just on the two commercial sales that you placed, where was that geographically? And then, again, can you remind us kind of what proportion of your instrument placements were motivated by Prosigna and kind of whether or not you’re seeing any changing trends there?

Brad Gray

Sure, thanks Justin. So the two commercial systems that we sold out binding United States, one went to a Commercial Testing Laboratory in Italy and the other went to a major medical provider in Turkey. So again exciting to penetrate markets that haven’t traditionally had access to genomic testing for breast cancer patients. In terms of the contribution of Prosigna capable systems to the instrument revenue in Q3, it was very small and so $285,000 of our instrument revenue in total was from the diagnostic segment of our business with the remainder coming from our Life Sciences segment. So it’s still early days in the launch of our diagnostics instrument platform I thought in the United States.

Justin D. Bowers – Leerink Swann LLC

Okay. And then just one more on the BD agreement, I think you did size put some numbers out there the opportunity being $75 million to $90 million or ballpark around there. But how you guys actually like thinking about commercializing that in 2014 or 2015? And then should we keep our eyes opened for other types of arrangements like that in the future?

Brad Gray

So the single-cell gene expression application for NanoString has been available for about a year now, we first announced it in September of 2012. So far it’s been an area of interest to many of our customers, but a relatively small contributor to our overall revenue growth. One of the offerings that we haven’t had is a complete workflow solution that would help researchers both isolate cells and then analyze them. With the new partnership, we believe our offerings can be more complete and more compelling and then that can become a more meaningful contributor in 2014, but for us it’s still – we still expect it can be relatively small part of our business as compared to the say the incorporation of income with the cancer research or into the development of new therapeutics. In terms of future partnerships, we do remain open to working with companies with complementary interests such as in this case BD cell isolation capability and our cell analysis capability if you know we’re not announcing anything today, but that could be a part of our strategy in the future.

Justin D. Bowers – Leerink Swann LLC

Okay, great. Thank you.

Operator

Thank you and I’m showing no further questions at this time.

Brad Gray

Well thank you everyone for joining us today. We look forward to seeing many of you in the AMP in the San Antonio Breast Cancer Symposium in the future. Thank you for your interest in NanoString.

Operator

Ladies and gentlemen, thank you for participating in today’s conference. This concludes our program for today. You may all disconnect and have a wonderful day.

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