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NanoString: An Exciting Small Cap Story With A Strong Growth Outlook

Biomed Group profile picture
Biomed Group

The Life Science Tools and Diagnostics sector is important for diversification of any biotechnology portfolio. The stocks are less volatile than biopharmaceuticals and less driven by momentum players because the companies are more dependent on financial metrics especially revenue growth. NanoString Technologies (NASDAQ:NSTG) develops, manufactures and sells products for both life science research and diagnostic testing markets.

Company Overview

NanoString was incorporated in Delaware in 2003 and is headquartered in Seattle, WA. In 2008, the company launched its first commercial instrument system, the nCounter Analysis System, a system currently used by life science researchers who are performing cancer research, biomarker validation and screening, and validation of nextgen sequencing data. NanoString is pursuing a distributed model where local labs purchase/rent nCounters and run the test themselves. The company's diagnostic business is focused on the Prosigna Breast Cancer Assay, which incorporates 50 genes to test for a patient's risk of recurrence for breast cancer and classify the tumor's intrinsic subtype. Earlier this month, the company announced that it has received FDA clearance for Prosigna. The clearance occurred sooner than expected, and the test appears to have been awarded a label which allows designation of both risk category as well as risk score. The management reiterated plans to commercially launch Prosigna in 1Q14 with an initial launch to higher volume labs possible in late 2013. While the life science business currently provides a solid base, the primary driver over the next few years, from both a growth and sentiment perspective, is expected to be the ProSigna Breast Cancer assay.

The Company's Products:

1. NCounter System

The nCounter system is NanoString's simple-to-use genomic analysis platform that is the foundation for both the Life Sciences and Diagnostics businesses. Among other things, the multiplexing system is rapidly replacing older analog technologies (microarrays, PCR) while being complementary for next-gen sequencing, for areas including

This article was written by

Biomed Group profile picture
Biomed Group is an independent research group, with a goal of providing investors with real-time information and exclusive specialised research on biotechnology stocks, so that they can make informed investment decisions.

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Comments (5)

zelskid profile picture
So why is price falling on low volume?
Krassen Dimitrov profile picture
Great summary, thank you.
Why, in your opinion, the stock is so disliked by the market?
I have a pretty good idea why, but would be interested in hearing other opinions.
Best regards,
It would seem a lot easier to break into and become a legitimate 'reimbursable diagnostic company' if there is only one Goliath-type of competing firm out there (GHDX) and their >95% share in the breast cancer testing market. On the negative side of things, I feel like I'm dancing between the raindrops on this stock. I've already traded it 3 times for small profits, but worry about getting blind-sided whenever they announce a secondary offering.
zelskid profile picture
Hard to make money on this, since it is so illiquid.
SA Editor Douglas W. House profile picture
This is an article straight from the Co's PR firm. Are you sending out brochures as well?
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