NanoString Starts Selling First Breast Cancer Test in EU

2/19/13Follow @xconomy

NanoString Technologies is now officially in the diagnostics business.

Seattle-based NanoString is announcing today that it has begun selling its first diagnostic product in the European Union and Israel. It’s called the Prosigna Breast Cancer Prognostic Gene Signature Assay, and it’s designed to provide a digital readout on the expression of 50 genes that are implicated in the growth and spread of cancer. Women who get this test will be given a score that estimates the chance that they will suffer a recurrence of their cancer, after they get the usual hormone-blocking therapies.

The beginning of European sales is a big milestone for NanoString, which has sought to branch out from its base as a maker of instruments for research use only. NanoString is now in position to compete with Redwood City, CA-based Genomic Health (NASDAQ: GHDX), which has a different business model. While Genomic Health performs a service that requires physicians from all over the world to send a tumor sample to its central lab in California, NanoString is using a traditional razor/razor blade sales model. NanoString plans to sell its instruments to the hospitals directly, and keep selling them the chemical reagents on a recurring basis so the hospitals can perform the diagnostic tests on site.

NanoString’s big wager is that healthcare providers, especially those in Europe who haven’t fully embraced the Genomic Health test, will finally opt this time for predictive testing based on the genetic profile of a breast cancer patient.

NanoString CEO Brad Gray

“We think we’re doing a great thing to bring localized genomic testing for breast cancer to parts of the world where it hasn’t previously been available,” Gray says.

Genomic Health has had success convincing physicians and payers that its new type of genomic test has value, since it first hit the market in 2004. The company generated more than $235 million a year in sales for its Oncotype Dx test last year, but hasn’t made the same inroads in Europe that it has in the U.S. NanoString sees Europe as a “greenfield,” Gray says, because reimbursement authorities have tended to balk at Oncotype’s price—$4,000 a test in the U.S.—and many physicians have been reluctant to ship their valuable tumor samples overseas to get a result.

Part of NanoString’s pitch is about science, but a large portion is also about economics and practicalities. NanoString’s test looks at 50 genes rather than Genomic Health’s 21-gene test, and one study has suggested that NanoString can reduce the number of patients who fall into the gray zone with an “intermediate” risk of recurrence, compared with the Genomic Health test.

The economic question, of whether NanoString’s product is more affordable, will depend on whether hospitals get a lot of usage out of their nCounter instrument. That’s because … Next Page »

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  • Edgar Ali

    Good Job, the information is so clear. It looks like nanoString will grow a lot this year.