In a significant move within the biotechnology sector, NanoString Technologies, Inc. (OTC: NSTGQ), a company specializing in molecular profiling, has agreed to sell substantially all of its assets to an affiliate of Patient Square Capital for a cash purchase price of $220 million. This transaction also includes Patient Square's assumption of certain liabilities, such as those arising from outstanding intellectual property litigation.
The agreement, announced on Monday, is part of NanoString's ongoing Chapter 11 bankruptcy proceedings, which commenced on February 4, 2024. The sale process is governed by Section 363 of the Bankruptcy Code and will be subject to the approval of the United States Bankruptcy Court for the District of Delaware. The deal stipulates that Patient Square will deposit $22 million into escrow as a part of the purchase price.
The asset purchase agreement is subject to various closing conditions, including the accuracy of the parties' representations and warranties, compliance with obligations outlined in the agreement, and the absence of any material adverse effects on the company's business. The agreement also allows for the possibility of higher or alternative bids through a court-approved bidding process, ensuring transparency and fairness in the sale.
If the agreement is terminated under certain conditions, NanoString may be required to pay Patient Square a breakup fee of $6.6 million and reimburse up to $3.3 million of Patient Square's expenses related to the agreement.
The announcement made today is based on a press release statement.
InvestingPro Insights
As NanoString Technologies, Inc. (OTC: NSTGQ) navigates through its Chapter 11 bankruptcy proceedings and the proposed sale to Patient Square Capital, the company's financial metrics reflect its current challenges and potential for future growth. According to InvestingPro data, NanoString's revenue for the last twelve months as of Q3 2023 stood at $162.47 million USD, indicating a robust annual growth rate of 20.09%. This growth trajectory is further underscored by a significant quarterly revenue growth of 62.79% in Q3 2023.
Despite these positive revenue trends, the company's profitability has been under pressure, with an operating income margin of -100.07% and a substantial negative return on assets of -50.56% for the same period. These figures highlight the financial difficulties that have led the company to its current restructuring efforts. Moreover, the gross profit margin of 35.72% indicates that while NanoString is able to maintain a reasonable margin on its products and services, the overall financial burden remains heavy.
The InvestingPro Tips for NanoString suggest that investors should consider the company's potential for revenue growth and market positioning post-restructuring when evaluating the asset sale's implications. With an additional 15 InvestingPro Tips available, users can gain deeper insights into the financial health and strategic outlook of NanoString and similar companies. Interested readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, accessing a comprehensive set of tools and data to inform their investment decisions.
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