NanoString CSO Joe Beechem Insists the Company “Not Going Anywhere”

Joe Beechem, PhD, CSO and senior vice president of research and development at NanoString Technologies is no stranger to the development of new genomic technologies. Moving from a substantial academic career to industry about 20 years ago, Beechem pioneered some of the first next-generation sequencing (NGS) instruments. More recently, he has been developing spatial transcriptomic technologies at NanoString.

Over the past several years, NanoString has been mired in a legal battle with 10x Genomics over their spatial technology. This week, NanoString filed for bankruptcy.

GEN caught up with Beechem at the AGBT meeting being held in Orlando, FL, for an exclusive interview to discuss the current state of the spatial biology field, why the company chose to file Chapter 11, and where it goes from here.

This interview has been edited for length and clarity 

LeMieux: Joe, how many years have you been coming to AGBT and how has the meeting been this year?

Beechem: I have been coming to AGBT for 21 or 22 consecutive years—I missed only the first few years. It is always a good meeting. It is a very unique meeting, as you know. It is about the technology and the technology makers. Here, you can talk about things without having to take a long time to explain how you did it or what you mean. Everybody speaks the same language here. I like this meeting the most for that reason. And I have seen a lot over the last 22 years.

LeMieux: NanoString shared the news on the eve of AGBT that it is filing Chapter 11 to restructure the company. Can you tell us what happened?

Beechem: There are two parts to this: what happened and what it means for us. The origin of how it happened goes back to the litigation associated with freedom to operate in the spatial biology technology space.

NanoString hosted the very first spatial genomics summit at AGBT in 2019. Spatial biology was not really a topic that was normally discussed here, but the field was pretty much brand new. We were the only company with a commercial spatial platform on that stage. But we made a conscious decision, along with Brad Gray [NanoString’s CEO] and the rest of the executive team, to be inclusive of all of the other technologies in our summit. We invited other early inventors of spatial technology: Fei Chen, PhD, (Slide-seq2), Jeffrey Moffitt, PhD, (MERFISH), and Sanja Vicković, PhD, (talking about a technology developed from SciLifeLab that eventually became 10x Genomics’ Visium). We knew that spatial biology was a broad area of technology with many application areas, and no single approach would make the perfect Swiss Army knife for every application.

We knew that NanoString was going to specialize in high plex, multiomic, FFPE applications. The other technologies had different sweet spots. Vizgen’s specialty was cleared mouse brain, which they probably do better than anybody in the world.

Now, just a few years later, all of the companies that were built around the technologies developed by my diverse set of panelists are being sued by 10x Genomics (with the exception of the technology that 10x Genomics bought).

NanoString wasn’t structured to have the money laying around to be able to pay the legal bills that come when a monster company litigates you from A to Z. We made a decision: we want to keep our customers’ access to our products and new technologies, to keep building CosMX and GeoMX instruments, to continue to develop our entire product development roadmap, to provide customer service, and to do everything that we are currently doing. And Chapter 11 allows us to do that. I haven’t changed my product roadmap a bit. I haven’t changed technology development a bit. We’re pushing the limits of technology development, just like we have for years.

Chapter 11 generated $47.5 million worth of funds to keep everything rolling and allows us to continue developing technology. At the same time, we will restructure. The next time you see us on the other side of that process, we will be a different type of company, even stronger than we are today.

We believe in our technology. We invented this technology. We are going to continue to defend it. And the financial backing will allow us to fight the fight.

LeMieux: What has the reaction from the spatial community been?

Beechem: The outpouring of support from our customers and other scientists has been unbelievable. I can’t tell you how many people come up to me and say, “I can’t believe what’s happening to you guys. This is crazy.” Some of them have gone on record, and have written testimonials for us under oath saying that our technology is distinct and that they can’t live without it.

When we asked customers to explain to the court why GeoMX is different from other products, why they are not substitutes for each other, and why both [technologies] should remain on the market, more customers wanted to write letters than we had legal capacity for.

That was the most visible outpouring support we have had up until this week. But here at the conference, we have been getting a different kind of outpouring of support, from the pure discovery researchers. So many people have wished us the best and acknowledge the importance of continuing to have multiple different innovators in this field of spatial biology.

From the technical perspective, we pushed the envelope harder than anybody else by far. We are imaging the whole transcriptome. Our full commercial release of the 6,000 plex assay was this week, on February 6. For reference, the most comparable assay on the market is 500 plex. I think that’s one of the reasons why the customers are so frustrated by what’s going on. Because there are groups out there that need 6,000 plex today to answer biological questions that cannot be answered with 500 plex. If they can’t use our instruments, those researchers will have to wait for whoever is left in this space to get to that kind of plex. Those are the people that have been really outpouring to me. They say that if NanoString isn’t doing the high plex work, it will break their entire research program.

The amount of support has surprised me. I knew people would care. But people I barely know were coming up to me last night. The outpouring of support has been just phenomenal.

LeMieux: What does this environment mean for the world of spatial and also for the future of innovation?

Beechem: When three out of the top four companies are under IP attack, you are going to lose at least three-quarters of your innovation. Can you imagine if three-fourths of all the innovation in a field disappeared? That’s what we’re talking about. And the field is just being born. It’s like if you planted a tree, and took away water when it just barely gets out of the ground. Spatial is not even out of the seedling stage. I think this could really hurt the field in a significant way.

We never thought that we could invent everything for the entire world. That is why we invited everybody to our first symposium. We wanted them to succeed at what they were doing. All of the technologies are important and complimentary. I’m just trying to do the best at what we do.

NanoString estimates that the field is less than 5% penetrated, meaning that the companies could all sell 20 times as many systems as they have so far. In that kind of environment, limiting choice and limiting innovation in different directions and different niches does nothing but slow down the entire field’s adoption. It’s not even close to a zero-sum game where the sale of one instrument precludes the sale of another.

The people being harmed by this litigation are the scientists.

LeMieux: It’s very clear that you’re moving forward. But how can the field move forward? And how can the industry move forward if innovation is being squashed at, like you said, an early stage?

Beechem: We are hoping that we can keep it together. We believe in our cause. All of the groups that have generated these spatial technologies put in the blood, sweat, and tears to develop them. And if we look at what happened in the early days of NGS, there was a lot of competition, but in the end, multiple approaches did survive. The people working in long reads, like PacBio, and Oxford Nanopore Technologies, never gave up because they knew their technology was important for the scientific community. They were like a little ant on the wall, and they didn’t give up. And we are so glad that they didn’t give up because we wouldn’t have a lot of the advances that we have now, like T2T chromosome assemblies. They hung on and they won. I really do believe that we, the technology developers for spatial, are going to hang on and win because the scientists will not accept technology that doesn’t answer the questions that they need to answer.

Based on the outpouring and support that we have seen, I believe that our customers are going to stand by us and continue to support us. That is why entering Chapter 11 and protecting them by continuing to be able to supply them with the products they need—while we sort through some of these challenges—was the right move for NanoString.

LeMieux: How is the scientist in you responding to all of this?

Beechem: I am more determined than ever. You could say “uncle,” but that’s just no way to do it. If you are a scientist, there is no way you can say uncle at this early stage, when there is still so much to do. I am going to work five times harder—if that’s possible. I am never going to give up on this.

LeMieux: You have seen your shares of ups and downs. There has been competition in genomics forever. How does this compare for you?

Beechem: The closest you can get are early days of the NGS. And this meeting is where that played out. I remember sitting on the top floors of a hotel room in Marco Island where all of the ABI [Applied Biosystems] people were on the top of one building and all of the Illumina people were on the other side.

[They were] dark days and it was hard early in NGS, but we didn’t have a case where one player was trying to stop everybody at the same time. And that is sort of what we have now. So, what is going on now feels worse than the early days of NGS. Because we are in a situation where one big player is trying really hard, and has the potential, to stifle the whole thing.

I don’t think they are going to succeed. We are not going away. But we need everybody’s help. We are going to get out of this.