NanoString Technologies, Inc. (NASDAQ:NSTG) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.

On August4, 2017, NanoString Technologies, Inc. (the “Company”) entered into a collaboration agreement with Lam Research Corporation (“Lam”) with respect to the Company’s novel DNA and RNA sequencing technology called Hyb & Seq. The collaboration agreement relates to the development and commercialization of the Company’s Hyb & Seq sequencing platform and related assays. The Company will lead the development of the Hyb & Seq product using funding provided by Lam and with engineering support from Lam. The Company will also retain exclusive rights to obtain regulatory approval, manufacture and commercialize the Hyb & Seq product.

to the terms of the collaboration agreement, Lam will provide the Company with up to $50.0 million in funding for the allowable development costs the Company incurs. The development funding is non-refundable, unless the parties determine that completion of development of the product will not occur and development activities are discontinued, in which case any funds advanced to the Company by Lam that have not been committed or spent will be refunded to Lam. The Company has also agreed to reimburse Lam for certain costs incurred by up to ten full-time Lam employees in accordance with the product development plan. Lam is eligible to receive certain royalty payments on net sales by the Company of certain products and technologies developed under the collaboration agreement. The maximum amount of royalties payable to Lam will be capped at an amount equal to (1) $150.0 million multiplied by (2)(a) the amount of development funding provided by Lam divided by (b) $50.0 million.

All intellectual property made or conceived solely by the Company to the collaboration will be owned by the Company and licensed to Lam solely for the purposes of the collaboration. All intellectual property made or conceived solely by Lam to the collaboration will be owned by Lam and, subject to certain restrictions on use with Lam competitors, licensed to the Company for the purposes of the collaboration and further development and commercialization of the Hyb & Seq product, as well as certain other products and technologies resulting from the collaboration in the field of molecular profiling. Jointly created intellectual property shall be jointly owned by the parties, provided that neither party shall use such jointly owned intellectual property in the other party’s competitive field.

The collaboration agreement establishes a joint steering committee to oversee, review and coordinate the parties’ activities under the collaboration agreement and monitor progress and expenditures against the associated development plan. The joint steering committee is comprised of three employees from each of the Company and Lam, and will be chaired by one of the Company’s employees. The Company will have final decision-making authority on the joint steering committee, subject to certain exceptions for decisions regarding development failure, material changes to the development plan, budget, and the Hyb & Seq product being developed under the agreement, and intellectual property ownership, which require consensus of the parties. The collaboration agreement also contains customary representations, warranties, covenants, indemnities and other obligations of the parties.

The term of the collaboration agreement is 15 years. Either the Company or Lam may terminate the collaboration agreement in the case of a material breach by the other party after providing notice and an opportunity to cure or in the case of bankruptcy or insolvency of the other party. The joint steering committee may also terminate the collaboration agreement if development is discontinued in the case of a development failure. Lam may also terminate the collaboration agreement on or after the first anniversary in the event the Company undergoes a change of control.

In connection with the execution of the collaboration agreement, the Company issued Lam a warrant to purchase up to 1.0 million shares of the Company’s common stock on August4, 2017, with the exact number of issuable shares issuable equal to (1) 1.0 million shares multiplied by (2)(a) the amount of development funding provided by Lam divided by (b) $50.0 million. The exercise price of the warrant is $16.75 per share. The warrant will expire on the seventh anniversary of the issuance date. The issuance of the warrant was exempt from registration under the Securities Act of 1933, as amended, under Section 4(a)(2) thereof as a transaction by an issuer not involving a public offering.

In connection with the entry into the collaboration agreement and issuance of the warrant, the Company and Lam have agreed, subject to certain exceptions applicable to Lam, to be bound by certain “standstill” provisions. to the “standstill” provisions, until the third anniversary of the entry into the collaboration agreement, the Company and Lam and their respective officers, directors, employees or contractors acting on their behalf will not (1) acquire, offer to acquire, agree to acquire or publicly propose or offer to acquire, securities, indebtedness, businesses, properties or assets of the other party or any subsidiary or division thereof; (2) initiate, induce or attempt to induce any other person or group to initiate any transaction referred to in clause (1), any stockholder proposal regarding the other party or call hold or convene a stockholders’ meeting of the other party; (3) make or participate in any solicitation of proxies to vote or seek to advise or influence any person with respect to the voting of any voting securities of the other party; (4) make any public announcement with respect to, or submit a proposal or offer for any extraordinary transaction involving the other party or any of its securities or assets; (5) form, join or in any way participate in a group as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, in connection with any of the foregoing prohibited activities; (6) act or seek to control or influence the management, board of directors or policies of the other party; (7) take any action that could reasonably be expected to require the other party to make a public announcement regarding the possibility of any of the prohibited activities described in clauses (1) through (6) or (8) advise, assist or encourage any other person in connection with any of the foregoing prohibited activities.

In addition, Lam has agreed, subject to certain exceptions, not to offer, sell or transfer any of the Company’s common stock or securities convertible into or exchangeable or exercisable for the Company’s common stock, for three years after the entry into the collaboration agreement without first obtaining the Company’s consent, which consent may be withheld by the Company in its sole discretion, unless the collaboration agreement has been terminated, in which case consent may not be unreasonably withheld by the Company.

The foregoing descriptions of the collaboration agreement and warrant are not complete and are qualified in their entirety by reference to the full text of the collaboration agreement and warrant. A copy of the warrant is filed herewith as Exhibit 4.1 to this Current Report on Form 8-K. A copy of the collaboration agreement will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017. On August8, 2017, the Company and Lam issued a joint press release announcing the entry into the collaboration agreement. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 1.01 Unregistered Sales of Equity Securities.

The information set forth under Item 1.01 regarding the Company’s issuance of a warrant to Lam is hereby incorporated by reference into this Item 1.01.

Item 1.01 Financial Statements and Exhibits.

(d) Exhibits.

NanoString Technologies Inc Exhibit
EX-4.1 2 nstg-080817ex41warrant.htm EXHIBIT 4.1 Exhibit Exhibit 4.1THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,…
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About NanoString Technologies, Inc. (NASDAQ:NSTG)

NanoString Technologies, Inc. develops and manufactures intuitive products that unlock scientifically valuable and clinically actionable biologic information from minute amounts of tissue. The Company operates in the segment of development, manufacture and commercialization of instruments, consumables and services for profiling the activity of hundreds of genes and proteins simultaneously from a single tissue sample. Its nCounter Analysis System is an automated, multi-application, digital detection and counting system, which directly profiles hundreds of molecules simultaneously using a barcoding technology. It markets systems and related consumables to researchers in academic, government and biopharmaceutical laboratories for use in understanding fundamental biology, and to clinical laboratories and medical centers for diagnostic use. Its molecular diagnostic product Prosigna Breast Cancer Assay provides an assessment of a patient’s risk of recurrence for breast cancer.