6 December 2019 - - US-based genomic diagnostics company Veracyte (NASDAQ: VCYT) has executed a definitive agreement with NanoString for the exclusive global license to the nCounter platform for diagnostic use, the company said.

The strategic transaction positions Veracyte to expand its genomic diagnostics business globally, with the ability to deliver its advanced genomic tests to physicians and their patients via hospital and clinical laboratories throughout the European Union and other parts of the world.

Veracyte believes that the transaction will ultimately enable it to access a global market worth more than USD 40bn for its current and pipeline products, while expanding its margins through test menu expansion on the nCounter platform.

The elegantly designed, FDA-cleared, automated nCounter system is expected to enable broad testing utility through its ability to simultaneously analyze RNA, DNA or protein targets in up to 800 genes.

Veracyte expects to begin offering its Envisia classifier, for use in idiopathic pulmonary fibrosis diagnosis, to international customers in 2021 as a kit-based test that runs on the nCounter system.

The company expects its in-development nasal swab classifier, for use in lung cancer diagnosis, to follow on the nCounter system in 2022, after the test becomes available in Veracyte's CLIA laboratory in the United States in early 2021.

The nCounter system can also run additional genomic tests developed by Veracyte, as well as by potential diagnostics or biopharmaceutical partners seeking access to global markets.

As part of the transaction, Veracyte has also acquired the NanoString Prosigna breast cancer prognostic test and in-development LymphMark lymphoma subtyping assay, further expanding the company's oncology portfolio.

Veracyte has agreed to pay NanoString USD40 m in cash and USD10 m in Veracyte common stock, and up to an additional USD 10m in cash contingent upon the commercial launch of Veracyte diagnostic tests for use on the platform.

Veracyte expects to realise a modest revenue contribution through the transaction of USD6 m to USD8 m in 2020, with a neutral impact to cash flow from the current business.