Launching a New Platform: GeoMx Digital Spatial Profiler

Executive summary

When I joined NanoString in July 2017, GeoMx Digital Spatial Profiler was a set of prototype instruments in a Seattle lab. It was the company's first new instrument platform since nCounter, built for a field that was only starting to form: spatial biology. Spatial biology keeps the tissue section intact, so a researcher can choose specific regions, such as the edge of a tumor or the immune cells around it, and measure what is active in each one.

The question was how to sell an expensive instrument in a new category with no reference sites, so we sold the data first. Customers paid to run their samples on the prototypes, and in the second half of 2018 we opened pre-orders. By year end the pre-order program, designed for the first 20 buyers, had more than 30 instruments ordered, and about 70% came from customers who had not used the testing service and ordered without seeing the instrument.

GeoMx launched in April 2019. By the end of 2021, my last full year, GeoMx revenue had grown to $51.9 million, 36% of product and service revenue, with about 255 systems installed, and it beat initial guidance in each of its first 3 years. The launch worked because each step produced customer data or orders before the next step required more spending, and because it was sold first to customers the company already knew.

1. How the launch was sequenced

The launch ran in 6 steps, and each one produced customer data or orders before the next step required more spending:

• Paid sample testing, from late 2017. Through the Technology Access Program, customers sent tissue samples to Seattle for a fee and received the data. It reached about 40 projects by May 2018, and in October 2018 two groups, at MD Anderson and the Netherlands Cancer Institute, published GeoMx studies in Nature Medicine.
• Early access and beta, from Q3 2018. Demand exceeded the beta systems available. The first beta system shipped in Q4 2018, 7 were installed by March 2019, and 3 research centers were named GeoMx Centers of Excellence.
• Pre-orders, from Q3 2018. The Priority Site program was designed for the first 20 buyers and was over-subscribed, with more than 30 pre-orders by the end of 2018 and more than 40 by March 2019. About 25% of pre-orders also brought in a new nCounter system.
• Technical sales specialists, from 2018. The nCounter instrument reps owned the relationship and qualified GeoMx opportunities, then brought in a specialist for the scientific case. By Q3 2019 there were about 40 instrument reps and about 10 GeoMx specialists.
• Commercial launch, April 2019. GeoMx launched at AACR with RNA and protein panels read out on nCounter. The roughly 760 nCounter sites were the first target list.
• First shipments, second half of 2019. 10 systems shipped in Q3 and 34 in Q4. Cumulative orders passed 90 by year end, and FY2019 GeoMx revenue was $10.8 million against initial guidance of $6 to $8 million.

2. Widening the market, 2020 to 2021

• Sequencer read-out opened the discovery market. In August 2020 GeoMx added read-out on Illumina sequencers, followed in 2021 by the Whole Transcriptome Atlas. Customers no longer needed an nCounter, opening GeoMx to nearly 20,000 installed sequencers.
• Orders, use and publications rose together. Orders doubled in 2020, the installed base roughly doubled in 2021, and published studies went from 12 to about 90.
• The next platform was sold to the same customers. CosMx, announced in December 2020, took 20 orders from GeoMx customers by the end of 2021.

3. Results, FY2018 to FY2021

GeoMx grew 223% in its first full year and 49% in its second. From FY2020 to FY2021 instrument revenue grew 18% and consumables revenue grew 223%. Consumables per system reached about $109,000 annualized in Q4 2021, about 2x the nCounter figure on the same basis.

4. Predictability: GeoMx revenue against guidance

Beating guidance and forecasting accurately are different measures, and both matter. FY2020 and FY2021 landed 7% and 9% above the midpoint, the range in which a forecast can be relied on. In FY2020, COVID-19 left total product and service revenue at 87% of guidance, while GeoMx reached 107%, delivered against an order book of more than 90 systems.

5. Lessons for a company launching a second platform

In order of impact, these are the steps I would take first when a company launches a new platform alongside an established one:

1. Sell the data before the instrument. Paid testing gives buyers results before they commit capital and gives the sales team a list of qualified buyers.
2. Take orders before you ship. A pre-order program sized for a small first group shows real demand and funds the first builds.
3. Launch to the existing installed base first. Customers who already own and trust the first platform buy faster and need less support.
4. Add specialists alongside the existing reps. Keep the core team focused on its business, and give the new product the scientific expertise it needs.
5. Widen the market with the product, then with coverage. A product change, such as a new read-out, can open a larger market than added sales headcount.
6. Forecast instruments and consumables separately from day one. Track consumables per system by purchase year, so a buyer can see how use develops.