Translation: Original comment published in Finnish on 4/17/2024 at 7:17 am EEST.

In announcing the decision to open the laboratory, the company also announced a letter of intent with Weill Cornell Medicine. The aim of the collaboration is to bring Nightingale's blood analysis technology to healthcare in the United States. The release continues the positive news flow about the progress of Nightingale's commercial strategy and shows that the company's growth prospects in the US are improving. On the other hand, as this is still a letter of intent, its impact on the company's business growth will presumably only become apparent in the coming years.

New laboratory complements Nightingale's global laboratory network

Nightingale already has its own laboratories in Finland, Singapore, the UK, and Japan. We also understand that the company still has a collaborative laboratory with its investor PerkinElmer in Pittsburgh, USA. The press release did not comment on this, but we believe that the reported laboratory opening is a potential replacement solution in the US. The PerkinElmer partnership (originally announced in 2018) has not been much publicized recently, so we think its role has been rather limited from Nightingale's perspective lately.

The exact location and opening date of the new laboratory will be announced later, but we expect it to happen within 12 months. The location will most likely be on the East Coast, where all of the company's recent partnerships have operations (Weill Cornell Medicine/New York, Mass General Brigham/Boston, Kaiser Permanente/Georgia). In our view, Nightingale's launch of its own laboratory indicates good demand in the research segment and supports the company's efforts to make its blood analysis technology available to the US healthcare sector.

Interesting new partnership in the US, regulatory approvals must be resolved before clinical use is possible

At the announcement of the new laboratory, the Englander Institute for Precision Medicine at Weill Cornell Medicine was revealed as its first client. It is an institute for personalized medicine that aims to translate medical research findings into clinical practice and has operations in the US (New York) as well as in Qatar. The collaboration aims to integrate Nightingale's blood analysis technology and disease risk assessment capabilities into the institute's research and clinical services. The applications can be based on risk prediction models or measurements of biomarker counts in blood samples, which can replace existing routine clinical measures. The collaboration is Nightingale’s first in the US to have a very explicit partner’s ambition to bring the technology to clinical use. The collaboration is naturally interesting from this perspective, even though it is a letter of intent and, if successful, will take a few years to start clinical use.

For clinical use, Nightingale still needs to obtain the necessary regulatory approvals in the US. With its own laboratory, the company could also be in a better position to do so than with the previous partner laboratory. Nightingale has been working towards FDA approval (510k), although this has already been significantly delayed from previous targets (originally by 6/30/22). According to the company, this is due to backlogged approval processes. It is our understanding that the company could also carry out the approval on its own through the Laboratory Developed Test route, where the company itself validates the accuracy of the tests produced in its laboratory. Nightingale has so far been able to obtain the necessary approvals for clinical use in its other markets, so we believe the risks are related to the timescale and cost of obtaining approvals rather than their actual completion.