"I am proud to be leading Nanosphere as we enter a new phase of our growth focused on customer-facing commercialization," Mr. McGarrity said. "I believe that the best ideas come from collaboration with our customers. We will continue to tap this resource through our commercial and marketing organization for confirmation that we are on the right path of applying our proprietary capabilities in clinically actionable ways. We are committed to market-driven execution and quality. This commitment is backed by the most talented and dedicated employees in the industry, and we look forward to creating value for our shareholders."
Board Member Changes; Commitment of Lurie Investments
The Company also announced the appointments of Sheli Z. Rosenberg, Michael J. Ward and Michael K. McGarrity to its board of directors, filling positions formerly held by Mark E. Slezak, Roy N. Davis, William T. White III and William P. Moffitt, all of whom resigned as directors. Ms. Rosenberg was appointed Chair of the board of directors and previously served on the Nanosphere board from 2002 to 2012. Ms. Rosenberg is Of Counsel at Skadden, Arps, Slate, Meagher & Flom LLP and is the former president, chief executive officer and vice chairman of Equity Group Investments. Mr. Ward is currently a Director at Lurie Investments responsible for managing investment activities. Prior to joining Lurie Investments in 2009, he gained over 15 years of investment banking experience at Credit Suisse, Prudential Securities, Dresdner Kleinwort Wasserstein, BMO and Leerink Swann. As an investment banker, Mr. Ward was primarily focused on M&A and financing transactions for life sciences companies.
Also, Lurie Investments together with its affiliates has executed a twelve-month voluntary lock-up agreement with Nanosphere, indicating its intent to hold its position and realize the value it believes exists within the Company. Lurie Investments and its affiliates hold approximately 14.7 million shares of common stock, representing approximately 26% ownership of the Company.
"On behalf of the Board, I want to thank Bill Moffitt for his years of valuable service in helping to make Nanosphere a leader in advanced molecular diagnostics," said Ms. Rosenberg. "We are confident in Mike McGarrity's ability to lead as Nanosphere enters the commercialization stage. We are pleased with the early signs of growth and excited about the opportunity to create significant shareholder value as we make additional progress toward the broad adoption of Nanosphere's technology as the industry-leading platform in advanced molecular diagnostics. We also appreciate the commitment of Lurie Investments to the success of Nanosphere," she continued.
Fourth quarter customer placements of 56 represents continued acceleration of new customer growth in the U.S. Nanosphere management, during the last quarterly conference call, provided guidance around the low end of the previously disclosed range of 60 to 80 placements for the fourth quarter of 2012. Disappointing demand in Europe resulted in total placements that were lower than expected for the quarter.
Costs and operating expenses were $38.0 million in 2012, remaining flat relative to 2011. Costs of sales increased from $1.8 million in 2011 to $3.5 million in 2012, driven by increased volume. Selling, general and administrative expenses in 2012 increased to $16.9 million from $16.2 million as field sales and customer support teams were expanded. Research and development expenses decreased from $20.0 million in 2011 to $17.6 million in 2012 as a result of a shift in resources from development to manufacturing and customer support as commercialization accelerated.
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