UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934

Filed by the Registrant  [X]

Filed by a Party other than the Registrant  [   ]

Check the appropriate box:

NANOSPHERE, INC.

4088 Commercial Avenue

Northbrook, Illinois 60062

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To be held May 30, 2012

To the Stockholders of Nanosphere, Inc.:

The board of directors cordially invites you to attend our annual meeting of stockholders on May 30, 2012, at 9:00 a.m. Central Daylight Time (the “Annual Meeting”) at The Westin Chicago North Shore, 601 North Milwaukee Avenue, Wheeling, IL 60090 for the following purposes:

Only stockholders of record at the close of business on April 17, 2012 will be entitled to notice of the Annual Meeting and to vote on any matters which come before the meeting or any adjournment or postponement thereof. If you wish to attend the Annual Meeting in person, please bring with you the admission ticket attached to the proxy card or other proof of your share ownership as of the record date (examples of acceptable evidence of share ownership are described in the attached proxy statement). Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented. To ensure that your vote is counted, you are urged to vote by proxy via mail, telephone or the internet as described on the enclosed proxy card. Proxies or voting cards delivered to you by or for brokers or fiduciaries should be returned as requested by them. Prompt return of proxies will save the expense involved in further communication. Voting by mail, telephone or internet will not limit your right to vote in person or to attend the Annual Meeting, but will ensure your representation if you cannot attend. Your proxy is revocable at any time prior to its use.

April 30, 2012

Northbrook, Illinois

NANOSPHERE, INC.

PROXY STATEMENT

FOR THE ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD MAY 30, 2012

The board of directors of Nanosphere, Inc., a Delaware corporation (“Nanosphere,” “we,” “us,” “our” or the “Company”), hereby solicits your proxy for use at the 2012 annual meeting of stockholders to be held on May 30, 2012, at 9:00 a.m. Central Daylight Time (the “Annual Meeting”) at The Westin Chicago North Shore, 601 North Milwaukee Avenue, Wheeling, IL 60090, and at any adjournment or postponement thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. This proxy statement, notice and proxy card are first being mailed to stockholders of record as of April 17, 2012 on or about April 30, 2012.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on May 30, 2012: This Proxy Statement and the Company’s 2011 Annual Report to Stockholders are available online at http://phx.corporate-ir.net/phoenix.zhtml?c=214748&p=irol-reportsannual.

If you complete your proxy by mail, telephone or internet, you appoint William P. Moffitt, III and J. Roger Moody, Jr., or either of them, as your lawful attorneys-in-fact and your proxies, with full power of substitution, at the Annual Meeting and any adjournment(s) or postponement(s) thereof, with all powers that you would possess if personally present at the Annual Meeting. Your proxies will vote your shares as you instruct. If you sign and return your proxy, but fail to instruct how to vote your shares, Mr. Moffitt or Mr. Moody will vote your shares in favor of the slate of directors nominated by the board of directors (Proposal No. 1), “for” the approval of the compensation of our named executive officers (Proposal No. 2) and “for” the ratification of Deloitte & Touche LLP as our independent registered public accounting firm (Proposal No. 3). This way your shares will be voted whether or not you attend. We recommend that you vote by proxy in advance of the Annual Meeting even if you plan to attend just in case your plans change and you are unable to attend. If you are the beneficial owner of your shares that are held in street name, you must provide your broker with a properly executed proxy card and voting instructions in order for your shares to be voted in connection with Proposal Nos. 1 and 2.

The board does not know of any matters to be presented at the Annual Meeting other than those listed on the notice and described in this proxy statement. If a matter comes up for vote that is not covered by your proxy, your proxies will vote your shares in accordance with their judgment if you have completed your proxy card and authorized them to do so.

The board encourages you to attend the Annual Meeting in person. No matter what method you use to vote, if you decide to change your vote, you may revoke your proxy any time before your vote is cast at the annual meeting by (i) giving written notice

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of revocation to the Secretary of Nanosphere; (ii) if you voted by telephone or internet, by submitting a new vote by telephone or internet (your latest telephone or internet vote is counted); (iii)submitting a signed proxy bearing a date later than the date of the prior proxy; or (iv)attending the Annual Meeting and voting in person. Attendance at the Annual Meeting will not, in itself, constitute revocation of your proxy.

Our principal executive offices are located at 4088 Commercial Avenue, Northbrook, Illinois 60062, and our telephone number is (847) 400-9000.

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PURPOSE OF THE MEETING

At our Annual Meeting, stockholders will be asked to consider and vote upon the following matters:

INFORMATION ABOUT THE ANNUAL MEETING

Who is entitled to vote?

The record date for the Annual Meeting is April 17, 2012. Only stockholders of record at the close of business on that date are entitled to vote at the Annual Meeting. For more information, see the description of shares eligible to vote under the heading “Voting Rights of Common Stockholders” below.

Am I entitled to vote if my shares are held in “street name”?

Yes, if a bank or brokerage firm holds your shares in street name for you, you are considered the “beneficial owner” of the shares. If your shares are held in street name, these proxy materials are being forwarded to you by your bank or brokerage firm (the “record holder”), along with a voting instruction card. As the beneficial owner, you have the right to direct the record holder how to vote your shares, and the record holder is required to vote your shares in accordance with your instructions.

What if I do not give my bank or brokerage firm voting instructions for my shares held in “street name”?

If you do not give instructions to your bank or brokerage firm, it will nevertheless be entitled to vote your shares in its discretion on “routine matters.” For purposes of this annual meeting, the Company has determined that the ratification of the appointment of its independent auditors (Proposal 3) is a routine matter. However, absent your instructions, the record holder will not be permitted to vote your shares on a non-routine

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matter, which are referred to as “broker non-votes,” properly brought before the meeting. Broker non-votes (shares held by brokers that do not have discretionary authority to vote on the matter and have not received voting instructions from their clients) are not counted or deemed to be present or represented for the purpose of determining whether stockholders have approved that proposal. The Company has determined that the election of directors at the Annual Meeting (Proposal No. 1) and the advisory vote to approve executive compensation (Proposal No. 2) are non-routine matters. Accordingly, you must provide voting instructions to your broker in accordance with the voting instruction card that you will receive from your broker in order for your shares to be voted with respect to Proposal Nos. 1 or 2.

May I attend the annual meeting if I hold my shares in “street name”?

As the beneficial owner of shares, you are invited to attend the Annual Meeting. If you are not a record holder, however, you may not attend the meeting or vote your shares in person at the meeting unless you obtain a proxy, executed in your favor, from the record holder of your shares. See “Who can attend the meeting?” below.

How many shares must be present to hold the meeting?

A quorum must be present at the meeting for any business to be conducted at the Annual Meeting. At any meeting of stockholders, the holders of a majority in voting power of all issued and outstanding stock entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business. Proxies received but marked as abstentions or treated as broker non-votes will be included in the calculation of the number of shares considered to be present at the meeting for quorum purposes.

What if a quorum is not present at the meeting?

If a quorum is not present or represented at the Annual Meeting, then the Chairman of the meeting or the holders of a majority in voting power of the stock entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. If a quorum initially is present at the Annual Meeting, the stockholders may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum, but if a quorum is not present at least initially, no business other than adjournment may be transacted.

The time and place of the adjourned meeting will be announced at the time the adjournment is taken, and no other notice may be given.

How do I vote if I am a registered stockholder?

1. You may vote by mail. If you are a registered stockholder (that is, if you hold your stock directly and not in street name), you may vote by mail by completing, signing and dating the accompanying proxy card and returning it in the enclosed postage

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prepaid envelope. Your proxy will then be voted at the annual meeting in accordance with your instructions.

2. You may vote in person at the meeting. If you are a registered stockholder and attend the meeting (please remember to bring your admission ticket or other acceptable evidence of stock ownership as of the record date), you may deliver your completed proxy card in person.

How do I vote if I hold my shares in “street name”?

If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a voting card and voting instructions with these proxy materials from that organization rather than from Nanosphere. Your bank or broker may permit you to vote your shares electronically by telephone or on the internet. A large number of banks and brokerage firms participate in programs that offer telephone and Internet voting options. If your shares are held in an account at a bank or brokerage firm that participates in such a program, you may vote those shares electronically by telephone or on the Internet by following the instructions set forth on the voting form provided to you by your bank or brokerage firm.

These Internet and telephone voting procedures, which comply with Delaware law, are designed to authenticate stockholders’ identities, allow stockholders to vote their shares and confirm that stockholders’ votes have been recorded properly. Stockholders voting via either telephone or the Internet should understand that there may be costs associated with electronic access, such as usage charges from Internet access providers and telephone companies that must be borne by the stockholder using such services. Also, please be aware that Nanosphere is not involved in the operation of these voting procedures and cannot take responsibility for any access, Internet or telephone service interruptions that may occur or any inaccuracies, erroneous or incomplete information that may appear.

Who can attend the meeting?

Only stockholders eligible to vote or their authorized representatives will be admitted to the Annual Meeting. If you are a stockholder of record and plan to attend the Annual Meeting, you must detach and bring with you the stub portion of your proxy card, which is marked “Admission Ticket.” You must also bring a valid government-issued photo identification, such as a driver’s license or a passport.

If your shares are held in street name and you wish to attend the meeting and/or vote in person, you must bring your broker or bank voter instruction card and a proxy, executed in your favor, from your broker or bank. In addition, you must bring valid government-issued photo identification, such as a driver’s license or a passport.

Security measures will be in place at the meeting and briefcases, handbags and packages are subject to inspection. No cameras or recording devices of any kind, or signs, placards, banners or similar materials, may be brought into the meeting. Anyone

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who refuses to comply with these requirements will not be admitted or, if admitted, will be required to leave.

Can I change my vote after I submit my proxy?

Yes, you may revoke your proxy and change your vote any time before your vote is cast at the meeting:

Who will count the votes?

Our transfer agent, American Stock Transfer & Trust Company, will tabulate and certify the votes. A representative of the transfer agent will serve as the inspector of election.

How does the board of directors recommend that I vote on the proposals?

The board recommends that you vote:

What if I do not specify how my shares are to be voted?

If you submit a proxy but do not indicate any voting instructions, your shares will be voted:

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Will any other business be conducted at the meeting?

We are not aware of any other business that will be presented at the meeting. If any other matter properly comes before the stockholders for a vote at the meeting, however, your proxy (one of the individuals named on your proxy card) will vote your shares in accordance with his best judgment if you so authorize.

How many votes are required to elect the director nominees (Proposal No. 1)?

At all meetings of stockholders for the election of directors at which a quorum is present, a plurality of the votes cast shall be sufficient to elect each such director standing for election. This means that the six nominees will be elected if they receive more affirmative votes than any other person. If you vote “Withheld” with respect to one or more nominees, your shares will not be voted with respect to the person or persons indicated, although they will be counted for purposes of determining whether there is a quorum.

What happens if a nominee is unable to stand for election?

If a nominee is unable to stand for election, the board of directors may either reduce the number of directors to be elected or select a substitute nominee. If a substitute nominee is selected, the proxy holder will vote your shares for the substitute nominee, unless you have withheld authority.

How many votes are required to approve, on an advisory basis, the compensation of our named executive officers (Proposal No. 2)?

Proposal No. 2 requires the affirmative vote of the holders of a majority in voting power of the stock present in person or represented by proxy and entitled to vote on the subject matter to approve, on an advisory basis, the compensation of our named executive officers.

How many votes are required to approve the ratification of the appointment of Deloitte & Touche LLP as Nanosphere’s independent registered public accounting firm (Proposal 3)?

Proposal No. 3 requires the affirmative vote of the holders of a majority in voting power of the stock present in person or represented by proxy and entitled to vote on the subject matter to approve the ratification of the appointment of Deloitte & Touche LLP as Nanosphere’s independent registered public accounting firm.

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How will abstentions and broker non-votes be treated?

Shares voting “abstain” have no effect on the outcome of and of the matters covered by Proposal Nos. 1 and 2. For the ratification of the appointment of our independent registered public accounting firm (Proposal 3), abstentions are treated as shares present or represented and voting, so abstaining has the same effect as a negative vote. Broker non-votes will be treated as shares present for quorum purposes, but not entitled to vote.

VOTING RIGHTS OF COMMON STOCKHOLDERS

The board has fixed the close of business on April 17, 2012 as the record date for determination of stockholders entitled to notice of and to vote at the Annual Meeting. Holders of record of our common stock, $0.01 par value (the “Common Stock”) at the close of business on the record date will be entitled to vote together as a single class on all matters that come before the Annual Meeting. At the close of business on the record date, there were issued and outstanding 44,040,437 shares of Common Stock (representing 44,040,437 votes), each of which is entitled to vote at the Annual Meeting.

The presence, in person or represented by proxy, of the holders of a majority of the outstanding shares of Common Stock, as a single class, represented in person or by proxy, constitutes a quorum for the transaction of business at the Annual Meeting.

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PROPOSAL 1

ELECTION OF DIRECTORS

Information about the Nominees

Your vote is requested in favor of six directors to serve until the next annual meeting of stockholders and until their successors are elected and qualified or their earlier resignation, removal, disqualification or death. The board, pursuant to the recommendation of the Company’s corporate governance and nominating committee, has selected the six persons listed below as nominees. The table below sets forth the names and principal occupation of each of the nominees. A summary of the background and experience of each of these individuals is set forth after the table.

Mark Slezak. Mr. Slezak has served as Chairman of our board of directors since 2000. Mr. Slezak is the chief executive officer of Lurie Investments, Inc. and served as a director of Lurie Investments, Inc. until January 2012. As such, Mr. Slezak oversees financial activities as (i) a trustee of AOQ Trust, (ii) a managing member of Eagle Capital Management, LLC, which is the managing member of Alfa-Tech, LLC, (iii) the investment manager of LFT Partnership, (iv) vice president and a director of the Ann and Robert H. Lurie Foundation, (v) the managing member of WASK Investments, LLC and (vi) the managing member of Anda-Proquest, LLC. Lurie Investments, Inc. and Eagle Capital Management, LLC are both managing members of Lurie Investment Fund, LLC. These entities are deemed to be affiliates of the Company. He is chairman of the board at NanoInk and a member of the board of directors at Ardesta, LLC, Joint Juice, Inc. and numerous other private companies and foundations. From 1979 to 1996, Mr. Slezak has held various accounting and financial positions with Arthur Rubloff & Company and Equity Group Investments, Inc. Mr. Slezak is a managing member of several investment funds investing in venture and public markets. He holds a B.S./B.A. degree from Roosevelt University in Chicago, Illinois. Based on Mr. Slezak’s familiarity with the Company as a long-standing member of its Board of Directors and his vast investment, operations, financial and governance experience with emerging and public companies,

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the Corporate Governance and Nominating Committee of the Board of Directors concluded that Mr. Slezak has the requisite experience, qualifications, attributes and skill necessary to serve as a member of the Board of Directors.

William P. Moffitt, III. Mr. Moffitt became President and Chief Executive Officer of Nanosphere in 2004, and serves on the board of directors. Mr. Moffitt has over 30 years of experience in the diagnostics and medical device industry, and has spent the last 20 years developing novel technologies into products and solutions that have helped shape the industry. Prior to joining Nanosphere, he served as president and chief executive officer of i-STAT Corporation, a developer, manufacturer and marketer of diagnostic products in the point-of-care blood analysis market. Mr. Moffitt led i-STAT from its early stage to commercialization and its initial public offering in 1992 to its acquisition by Abbott Laboratories in 2003. Prior to i-STAT, Mr. Moffitt held increasingly responsible executive positions from 1973 through 1989 with Baxter Healthcare Corporation, a manufacturer and distributor of healthcare products, and American Hospital Supply Corporation, a diversified manufacturer and distributor of healthcare products, which Baxter acquired in 1985. Mr. Moffitt earned a B.S. in zoology from Duke University. Based on Mr. Moffitt’s extensive industry experience and proven track record in leading the growth of diagnostics companies from development stage through market leadership, as well as the Company-specific knowledge and strategic perspective possessed by Mr. Moffitt as its Chief Executive Officer, the Corporate Governance and Nominating Committee of the Board of Directors concluded that Mr. Moffitt has the requisite experience, qualifications, attributes and skill necessary to serve as a member of the Board of Directors.

André de Bruin. Mr. de Bruin has served as member of our board of directors since 2005. Mr. de Bruin has more than 35 years of global healthcare industry experience spanning the bio-pharmaceutical, medical device and diagnostics markets. Most recently, Mr. de Bruin was the founder and chief executive officer of DuraPorts Inc., a manufacturer of steel and fabric structures. He also serves on the board of Directors of NxThera Inc., a medical device company based in St. Paul, MN, where he is Chairman of the Board. Prior to his retirement in 2004 as executive chairman of Quidel Corporation’s board of directors, Mr. de Bruin served as the company’s chief executive officer from 1998 until 2001. He was president and chief executive officer of Somatogen and was elected chairman in 1996. Prior to joining Somatogen, Mr. de Bruin was chairman, president and chief executive officer of Boehringer Mannheim Corporation, a global healthcare concern subsequently acquired by Hoffman-La Roche. Past experience includes advisory services for Ferrer, Freeman and Company, LLC and various boards of directors. Mr. de Bruin graduated from the University of Potchefstroom in South Africa, where he earned a B.S. in finance, economics and business. Based on Mr. de Bruin’s extensive experience in the bio-pharmaceutical, medical device and diagnostics industry as both a director and executive officer, the Corporate Governance and Nominating Committee of the Board of Directors concluded that Mr. de Bruin has the requisite experience, qualifications, attributes and skill necessary to serve as a member of the Board of Directors.

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Chad A. Mirkin, Ph.D. Dr. Mirkin, one of our co-founders, has served as a member of our board of directors since 2000. Dr. Mirkin is a scientist and pioneer in the development of ultra-high sensitivity and selectivity assays based upon nanostructures. He is currently the director of the Northwestern University International Institute for Nanotechnology and the George B. Rathmann Professor of Chemistry, Professor of Medicine, and Professor of Materials Science and Engineering. Dr.Mirkin received his undergraduate training at Dickinson College (B.S., 1986) and his graduate training at the Pennsylvania State University, where he completed his Ph.D. in chemistry in 1989. That same year, he moved to MIT as a National Science Foundation Postdoctoral Fellow. Dr. Mirkin joined the faculty at Northwestern University in 1991. He has won over 60 national and international awards for his research, including the ACS Nobel Signature Award, the NIH Director’s Pioneer Award, the Feynman Prize, the Leo Hendrik Baekeland Award, the ACS Award in Pure Chemistry, the Sackler Prize, the E. Bright Wilson Prize, and the Lemelson-MIT Prize. He is a member of the National Academy of Sciences, Institute of Medicine, and National Academy of Engineering. Based on Dr. Mirkin’s familiarity with the Company as a long-standing member of its Board of Directors and his significant scientific knowledge and expertise in molecular diagnostics and especially in the application of nanotechnology to the development of medical diagnostic products, the Corporate Governance and Nominating Committee of the Board of Directors concluded that Dr. Mirkin has the requisite experience, qualifications, attributes and skill necessary to serve as a member of the Board of Directors.

Lorin J. Randall. Mr. Randall has served as a member of our board of directors and the chairman of the audit committee since 2008. Mr. Randall is a financial consultant and also serves on the boards of the following healthcare companies: Tengion, Inc., Athersys, Inc. and Acorda Therapeutics, Inc. Mr. Randall previously served as senior vice president-chief financial officer of Eximias Pharmaceutical Corporation, a development stage provider of oncology therapeutics. Mr. Randall held the same position at i-STAT Corporation, a manufacturer of medical diagnostic devices, which was acquired by Abbott Laboratories in 2004. His career also includes senior management positions at CFM Technologies, a semiconductor manufacturing equipment company; Greenwich Pharmaceutical Corporation, a development stage provider of immune system disease therapeutics; and Surgilase, a provider of surgical lasers to hospitals and clinics. Mr. Randall received a B.S. in accounting from The Pennsylvania State University and an M.B.A. from Northeastern University. Based on Mr. Randall’s background as a financial consultant, executive and director at diagnostic and other healthcare companies, as well as his expertise in finance, accounting, internal controls and enterprise risk, the Corporate Governance and Nominating Committee of the Board of Directors concluded that Mr. Randall has the requisite experience, qualifications, attributes and skill necessary to serve as a member of the Board of Directors.

William T. White III. Mr. White has served as executive vice president of Lurie Investments since 2002. Since joining Lurie Investments in 2000, Mr. White has been responsible for managing the investments of the Ann and Robert H. Lurie Family of Chicago, including its portfolio of Life Sciences and Technology investments. Prior to joining Lurie Investments, Mr. White was Managing Director of Corporate Investments at Equity Group Investments, LLC, where he was responsible for a portfolio of

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companies in a variety of industries. While at Equity Group, he also managed the organization’s financing activities, including its relationships with investment banks and other financial institutions. He was also previously the Vice President of Corporate Banking at Manufacturers Hanover. Mr. White is a director of Aperion Biologics Inc., Cernium, Inc. CytoPherx, Inc., Discera, Inc., Impact Health, Inc., Joint Juice, Inc., NanoInk, Inc., and Viamet Pharmaceuticals, Inc., all of which are privately held companies. He holds an A.B. degree from Dartmouth College. Based on Mr. White’s familiarity with the Company as a long-standing executive officer of Lurie Investments and his significant investment and operations experience, the Corporate Governance and Nominating Committee of the Board of Directors concluded that Mr. White has the requisite experience, qualifications, attributes and skill necessary to serve as a member of the Board of Directors.

Each of the above nominees has indicated a willingness to serve. Should any nominee become unavailable prior to the Annual Meeting, your proxy will vote your shares for the person or persons recommended by the board to the extent you authorize. If you sign and return your proxy (whether by mail, telephone or internet) your shares will be voted for the director slate nominated by the board except to the extent that you withhold authority for any nominee(s). The affirmative vote of a plurality of the shares present in person or represented by proxy at the meeting and entitled to vote is required to elect the six nominees as directors.

THE BOARD UNANIMOUSLY RECOMMENDS THAT

YOU VOTE IN FAVOR OF THE ABOVE NOMINEES FOR

THE BOARD OF DIRECTORS.

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Board of Directors; Committees

During the fiscal year ended December 31, 2011 (“Fiscal Year 2011”), the board of directors held a total of seven in-person or telephonic board meetings and took action by unanimous written consent on one occasion. All of our director nominees have agreed, if elected at the Annual Meeting, to serve from the Annual Meeting until the next annual meeting of stockholders in 2013 and until their successors have been duly elected and qualified or their earlier resignation, removal, disqualification or death. There are no arrangements between any director or executive officer and any other person pursuant to which the director or officer is to be selected as such. There is no family relationship between the directors, executive officers or persons nominated or appointed by the board to become directors or executive officers. Current directors Mark Slezak, Jeffrey R. Crisan, André de Bruin, Lorin J. Randall and Sheli Z. Rosenberg, and director nominee William T. White III, are “independent” in accordance with the rules of the NASDAQ Global Market.

Each director attended at least 75% of the aggregate of the total number of meetings of the board of directors and the total number of meetings of all committees of the board of directors on which he or she served for Fiscal Year 2011, except for André de Bruin who attended 71% of the aggregate of the total number of such meetings.

The board of directors has an Audit Committee, a Compensation Committee and a Corporate Governance and Nominating Committee. The function, composition, and number of meetings of each of these committees are described below.

Audit Committee

André de Bruin, Lorin J. Randall and Sheli Z. Rosenberg currently serve on our Audit Committee. Mr. Randall is the chairman of our Audit Committee. The Audit Committee’s responsibilities include, but are not limited to:

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questionable accounting, internal control, financial disclosure or auditing related complaints and concerns; and

Our board of directors has determined that Mr. Randall qualifies as an “audit committee financial expert” as defined under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the applicable rules of the NASDAQ Global Market. The board has determined that each of Mr. de Bruin, Mr. Randall and Ms. Rosenberg is “independent” pursuant to Rule 10A-3 of the Exchange Act. We believe that the composition of our Audit Committee meets the requirements for independence and financial sophistication under the current requirements of the NASDAQ Global Market and SEC rules and regulations. The Audit Committee held a total of five meetings and took no actions by written unanimous consent, during Fiscal Year 2011. Our Audit Committee’s charter can be found on our website at http://www.nanosphere.us in the “Investor Relations/Media” section under the heading “Corporate Governance.” Any amendments to this charter will be posted to the website promptly upon adoption by the Audit Committee.

Compensation Committee

Mark Slezak, André de Bruin and Jeffrey R. Crisan currently serve on the Compensation Committee. Mr. Slezak is the chairman of our Compensation Committee. We believe that the composition of our Compensation Committee meets the requirements for independence under the current requirements of the NASDAQ Global Market, the requirements for non-employee directors under the Exchange Act, and the requirements for outside directors under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).

The Compensation Committee’s responsibilities include, but are not limited to:

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The Compensation Committee held a total of three meetings and took no actions by written consent, during Fiscal Year 2011. Our Compensation Committee’s charter can be found on our website at http://www.nanosphere.us in the “Investor Relations/Media” section under the heading “Corporate Governance.” Any amendments to this charter will be posted to the website promptly upon adoption by the Compensation Committee.

Corporate Governance and Nominating Committee

Sheli Z. Rosenberg, Mark Slezak and Jeffrey R. Crisan serve on the Corporate Governance and Nominating Committee. Ms. Rosenberg is the chairman of our Corporate Governance and Nominating Committee. We believe that the composition of our Corporate Governance and Nominating Committee meets the requirements for independence under the current requirements of the NASDAQ Global Market.

The Corporate Governance and Nominating Committee’s responsibilities include, but are not limited to:

The Corporate Governance and Nominating Committee will consider recommendations for director candidates submitted in good faith by stockholders. A stockholder recommending an individual for consideration by the Corporate Governance and Nominating Committee must provide (i)evidence of ownership of shares of the Company’s Common Stock, (ii)the written consent of the candidate(s) for nomination as a director, (iii)a resume or other written statement of the qualifications of the candidate(s) and (iv)all information regarding the candidate(s) that would be required to be disclosed in a proxy statement filed with the SEC if the candidate(s) were nominated for election to the board, including, without limitation, name, age, business and residence address and principal occupation or employment during the past five years. Stockholders should send the required information to the Company at 4088 Commercial Avenue, Northbrook, Illinois 60062, Attention: J. Roger Moody, Jr. In order for a stockholder’s nomination of a candidate for nomination as a director to be valid, under the Company’s amended and restated by-laws notice of such nomination must be received by the

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Corporate Governance and Nominating Committee no more than 120 days and no less than 90 days prior to the one year anniversary of the previous year’s annual meeting date.

The Corporate Governance and Nominating Committee evaluates all candidates for nomination, whether identified by the committee or proposed by a stockholder, by considering a number of criteria, which include the candidate’s reputation, integrity, business acumen, diligence, experience, age, potential conflicts of interest, the ability to act in the interests of all stockholders, and the perceived need of the board of directors. Although the Corporate Governance and Nominating Committee does not have a formal diversity policy, it endeavors to comprise the board of directors of members with a broad mix of professional and personal backgrounds. Thus, the Corporate Governance and Nominating Committee accords some weight to the individual professional background and experience of each director. Further, in considering nominations, the Corporate Governance and Nominating Committee takes into account how a candidate’s professional background would fit into the mix of experiences represented by the then-current board of directors. When evaluating a nominee’s overall qualifications, the Corporate Governance and Nominating Committee does not assign specific weights to particular criteria, and no particular criterion is necessarily required of all prospective nominees.

In Fiscal Year 2011 the Corporate Governance and Nominating Committee acted to approve the slate of nominees for election to the Board of Directors at the Company’s annual meeting of stockholder on June 1, 2011 during a meeting of the full Board of Directors but did not conduct any other meetings or take any action by written consent in Fiscal Year 2011. Our Corporate Governance and Nominating Committee’s charter can be found on our website at http://www.nanosphere.us in the “Investor Relations/Media” section under the heading “Corporate Governance.” Any amendments to this charter will be posted to the website promptly upon adoption by the Corporate Governance and Nominating Committee.

Corporate Governance

Code of Business Conduct and Ethics

Our code of business conduct and ethics can be found on our website at http://www.nanosphere.us in the “Investor Relations/Media” section under the heading “Corporate Governance.” Any amendments to or waivers from our code of business conduct and ethics shall be posted to our website within four business days in accordance with paragraph (c) of Item 5.05 of Form 8-K.

Communications with the Board of Directors

The board has provided a procedure for shareholders or other persons to send written communications to the board, a board committee or any of the directors, including complaints to the Audit Committee regarding accounting, internal accounting controls, or auditing matters. Shareholders may send written communications to the board, the appropriate committee or any of the directors by certified mail only, c/o J.

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Roger Moody, Jr., Nanosphere, Inc., 4088 Commercial Avenue, Northbrook, Illinois 60062. All such written communications will be compiled by the chief financial officer and submitted to the board, a committee of the board or the individual directors, as appropriate, within a reasonable period of time. These communications will be retained with Nanosphere’s corporate records.

Director Attendance at Annual Meeting of Shareholders

We do not have a formal policy regarding attendance by directors at our annual meeting of shareholders but invite and encourage all directors to attend. Five of our then directors attended our 2011 annual meeting of stockholders on June 1, 2011. We make every effort to schedule our annual meeting of shareholders at a time and date to permit attendance by directors, taking into account the directors’ schedules and the timing requirements of applicable law.

Board Leadership Structure

Currently, the Company has separated the roles of Chief Executive Officer and Chairman of the Board. The Company believes that at this time the separation of these roles permits the Chairman of the Board to focus on oversight of the Company’s long-term corporate development goals while the Chief Executive Officer focuses on the strategic direction of the Company and oversees the day to day performance of the other executive officers in executing the Company’s business plan. Executive Sessions of the board of directors consisting only of non-management directors are held periodically as determined by the non-management directors. Such Executive Sessions typically occur immediately following regularly scheduled meetings of the board of directors, and may occur at any other time and place as the non-management directors may determine.

Pursuant to authority vested in the Audit Committee of the board of directors pursuant to its charter, the Audit Committee is responsible for overseeing the Company’s financial risk exposure and assisting the board of directors in overseeing the Company’s risk assessment and risk management policies and procedures. The Audit Committee discharges its risk oversight responsibilities as part of its quarterly reviews of the Company’s quarterly and annual financial statements by discussing with management, the Company’s independent auditors and outside legal counsel the Company’s risk profile and its financial risk exposure and assisting the board of directors with respect to risk mitigation policies and procedures as determined by the board of directors. In addition, the Compensation Committee has assessed the Company’s compensation programs as described under “Compensation Risk Assessment” in this Proxy Statement. The Company does not believe that the performance of these oversight functions by these committees has any effect on the leadership structure of the board of directors.

Policies and Procedures for Related Party Transactions

Our Audit Committee charter provides that our Audit Committee must review and approve in advance any related party transaction. All of our directors, officers and employees are required to report to our Audit Committee any such related party

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transaction for approval prior to its completion. In approving or rejecting a proposed related party transaction, our Audit Committee shall consider the relevant facts and circumstances available and deemed relevant to the Audit Committee, including, but not limited to, the risks, costs and benefits to us, the terms of the transaction and the impact on a director’s independence. Our Audit Committee shall approve only those related party transactions that, in the light of known circumstances, are consistent with, our best interests, as our audit committee determines in the good faith exercise of its discretion. A related party transaction includes any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, the amount involved exceeds $120,000, and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness, and employment by us of a related person.

In addition, any related person transaction previously approved by the Audit Committee or otherwise already existing that is ongoing in nature will be reviewed by the Audit Committee on an ongoing basis to ensure that such related person transaction has been conducted in accordance with the previous approval granted by the Audit Committee, if any, and that all required disclosures regarding the related person transaction are made. No such transactions were approved during fiscal 2011.

Compensation Risk Assessment

In setting compensation, the Compensation Committee considers the risks to the Company’s stockholders and to achievement of its goals that may be inherent in its compensation programs. The Compensation Committee conducted a risk assessment of the Company’s compensation programs, including its executive compensation programs. The Compensation Committee reviewed and discussed its assessment with management and outside legal counsel and concluded that the Company’s compensation programs are within industry standards and are designed with the appropriate balance of risk and reward to align employees’ interests with those of the Company and do not incent employees to take unnecessary or excessive risks. Although a portion of our executives’ and employees’ compensation is performance-based and “at risk,” we believe our compensation plans are appropriately structured and are not reasonably likely to result in a material adverse effect on the Company.

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Information about Executive Officers and Key Employees

The table below sets forth the names and ages of our executive officers and key employees, as well as the positions and offices held by such persons as of March 15, 2012. A summary of the background and experience of each of these individuals is set forth after the table. For biographical information for William P. Moffitt, III, please see “Election of Directors - Information about the Nominees” above.

J. Roger Moody, Jr. Mr.Moody joined Nanosphere in 2007 as Chief Financial Officer and Vice President of Finance & Administration. He also serves as the Company’s Treasurer and Secretary. Mr.Moody has more than 20 years of experience in leading finance, corporate development and operations for high growth healthcare and technology companies. Previously, Mr. Moody spent six years at Medsn, a medical education company where he began as chief financial officer and was promoted to chief operating officer where he led Medsn’s United States and off-shore operations. Mr.Moody also served as chief financial officer and led corporate development for two private venture backed companies sold to strategic partners. Additionally, Mr. Moody provided mergers and acquisition and strategic advisory services to technology and healthcare companies for Volpe Brown Whelan & Company. Mr. Moody began his career at IBM. Mr.Moody received his B.S. from Syracuse University and his M.B.A. from the University of Chicago, Graduate School of Business.

Winton G. Gibbons. Mr.Gibbons joined us in 2007 as Senior Vice President, Business Development. From 2005 to 2007, he was senior vice president for strategic and global product marketing at Biosite (now Inverness Medical). For the period of 1997 through 2005, he was a sell-side equity analyst for the investment firm of William Blair & Company, LLC, covering diagnostic, life science and biotechnology companies, and during which he became a principal, as well as group head for healthcare. Prior to that position, from 1994 to 1997, Mr. Gibbons was vice president of strategy and business development for the Patient Care Division of Boehringer Mannheim Diagnostics (now Roche Diagnostics). He has also been a director of management services at Merck & Co., a consultant and manager at McKinsey & Company, and held marketing and sales positions at Conoco Chemicals, where he began his career. Mr. Gibbons holds an M.B.A. in Finance and Business Policy from the University of Chicago, Graduate School of Business and a B.S. degree in Chemistry from Duke University.

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Michael K. McGarrity. Mr.McGarrity joined Nanosphere in 2005 as Chief Marketing Officer. Mr. McGarrity, who has more than 18 years of sales and marketing experience in the medical device industry, joined Nanosphere after 13 years with Stryker Corporation. At Stryker, he served in leadership roles in marketing and strategic development, most recently as vice president of marketing for Stryker Instruments, where he also had executive general management responsibility for a newly created business focused on interventional pain management. Mr. McGarrity is a graduate of the University of Notre Dame and began his career in commercial banking in Chicago.

Timothy J. Patno. Mr. Patno has been at Nanosphere since 2001. Mr. Patno led the development efforts of the Verigene Systems and the Verigene genomic assays. Additionally, he led the design efforts for the consumable manufacturing operations and has operationally led the microarray and consumable manufacturing teams since 2008. In 2009 he became responsible for Nanosphere’s other manufacturing operations. Prior to joining Nanosphere, Mr. Patno spent 9 years leading the System Engineering Groups for Baxter Fenwal’s Amicus® (blood cell) Separator. He was part of this team from product conception through a successful global market launch with annual global product sales of approximately $115M in 2001. From 1988 to 1992, Mr. Patno learned System Engineering and system integration skills working at Hughes Aircraft Company’s Space & Communications Group working on the HS601 spacecraft bus and the UHF F/O satellite system. Mr. Patno has degrees in General Engineering, BS, from the University of Illinois – Urbana/Champaign and Electrical Engineering, MS, from the University of Southern California. Mr. Patno was a Hughes Fellow at USC and an Evans Scholar at the University of Illinois.

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Compensation Discussion and Analysis

Overview of Compensation Program

The Compensation Committee of the board of directors is responsible for establishing and implementing our compensation philosophy, as detailed below. The Compensation Committee reviews and approves all of our compensation policies, including executive officer salaries, bonuses and equity incentive compensation. The Compensation Committee ensures that the total compensation paid to the executive management is fair, reasonable, competitive, and includes incentives that are designed to appropriately drive corporate performance.

The Compensation Committee reviews and approves the annual compensation for our executive officers, other than our chief executive officer, with respect to whom the Compensation Committee reviews and recommends the compensation for approval by the board of directors, which approval was obtained with respect to all 2011 compensation of our chief executive officer. The Compensation Committee may retain the services of an independent compensation consultant or research firm with respect to compensation of all named executive officers, but did not do so with respect to 2011 compensation. In addition, the Compensation Committee considers recommendations from the chief executive officer and from persons serving in supervisory positions over a particular officer or executive officer.

Overview of Compensation Philosophy and Objectives

The compensation of our executive officers is based in part on the terms of the employment agreements that we entered into with each of our named executive officers. In addition, our “pay-for-performance” philosophy is among the fundamental tenets of our executive compensation program. We have adopted an approach to compensation comprised of a mix of short-term and long-term components that are designed to provide proper incentives and to reward our senior management team.

Our intent regarding the compensation of our executive officers is to provide salary levels and compensation incentives that:

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Compensation Policies and Procedures

Our Compensation Committee is responsible for administering our compensation practices. Our Compensation Committee was appointed by our board of directors, and consists entirely of directors who are “outside directors” for purposes of Section 162(m) of the Code, and non-employee directors for purposes of Rule 16b-3 under the Exchange Act. Our Compensation Committee members are Mark Slezak, André de Bruin and Jeffrey R. Crisan, with Mr. Slezak as our Compensation Committee chairperson. Our Compensation Committee holds meetings as necessary throughout the year.

Within the context of the overall objectives of our executive compensation philosophy, the Compensation Committee determines the specific types and amounts of compensation to be paid to each of our named executive officers based on a number of factors including:

In determining the appropriate amounts and mix of various types of compensation for the named executive officers, the Compensation Committee considers the competitiveness of the Company’s overall compensation arrangements. In connection with the Company’s initial public offering in 2007, the Compensation Committee considered the executive compensation practices at 28 peer companies in the life sciences and medical technology industries and concluded that the compensation of the Company’s named executive officers was appropriately near the 50^th percentile of compensation paid to the named executive officers of these peer companies as a function of both total compensation paid and the allocation among the various components of compensation paid. The Compensation Committee has adjusted the compensation of the named executive officers each year based on the Committee’s assessment of current market conditions and Company and individual performance but has not formally evaluated peer company compensation data subsequent to the Company’s initial public offering. The Compensation Committee retains complete discretion with respect to the types and amounts of compensation awards each year.

When discussing performance evaluations and setting new compensation levels, the Compensation Committee reviews and considers recommendations from Mr. Moffitt, our chief executive officer, regarding the performance and contributions of the other four named executive officers and the senior management team, other than for himself. In its sole discretion, the Compensation Committee may accept or reject, in whole or in part, the recommendations of Mr. Moffitt. For 2011, the Compensation Committee evaluated executive officer compensation levels by considering the Company’s overall performance

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and that of Mr. Moffitt, and input from Mr.Moffitt with respect to the performance and individual contributions of the other four named executive officers. Mr. Moffitt does not participate in discussions about the amount of his own compensation. With the exception of Mr. Moffitt as our chief executive officer, the Compensation Committee has the final authority regarding the overall compensation for the executive officers and the senior management team. In the case of Mr.Moffitt, the Compensation Committee evaluates Mr.Moffitt’s performance and contributions and recommends compensation levels to the board of directors. In its sole discretion, the board of directors may accept or reject, in whole or in part, the recommendations of the Compensation Committee with respect to Mr.Moffitt’s overall compensation. For 2011, the board of directors reviewed and accepted all of the recommendations of the Compensation Committee.

Stockholder Say-on-Pay Advisory Vote

The Compensation Committee attempts to balance the interests of stockholders, regulators, and other interested parties. In 2011, we sought a stockholder say-on-pay advisory vote regarding executive compensation, and approximately 99% of the votes cast were in favor of our executive compensation. The Committee viewed this vote as supportive of the Company’s overall approach to executive compensation. Due to such strong stockholder support, we did not make any material changes to our compensation policies in 2011. Stockholders also provided strong support (approximately 95% of the votes cast) for holding such advisory votes every year, although approximately 4% of the votes cast favored a vote every third year. As a result, we currently intend to continue to provide an annual, stockholder say-on-pay advisory vote regarding executive compensation.

Elements of Compensation

The compensation of our named executive officers consists primarily of five components:

In general, total compensation is geared to be sufficient to attract and retain the best possible human resource talent. In determining the adjustments to the compensation of our executive officers for the fiscal year ended December 31, 2011 and prior periods, we relied on the experience of the members of our Compensation Committee who serve on the boards of directors and compensation committees for other similar companies, and we annually take into account the performance of each executive officer, their

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contributions toward the Company’s success, and the Company’s growth and stage of development.

We use a mix of short-term compensation (base salaries and cash incentive bonuses) and long-term compensation (equity incentive compensation) to provide a total compensation structure that is designed to achieve our pay-for-performance philosophy and our compensation objectives. We discuss each of the principal elements of our executive compensation in detail below.

Annual Cash Compensation

Base Salary

In general the base salaries are designed to provide a consistent base of income and to attract the appropriate level of talent. Our executive base salaries reflect (1) the initial base salaries that we negotiated with each of them at the time of their initial employment or promotion to their current positions, (2) in the case of our chief executive officer, the initial base salary reflected in his current employment agreement; and (3) our subsequent adjustments to these amounts, generally between 2% and 5% each year, are primarily attributable to the Company’s annual performance and any changes in our executives’ roles and responsibilities. In 2012 none of the named executive officers received salary adjustments based on the Company’s 2011 performance.

The following table presents base salaries for our named executive officers in 2011 and 2012:

The base salaries of our executive officers are reviewed annually. We may also increase the base salary of an executive officer at other times if a change in the scope of the officer’s responsibilities justifies such consideration or in order to maintain salary equity among our executive officers or for competitive reasons.

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Annual Incentive Compensation

Annual incentive awards are designed to reward near-term operating performance and the achievement of milestones critical to our success in both the near and the long-term. Consistent with our emphasis on pay-for-performance, we have adopted a management incentive bonus program. Executive officers will have an opportunity to earn bonuses based on the attainment of Company performance goals and a subjective analysis of individual performance that contributes to the attainment of those goals. The target bonuses and our establishment of business goals for the Company reinforces three of our compensation goals — namely, to motivate our executives toward even higher achievement and business results, to tie our executives’ goals and interests to ours and our stockholders’ and to enable us to attract and retain highly qualified individuals.

Since inception of our management incentive bonus program in 2003, our employment offer letters to the executive officers provide for participation in this incentive program and establish the target bonus amounts which are initially set in the employment offer letters but are subject to adjustment by the Compensation Committee. The target bonuses merely reflect an opportunity to receive the specified award, conditioned upon satisfaction of Company performance goals, but are not guarantees for their payout. Under our management incentive bonus program, we may pay less than the target bonus in the event the Company performance goals are only partially achieved. The ultimate payout is determined by the Compensation Committee after reviewing achievement of the Company’s performance goals, a subjective analysis of individual performance that contributed to the achievement of those goals, and our chief executive officer’s recommendations with respect to the contributions and performance of the other four named executive officers. In the case of our chief executive officer’s bonus, the ultimate payout is determined by the board of directors after reviewing the recommendation of the Compensation Committee.

The board of directors determines the target bonus opportunity for our chief executive officer after reviewing the recommendation of the Compensation Committee, and the Compensation Committee determines the target bonus amounts for the other four named executive officers, either from year to year or during a given year, as further incentives to motivate our executives to meet our business objectives. For 2011, the board of directors reviewed and accepted the recommendation of the Compensation Committee and set Mr.Moffitt’s target bonus opportunity at 60% of base salary. For 2011, the Compensation Committee considered Mr. Moffitt’s input with respect to the other four named executive officers and set all other named executive officers’ 2011 target bonus opportunity at 35% of base salary. The target bonuses are reflective of our historical emphasis on performance-based compensation. This approach to compensation is consistent with our overall pay-for-performance philosophy.

With respect to the Company performance goals, our chief executive officer, in consultation with the other executive officers, develops performance goals for the Company and submits the recommended goals for the approval of the Compensation Committee. In its sole discretion, the Compensation Committee may accept or reject, in whole or in part, the Company performance goals recommended by our chief executive

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officer. For 2011, the Compensation Committee reviewed and accepted the Company performance goals that Mr.Moffitt recommended. In 2011, the Company performance goals were as follows:

In addition to these Company performance goals, the Compensation Committee also adopted an individual performance goal in 2011 for Messrs. Moffitt and Gibbons to identify and pursue strategic partnerships that can accelerate achievement of the Company’s business plan and help mitigate risk. Some of these performance goals require the application of subjective judgment. Therefore, their outcomes are substantially uncertain at the time established. The Compensation Committee authorizes bonuses to the executive officers, other than the chief executive officer, in amounts that are commensurate with each executive officer’s target bonus opportunity relative to the achievement of the Company performance goals. At the close of the performance period, our chief executive officer assesses achievement of the Company performance goals, discusses with the Compensation Committee both that assessment and the contributions of each of the named executive officers toward achievement of the Company performance goals, and submits recommendations for bonus payouts for the approval of the Compensation Committee. The Compensation Committee discusses and reviews our chief executive officer’s assessment of the achievement of the Company performance goals, his own individual achievements and the contributions and individual performance of the other four named executive officers, and in its sole discretion may accept or reject, in whole or in part, the recommendations of Mr.Moffitt. For 2011, the Compensation Committee considered the Company’s progress toward achieving the Company performance goals, as well as Mr. Moffitt’s input, and determined that no bonuses be paid to the other four named executive officers for 2011.

For our chief executive officer, the Compensation Committee and board of directors retains the right to modify the portion of the target bonus to be paid to our chief executive officer based on the Compensation Committee’s subjective analysis of the attainment of the Company performance goals and of the chief executive officer’s contribution toward achievement of those goals. This process enables the Compensation Committee to more closely align the chief executive officer’s performance with the operation and strategic priorities of the Company, which can change from year to year and even during the course of any given year. At the end of every fiscal year, the Compensation Committee assesses the achievement of the Company performance goals and reports to the board of directors its assessment and bonus recommendations with respect to the chief executive officer. In its sole discretion, the board of directors may

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accept or reject, in whole or in part, the bonus recommendations of the Compensation Committee. For 2011, the board of directors reviewed and accepted the Compensation Committee’s recommendation to not pay any bonus with respect to Mr. Moffitt.

In 2011, the target bonus amounts and actual payouts were as follows:

The Compensation Committee determined not to award any bonuses to the named executive officers for 2011 by assessing the Company’s progress toward the achievement of the 2011 Company performance goals. The Compensation Committee noted that achievement of all goals does not automatically result in a 100% payout nor does failure to achieve any goals automatically result in no payout. However, the Compensation Committee was of the view that the Company’s near-term operational performance was below expectation. Accordingly, the Compensation Committee determined that the Company and its named executive officers should be awarded no bonus for 2011. The Compensation Committee retains complete and absolute discretion to differentiate among the executive officers with respect to the portion of the target bonus paid to any executive officer based on the Compensation Committee’s subjective analysis of performance and Mr. Moffitt’s input with respect to the other four named executive officers. For 2011 bonuses, the Compensation Committee made its compensation determinations based only on the Company’s lack of achievement of the 2011 Company performance goals. Final decision making authority with respect to all compensation decisions for the chief executive officer rests with the board of directors, which takes into account the recommendations of the Compensation Committee with respect to Mr. Moffitt. In 2011, the board of directors accepted and approved all of the Compensation Committee’s recommendations with respect to Mr. Moffitt’s compensation.

Equity Incentive Compensation

We grant equity incentive awards in the form of stock options and restricted stock awards to align the interests of our executive officers with the interests of our stockholders. Our decisions regarding the amount and type of equity incentive compensation and relative weighting of these awards among total executive

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compensation have been initially based on our negotiations with our executives in connection with their initial employment or promotion by our Company.

We have typically made grants of equity incentive awards to our executive officers on a periodic basis. All such grants are reviewed and approved by the Compensation Committee at regularly scheduled Committee meetings throughout the year. Awards to our chief executive officer are approved by the Compensation Committee and are subject to approval by the board of directors. The date of grant and the fair market value of the awards are established on the date of final approval by the Committee, or by the board of directors in the case of an award to our chief executive officer, in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 718, “Compensation - Stock Compensation.” Such fair market value is defined in our 2007 Long-Term Incentive Plan to mean the closing market price of a share of our common stock on the date of the grant, as reported on the NASDAQ Global Market for periods subsequent to our initial public offering. We do not have any program, plan or practice of setting the exercise price at a price less than fair market value of our common stock on the grant date. We do not have any program, plan or obligation that requires us to grant equity compensation on specified dates to our named executive officers.

On December 28, 2011, Mr. Moffitt received stock options to purchase 450,000 shares under the 2007 Plan at the price of $1.38 per share, the grant date fair value under ASC 718, that vest immediately. This grant was associated with his signing a new employment agreement with the Company that is described further below. In our year ended December 31, 2011, we made no equity incentive awards to our other executive officers. Our equity incentive award programs are described under “Stock Option Awards” and “Restricted Stock Purchase Awards” below.

Stock Option Awards

Stock option awards provide our executive officers with the right to purchase shares of our common stock at a fixed exercise price typically for a period of up to ten years, subject to continued employment with our Company. In general, we provide our executives and all of our employees, with service-based stock options that have both gradual and cliff vesting schedules. The gradually-vesting stock options are earned on the basis of continued service to us and generally vest over four years, 25% on each of the four anniversaries of the date of grant. The cliff-vested stock options vest in full on the seventh anniversary of the date of grant. However, the vesting of these stock options is subject to acceleration based on the achievement of distinct corporate milestones relating to product launch, revenues and profit margins, which are identical for all executive officers and for all employees generally. Historically, one-half of the total grants of stock options have typically been subject to the service-based vesting, and the other half are granted with a seven year cliff-vesting schedule, subject to acceleration based on the achievement of distinct corporate milestones. Additionally, the stock option awards have included acceleration of vesting provisions upon a change in control of the Company.

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With respect to the acceleration of cliff-vested awards, if there are five milestones associated with the grant of cliff-vested stock options, then 20% of the options granted shall immediately vest and become exercisable upon the achievement of each performance milestone.

We have granted stock options as incentive stock options in accordance with Section 422 of the Code, subject to the volume limitations contained in the Code, as well as non-qualified stock options. Generally, for stock options that do not qualify as incentive stock options, we are entitled to a tax deduction in the year in which the stock options are exercised equal to the difference between the exercise price and the fair market value, at the time of exercise, of the stock for which the stock option was exercised. The holders of the non-qualified stock options are generally taxed on this same amount in the year of exercise. For stock options that qualify as incentive stock options, we do not receive a tax deduction, and the holder of the stock option may receive more favorable tax treatment than he or she would for a non-qualified stock option. Historically, we have primarily granted incentive stock options to provide these potential tax benefits to our executives and because of the limited expected benefits to our company of the potential tax deductions as a result of our historical net losses.

Effective March 27, 2007, we adopted, as approved by our shareholders, the 2007 Long-Term Incentive Plan, or the 2007 Plan, that affords more flexibility to our Compensation Committee by allowing grants of a wide variety of equity awards to our key employees, directors and consultants, including non-qualified stock options, shares of restricted stock and other awards that are valued by reference to the fair market value of our common stock. This plan is designed to assist us in attracting, retaining, motivating and rewarding key employees, directors and consultants and providing long-term value for our stockholders by closely aligning the interests of these individuals with those of our stockholders. The 2007 Plan replaced our 2000 Equity Incentive Plan, or the 2000 Plan, and since the adoption of our 2007 Plan, no grants have been or will be made under the 2000 Plan. Except for the stock option award to Mr. Moffitt in connection with his entry into a new employment agreement with the Company on December 28, 2011, the Company did not grant any stock options to any other named executive officers in 2011. On February 14, 2012, the Compensation Committee awarded stock option grants to Messrs. Moody, Gibbons, McGarrity and Patno covering 250,000, 60,000, 250,000 and 250,000 shares, respectively. These stock option awards were issued in the ordinary course as general incentive compensation awards.

Restricted Stock Awards

We may grant restricted stock awards from time to time to provide our executive officers with restricted shares of our common stock. The shares of restricted stock may have a vesting period and may be subject to mandatory repurchase by us in connection with termination of employment. In 2011, the Company did not grant any restricted stock awards to any of the named executive officers.

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Other Compensation

All of our executive officers are eligible for benefits offered to employees generally, including life, health, disability and dental insurance and participation in our 401(k) plan. We intend to continue to maintain our current benefits for our executive officers. The Compensation Committee in its discretion may revise, amend or add to the officer’s executive benefits and perquisites if it deems it advisable. We do not believe it is necessary for the attraction or retention of management talent to provide executive officers with a substantial amount of compensation in the form of perquisites. In 2011, no such perquisites were provided.

Post-Employment Severance and Change in Control Benefits

Chief Executive Officer

On July 19, 2004, we entered into an employment agreement with Mr. Moffitt which expired on December 31, 2008. As of January 1, 2009, we entered into a new employment agreement with Mr. Moffitt which expired on December 31, 2011. On December 28, 2011, we entered into a new employment agreement with Mr. Moffitt which expires on December 31, 2012.

Mr. Moffitt’s current employment agreement provides for severance pay should Mr. Moffitt incur a loss of employment or a significant change in employment during the term of the agreement. Under the terms of his employment agreement, Mr. Moffitt will have the right to receive a transaction bonus (the “Transaction Bonus”) in an amount equal to 1% of the net proceeds of any transaction constituting a Change in Control (a “Change in Control”) of the Company, which occurs during the term of his employment agreement or within six months thereafter, provided that no such payments may be made more than five years after the date of the Change in Control. A Change in Control means (i) the purchase or other acquisition by any person, entity or group of persons, within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934 or any comparable successor provisions (other than stockholders (or affiliates thereof) of the Company as of July 19, 2004), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either the outstanding shares of common stock of the Company (on a fully-diluted basis) or the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors of the Company; (ii) the consummation of a reorganization, merger or consolidation of the Company, in each case, with respect to which persons who were stockholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company; or (iii) the sale of all or substantially all of the Company’s assets, provided that, in each case, such event is considered either a change in the ownership of the Company, within the meaning of Treas. Reg. § 1.409A-3(i)(5)(v) or a change in the ownership of a substantial portion of the Company’s assets, within the meaning of Treas. Reg. § 1.409A-3(i)(5)(vii).

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Mr. Moffitt’s current employment agreement further provides that if, prior to the expiration of the term, Mr. Moffitt’s employment is terminated by the Company without cause or by Mr.Moffitt for good reason, which is defined as a Diminution in Responsibility, or if the employment agreement is not renewed, then in each such case Mr.Moffitt will be entitled, in addition to base salary, the Transaction Bonus, unreimbursed expenses and other entitlements to the date of termination, but not thereafter, to (i) $500,000, payable in installments at the rate of his base salary in effect on the termination date in accordance with the Company’s customary payroll practices, and (ii) full and immediate vesting on the date of termination of all outstanding restricted stock awards granted to him on November 25, 2009. A Diminution in Responsibility is defined as any of (a) a material diminution in Mr.Moffitt’s duties or responsibilities or the assignment to Mr. Moffitt of duties that are materially inconsistent with his duties as President and Chief Executive Officer of the Company or that materially impair Mr.Moffitt’s ability to function in his position; (b)the Company’s failure, during the Term, to cause the election of Mr. Moffitt to the Board; (c)a relocation of the Company’s principal offices, without Mr. Moffitt’s acquiescence or consent, to a location that is more than a 50 mile radius from its current location; (d)any material reduction in the compensation and benefit opportunities of Mr. Moffitt (measured in the aggregate); or (e)any breach by the Company of any material provision of Mr. Moffitt’s employment agreement, provided that Mr. Moffitt has given the Company written notice of such breach and the Company has failed to cure such breach within a period that is reasonable under the circumstances.

Mr. Moffitt’s employment agreement also provides for an excise tax gross-up payment if payments received by Mr. Moffitt under the Agreement and other payments received under other agreements or employee benefit plans in connection with a Change in Control result in the imposition of a golden parachute excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended.

In the event Mr.Moffitt’s employment is terminated due to death or disability during the course of employment, he (or his estate or designated beneficiary) will be entitled to all amounts of base salary, Transaction Bonus and unreimbursed expenses through the date of such death or disability as well as immediate and full vesting, on the date of termination, of all outstanding options and restricted stock awards, in which case the options shall remain exercisable for a period of one year following the date of termination.

Mr. Moody

In the event Mr. Moody is terminated for reasons other than cause, he will be entitled to a lump-sum severance payment equivalent to five months’ base salary plus a prorated annual bonus. In the event the company is acquired and his employment is terminated without cause as a result of that acquisition or no job of similar status and compensation is offered to him, Mr. Moody will receive a lump-sum severance payment equivalent to ten months’ base salary plus a prorated annual bonus.

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Mr. Gibbons

In the event Mr.Gibbons is terminated for reasons other than for cause, he will be entitled to a lump sum severance payment equivalent to five months’ base salary plus a prorated annual bonus.

Mr. McGarrity

In the event Mr.McGarrity is terminated for reasons other than for cause, he will be entitled to a lump sum severance payment equivalent to six months’ base salary plus a prorated annual bonus.

Mr. Patno

Mr. Patno does not have any special severance arrangements. Accordingly, based on our standard policy, upon a termination for cause, without cause, in connection with a change in control or any other reason, Mr. Patno shall receive his accrued salary, earned bonus, unreimbursed expenses and other entitlements to the date of termination, unless we decide at that time to provide additional severance compensation or benefits.

The post-employment severance benefits for our executive officers are quantified in the “Estimate of Post-Employment Payments” table.

Accounting and Tax Considerations

Effective January 1, 2005, we adopted, on a prospective basis, the fair value provisions of SFAS 123(R), “Share-Based Payment,” or SFAS 123(R). Under SFAS 123(R), the estimated fair value of options granted, net of forfeitures expected to occur during the vesting period is amortized as compensation expense on a straight line basis over the vesting period of the options.

We generally intend for our executive compensation program to comply with Section 162(m) of the Code, as well as Code Section 409A. The Compensation Committee intends for all compensation paid to the named executive officers to be tax deductible to us pursuant to Section 162(m) of the Code. Under Section 162(m) of the Code, compensation paid to the named executive officers in excess of $1,000,000 cannot be deducted by us for federal income tax purposes, unless such amounts satisfy the performance-based exception to the deduction disallowance.

Section 409A of the Code addresses certain non-qualified deferred compensation benefits payable to our executives and provides that if such benefits do not comply with Section 409A, they will be taxable in the first year they are not subject to a substantial risk of forfeiture. In such case, our executives would be subject to regular federal income tax, interest and an additional federal income tax of 20% of the benefit includible in income. We have generally designed our executive compensation plans and agreements in a manner that complies with Section 409A.

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We have granted stock options as incentive stock options in accordance with Section 422 of the Code subject to the volume limitations contained in the Code. Generally, the exercise of an incentive stock option does not trigger any recognition of income or gain to the holder. If the stock is held until at least one year after the date of exercise (or two years from the date the option is granted, whichever is later), all of the gain on the sale of the stock, when recognized for income tax purposes will be capital gain, rather than ordinary income to the recipient. Consequently, we do not receive a tax deduction. For stock options that do not qualify as incentive stock options, we are entitled to a tax deduction in the year in which the stock options are exercised equal to the spread between the exercise price and the fair market value of the stock for which the stock option was exercised. The holders of the non-qualified stock options are generally taxed on this same amount in the year of exercise.

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SUMMARY COMPENSATION TABLE

The following summary compensation table sets forth certain information with respect to compensation for the years ended December 31, 2009, 2010 and 2011 earned by or paid to our Chief Executive Officer, Chief Financial Officer and our three other most highly compensated executive officers, who are referred to as the named executive officers.

Expected volatility is based on calculated stock volatilities for publicly traded companies in the same industry and general stage of development as us for 2009 and 2011. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grants for periods consistent with the expected

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life of the option. The expected life of options granted is derived from the average of the vesting period and the term of the option as defined in the respective incentive plans, following the guidance in SEC Staff Accounting Bulletin No. 107, Share-Based Payment.

Grants of Plan-Based Awards

Pursuant to our management incentive bonus program we did not grant cash awards and granted one equity award during Fiscal Year 2011.

The following table shows information with respect to awards granted to the named executive officers during the Fiscal Year 2011 under the management incentive bonus plan.

Estimated Future Payouts Under Non-Equity Incentive Plan Awards:

The non-equity incentive plan compensation varies between the targets reported on the “Grants of Plan-Based Awards” table and the “Summary Compensation” table. The compensation committee established the management incentive bonus program, in which the compensation committee establishes performance targets for the named executive officers for the year, the results of which are substantially uncertain at the time they are established. The performance targets generally relate to product launches, development of additional products, the identification and pursuit of strategic partnerships, adherence to operating budgets and submission of FDA applications. For our chief executive officer, the compensation committee retains the right to modify performance targets or apply greater emphasis to some targets over others, in order to more closely align the chief executive officer’s performance with the operation and strategic priorities of the Company, which can change from year to year and even during the course of any given year. At the end of the every fiscal year, the compensation

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committee assesses the achievement of the performance targets and reports its findings and bonus recommendations to the board of directors. In its sole discretion, the board of directors may accept or reject, in whole or in part, the bonus recommendations of the compensation committee. For 2011, the board of directors reviewed and accepted the compensation committee’s bonus recommendation with respect to Mr. Moffitt.

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Outstanding Equity Awards at December 31, 2011

The following table sets forth certain information with respect to outstanding stock option and warrant awards of the named executive officers for the fiscal year ended December 31, 2011.

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Equity Compensation Plan Information

The following table provides information as of December 31, 2011 with respect to shares of Nanosphere common stock that may be issued under the 2007 Plan, which is the Company’s only existing equity compensation plan under which grants can be made. Stockholders approved Nanosphere’s 2007 Plan on March 27, 2007.

Equity Compensation Plan Information

Arrangements with Named Executive Officers

Mr. William P. Moffitt, III. We entered into an employment agreement dated July 19, 2004 with Mr. Moffitt (the “Initial Employment Agreement”), in connection with his employment as our President and Chief Executive Officer. The employment agreement provided an initial base salary of $350,000 per year, which was to be reviewed annually and could be increased, but not decreased below $350,000, by our board of directors. The agreement also provided Mr. Moffitt with a target bonus opportunity subject to the achievement of agreed goals and milestones, that for calendar years ended after 2005, could not be less than $150,000. In 2009, Mr. Moffitt’s annual rate of salary was increased to $427,450 and the target amount of his performance bonus opportunity was set at $256,470.

Effective January 1, 2009, we entered into a new employment agreement with Mr. Moffitt for a term of three years. The terms of the new employment agreement are substantially the same as the terms in the Initial Employment Agreement with the exception of Mr. Moffitt’s salary and bonus amounts which have been adjusted by the

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board of directors to the amounts listed above under the heading “Compensation Discussion & Analysis - Annual Cash Compensation - Base Salary.”

Effective December 28, 2011, we entered into a new employment agreement with Mr. Moffitt for a term of one year. The terms of the new employment agreement are substantially the same as the terms in the Initial Employment Agreement with the exception of Mr. Moffitt’s salary and bonus amounts which have been adjusted by the board of directors to the amounts listed above under the heading “Compensation Discussion & Analysis - Annual Cash Compensation - Annual Incentive Compensation.”

Mr. Moffitt’s current employment agreement also provided for an award of options to purchase 450,000 shares of the Company’s common stock to be issued to Mr. Moffitt under the Company’s 2007 Long-Term Incentive Plan (the “Stock Options”). The Stock Options were fully vested upon issuance and have an exercise price per share of $1.38, which is the fair market value of the Company’s common stock on the Effective Date. Any shares acquired by Mr. Moffitt upon exercise of these stock options may not be sold until the earlier of the second anniversary of the Effective Date, which is December 28, 2013, or the first anniversary of the date of termination of Mr. Moffitt’s employment.

For a discussion of Mr. Moffitt’s rights and severance benefits under his current employment agreement in the event of a termination or change in control of the Company, see “Compensation Discussion & Analysis - Post-Employment Severance and Change in Control Benefits.”

J. Roger Moody, Jr. We entered into an employment agreement dated April 23, 2007 with Mr. Moody, in connection with his employment as our Chief Financial Officer. The employment agreement provides an initial base salary of $235,000 per year, or such greater amount as our board of directors may from time to time establish. The agreement also provides Mr. Moody with a performance bonus opportunity of $90,000 per year. In the event we terminate Mr. Moody’s employment for reasons other than cause, Mr. Moody will be entitled to a severance payment equal to five months’ base salary plus a prorated calculation of his annual bonus. In the event we are acquired and Mr. Moody is terminated without cause as a result of that acquisition or no job of similar status and compensation is offered to him, Mr. Moody will be entitled to a severance payment equal to ten months’ base salary plus a prorated calculation of his annual bonus.

Winton G. Gibbons. We entered into an employment agreement dated June 18, 2007 with Mr. Gibbons, in connection with his employment as our Senior Vice President, Business Development. The employment agreement provides an initial base salary of $250,000 per year, or such greater amount as our board of directors may from time to time establish. The agreement also provides Mr. Gibbons with an initial performance bonus opportunity of $45,000 per year. In the event we terminate Mr. Gibbons’ employment for reasons other than cause, Mr. Gibbons will be entitled to a severance payment equal to five months’ base salary plus a prorated calculation of his annual bonus.

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Michael K. McGarrity. We entered into an employment agreement dated September 8, 2005 with Mr.McGarrity, in connection with his employment as our Chief Marketing Officer. The employment agreement provides an initial base salary of $235,000 per year, or such greater amount as our board of directors may from time to time establish. The agreement also provides Mr.McGarrity with a performance bonus opportunity of $90,000 per year. In the event we terminate Mr. McGarrity’s employment for reasons other than cause, Mr. McGarrity will be entitled to a severance payment equal to six months’ base salary plus a prorated calculation of his annual bonus.

Timothy J. Patno. We entered into an employment agreement dated March 19, 2001 with Mr. Patno, in connection with his employment as a Systems Engineer. The employment agreement provides an initial base salary of $110,000 per year, or such greater amount as our board of directors may from time to time establish. Mr.Patno’s employment agreement establishes an at-will employee relationship and does not provide for any severance arrangements. Accordingly, upon a termination for cause, without cause, change in control or any other reason, Mr. Patno shall receive his accrued salary, earned bonus, unreimbursed expenses and other entitlements to the date of termination, unless we decide at that time to provide additional severance payments. We have not entered into a new employment agreement with Mr.Patno in connection with his current position as Chief Technology Officer.

Each of our executive officers has entered into our standard employment agreement, some of which contain severance benefit provisions on which the table below is based, and which further include customary provisions relating to the handling of proprietary and confidential information, as well as restrictions on competition and solicitation during the period of employment and for one year after termination.

Estimate of Post-Employment Payments

(Assumes a December 31, 2011 Employment Termination Event.)

The following table sets forth the additional amounts that could have been realized by each named executive officer if termination of his employment were to occur as of December 31, 2011 under the following circumstances.

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Non-Employee Director Compensation Table

During Fiscal Year 2011, four directors earned cash fees for their services on the board of directors. The other directors did not receive any cash fees for their services on the board of directors, but were entitled to reimbursement of all reasonable out-of-pocket expenses incurred in connection with their attendance at board of directors and board committee meetings. Our non-employee directors were eligible to receive stock options under the 2007 Plan.

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On June 1, 2011, the board of directors granted options to four of the directors. Mr.de Bruin, Dr. Mirkin, Mr. Randall and Ms. Rosenberg each received options to purchase 39,060 shares of common stock at the price of $4.50 per share, a price the board of directors determined to be the fair market value of the shares on the date of grant, and vest monthly over a three years.

During 2008, the compensation committee recommended and the board of directors approved a director compensation plan. The director compensation plan applies to independent directors; however, Mr. Slezak and Mr. Crisan waived their eligibility to participate in the director compensation plan for Fiscal Year 2011. The director compensation plan generally compensates directors for their service as a member of the board of directors through an annual cash award of $40,000, payable quarterly in arrears, and the grants to each such director of options to purchase shares of common stock having an approximate Black-Scholes value of $60,000, which vest monthly over three years. In addition, each director receives a cash award of $7,500 for each year of service on the compensation committee and audit committee and a cash award of $5,000 for each year of service on the corporate governance and nominating committee. Committee chairs receive different cash rewards for each year of service in such capacity, as follows: The audit committee chair receives a cash award of $15,000 for each year of service; the compensation committee chair receives a cash award of $12,500 for each year of service, which was waived for Fiscal Year 2011 by Mr. Slezak; and the corporate governance and nominating committee chair receives $10,000 for each year of service. Additionally, directors are reimbursed for out-of-pocket expenses incurred in connection with their service as directors.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors, executive officers and 10% stockholders of a registered class of equity securities to file reports of ownership and reports of changes in ownership of our Common Stock and other equity securities with the SEC. Directors, executive officers and 10% stockholders are required to furnish us with copies of all Section 16(a) forms they file. Based on a review of the copies of such reports furnished to us, we believe that during the fiscal year ended December 31, 2011, our directors, executive officers and 10% stockholders timely filed all Section 16(a) reports applicable to them.

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Report of the Compensation Committee

The material in this report is not “solicitation material,” is not deemed filed with the Securities and Exchange Commission, and is not incorporated by reference in any filing of the company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any filing.

Our Compensation Committee is responsible for reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the chief executive officer’s performance in light of those goals and objectives and, determining and approving the chief executive officer’s compensation level based on this evaluation. Our Compensation Committee is also responsible for reviewing and approving the salaries and other compensation of our other executive officers. Each member of our Compensation Committee is independent under the NASDAQ Global Market listing requirements. The Compensation Committee’s function is more fully described in its charter which has been approved by our board of directors. Our Compensation Committee’s charter can be found on our website at http://www.nanosphere.us in the “Investor Relations/Media” section under the heading “Corporate Governance.” Any amendments to this charter will be posted to the website promptly upon adoption by the Compensation Committee.

Our Compensation Committee has reviewed the Compensation Discussion & Analysis with senior management and, based on that review and their discussions, recommends to the board of directors that it be included in this proxy statement.

Compensation Committee

Mark Slezak (Chair)

Jeffrey R. Crisan

André de Bruin

Compensation Committee Interlocks and Insider Participation

None of the members of the compensation committee has been or is an officer or employee of ours. None of our executive officers serves on the board of directors or compensation committee of a company that has an executive officer that serves on our board or compensation committee. No member of our board is an executive officer of a company in which one of our executive officers serves as a member of the board of directors or compensation committee of that company. Lurie Investment Fund, LLC and Bain Capital Venture Fund 2005, L.P. each directly holds more than 5% of our capital stock. Mr. Slezak, chairman of our board of directors, is an affiliate of Lurie Investment Fund, LLC, Lurie Investments, Inc., AOQ Trust, Alfa-Tech, LLC and Anda-Proquest, LLC. Mr. Crisan, a member of our board of directors and the compensation committee, is an affiliate of Bain Capital Venture Fund 2005, L.P. These ownership interests are described under the captions “Election of Directors - Information about the Nominees” and “Security Ownership of Certain Beneficial Owners, Directors and Management.”

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Security Ownership of Certain Beneficial Owners, Directors and Management

Unless otherwise indicated, the following table sets forth, as of April 9, 2012, certain information regarding the beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of our Common Stock based upon the most recent information available to us for (i) each person known by us to own beneficially more than five (5%) percent of our outstanding Common Stock, (ii) each current director and director nominee Mr. White, (iii) each person listed in the “Summary Compensation Table” above and (iv) all executive officers and directors as a group. Except as otherwise indicated, each listed stockholder directly owned his or her shares and had sole voting and investment power. Unless otherwise noted, the address for each person listed below is Nanosphere, Inc., 4088 Commercial Avenue, Northbrook, Illinois 60062.

In computing the number of shares of Common Stock beneficially owned by a person and the percentage ownership of that person, we have deemed outstanding shares of Common Stock subject to options held by that person that are exercisable within 60 days of April 9, 2012. We have not deemed these shares outstanding for the purpose of computing the percentage ownership of any other person.