10x Genomics Files IPO Prospectus Amid Explosive Growth Driven by Proprietary Short-Read Sequencing Technology

VCBeat (WeChat Official Account: vcbeat) learned from foreign media that gene-testing startup 10x Genomics has recently raised an additional $35 million. This financing is a continuation of the company’s Series D round, and 10x Genomics will use the funds to further advance its R&D efforts and expand product marketing.

In April 2018, 10x Genomics raised $50 million in its Series D financing round, led by Meritech Capital, with participation from Fidelity Investments, Wells Fargo, Venrock, Foresite Capital, and SoftBank. Regarding the decision to extend the existing Series D round rather than initiate a new financing round, Serge Saxonov, co-founder of the company, stated that this approach was adopted to enhance capital-raising efficiency.

10x Genomics is a leader in the field of genetic testing. Founded in 2012 and headquartered in California, United States, the company maintains offices in more than ten countries, including the United Kingdom, France, and Switzerland. It possesses revolutionary DNA sequencing technology that enables the identification of previously inaccessible genomic information, thereby accelerating the advancement of biological and genetic sciences.

Between 2015 and 2017, the company’s revenue grew twentyfold. 10x Genomics is planning to expand another tenfold, aiming to become one of the world’s largest genetic testing companies. According to data presented at the 37th Annual J.P. Morgan Healthcare Conference, 10x Genomics reported annual revenue of $71 million in 2017 and $146 million in 2018, more than doubling its total revenue. Currently, 10x Genomics has a market capitalization of $42 billion, which is projected to reach $53 billion by 2022.

What Makes 10x Genomics So Exceptional That It Became a Highly Acclaimed Unicorn in the Genetic Testing Field in Just Seven Years?

10x Genomics primarily features two technologies, one of which is capable of analyzing short DNA sequences.Linked-Reads, the other is RNA sequencing of single cellsscRNA-Seq。

Linked-Reads enable the acquisition of extensive genomic information through short-read sequencing. By partitioning and barcoding high-molecular-weight (HMW) DNA, this technology generates novel data structures that allow for the reconstruction of complete genomic information from short reads. This innovative approach can be applied to various diagnostic processes. For instance, in pathological research on genetic disorders, certain disease-associated mutant gene sequences are amenable only to short-read sequencing, such as those located in NGS blind spots. Linked-Reads can detect these elusive genomic regions, enabling researchers to experimentally analyze previously inaccessible areas and meeting the urgent demand in biological research for precise cellular information.

In addition to its applications in the field of genetic disorders, Linked-Reads technology can also be applied in three areas: cancer research, agricultural and environmental genomics, and human genomic variation. By leveraging Linked-Reads technology, short reads are assembled to reconstruct complete genomic information, enabling precise and intuitive identification of the genetic origins of pathological issues.

10x Genomics’ second technology, single-cell RNA sequencing (scRNA-Seq), enables the analysis of RNA across entire cell populations and measures the average target values for the majority of cells. By analyzing transcription at the single-cell level, scRNA-Seq captures heterogeneity within samples. Heterogeneity is observed in various cell types, including immune T cells and pathological tumor cells, all of which are amenable to single-cell RNA sequencing. This approach to single-cell transcriptomic analysis ensures the accuracy of experimental results.

Currently, scRNA-Seq enables single-cell molecular characterization of hundreds of thousands of cells within the same sample, allowing for the exploration of complex tissue systems, such as the immune system.

It is worth noting that 10x Genomics has also developed a Chromium system using its proprietary technology. This system functions as a reagent delivery platform capable of partitioned sequencing of DNA molecules longer than 100 kb. It assigns all fragment information generated from the same partition to a unique barcode, establishing a one-to-one correspondence between partitions and barcodes, and can generate over 100,000 barcodes within minutes. The genetic information of the original long DNA molecules can be reconstructed by mapping the short-read data derived from these barcodes.

Now, 10x Genomics can integrate the above steps into the “short-read sequencer,” seamlessly consolidating complex experimental procedures and simplifying the workflow.

Dr. Serge Saxonov, co-founder of 10x Genomics, was named one of Goldman Sachs’ 100 Most Intriguing Entrepreneurs in 2016. He previously served as the Director of Research and Development at the prominent genetic testing company 23andMe. Prior to founding 10x Genomics, Dr. Saxonov was Vice President at QuantaLife, where he was responsible for advancing the company’s core ddPCR technology. QuantaLife focused on the development and commercialization of droplet PCR platforms but was acquired by Bio-Rad Laboratories in 2011.

In 2012, Serge Saxonov and Ben Hindson co-founded 10x Genomics. Dr. Ben Hindson serves as the Chief Scientist at 10x Genomics and was previously the Co-founder and Chief Scientist of QuantaLife. He holds multiple patents in his field of expertise and has published numerous professional articles.

Furthermore, Mr. Brad Crutchfield, the company’s Chief Commercial Officer, has held relevant positions at internationally renowned biotechnology companies such as QIAGEN, Illumina, Bio-Rad Laboratories, and NanoString Technologies, bringing over thirty years of leadership experience in commercial sales and marketing.

Composition of the 10x Genomics Board of Directors

Dr. John Stuelpnagel, Chairman of the Board at 10x Genomics, holds an MBA from the University of California, Los Angeles (UCLA). As a co-founder and former Chief Executive Officer of Illumina, he played a pivotal role in establishing the company as a leader in the life sciences industry. Additionally, Dr. Stuelpnagel has served as a venture capitalist with CW Group, Executive Chairman of Ariosa, and Chairman of Sequenta. With his extensive portfolio of leadership roles, Dr. Stuelpnagel is a highly authoritative and experienced expert in the field.

Proprietary sequencing technologies and an experienced management team have become the driving forces behind 10x Genomics’ rapid growth. In the past six months, 10x Genomics has acquired two biotechnology companies: Epinomics, which specializes in epigenetics, and Spatial Transcriptomics, a developer of two-dimensional gene expression technology.

In 2018, 10x Genomics launched a series of new products, including single-cell ATAC-seq. In early 2019, the company released the third version of its single-cell gene expression kit. Furthermore, leveraging technology developed through Spatial Transcriptomics, 10x Genomics introduced a new product in 2019 that involves placing thin tissue sections on slides containing nucleic acid probes, attaching barcodes that preserve spatial information to mRNA molecules, and then preparing them for sequencing.

Currently, 10x Genomics has completed six rounds of financing, with a total amount of $246 million.

Meritech Capital, founded in 1999 and headquartered in California, USA, is a leading late-stage venture capital firm. The firm does not engage in early-stage investments, focusing instead on growth-stage and private equity investments. Its investment focus is on high-potential companies in the high-tech sector, with over $2.6 billion in assets under management.

Fidelity Investments was founded in 1946 and is a comprehensive financial services firm in the United States, offering a wide range of services including fund distribution, investment advisory, wealth management, and securities execution and clearing. The firm operates more than 140 investment centers across the United States. As of March 2018, it managed $2.5 trillion in assets, making it one of the largest mutual fund and financial services groups in the world.

Wells Fargo, established in 2014 and headquartered in San Francisco, USA, is a diversified financial services institution. Wells Fargo offers services such as global remittances, online banking loans, and wealth management. It is the second-largest bank by market capitalization globally and ranked 26th on the 2018 Fortune 500 list. The company operates in 35 countries nationwide and holds assets exceeding $1.3 trillion.

Venrock, established in 1969 as the venture capital arm of the Rockefeller family, is a benchmark institution in the industry. Managing $2 billion in assets, Venrock primarily provides funding and strategic support to entrepreneurs in the technology, healthcare, media, and energy sectors. The firm has invested in renowned companies such as Illumina, Intel, Nest, and Apple, helping hundreds of entrepreneurs tap into new markets, disrupt the status quo, and achieve success.

Foresite Capital is a multi-stage healthcare and life sciences investment firm founded in 2011, headquartered in San Francisco with an office in New York, currently managing $2 billion in assets.

Foresite Capital employs a rigorous, science- and data-driven approach to investment analysis. Through a collaborative co-investment model with its portfolio companies, the firm aims to provide capital to promising healthcare and life sciences enterprises at various stages of development, thereby addressing long-unmet clinical needs. The company’s investments are primarily focused on firms that leverage data science and machine intelligence tools within the medical sector.

SoftBank Capital, established in 1995, is a multi-stage venture capital firm headquartered in Tokyo, Japan. As an investment arm of SoftBank Group founded by Masayoshi Son, it operates under a parent company that owns Japan’s largest e-commerce market and its third-largest mobile telecommunications carrier. SoftBank Capital focuses on venture investments in the IT sector, including internet and telecommunications. It has invested in more than 600 companies worldwide, with notable portfolio examples including Yahoo, Alibaba, and 58.com.