10x Genomics co-founder and CEO Serge Saxonov, PhD

After growing its Xenium In Situ single-cell spatial imaging platform into its third successful technology family last year, 10x Genomics has no plans for launching a fourth platform in 2024—but will bring to market several new features for Xenium and a new-and-improved HD version of its Visium Spatial Gene Expression platform this year, says co-founder and CEO Serge Saxonov, PhD.

“We actually feel pretty strongly about this trinity of platforms because there’s a very first-principles rationale behind the three that we have,” Saxonov explained in an exclusive interview with GEN Edge.

“When you think to the future, it’s pretty clear to me that you’ll want to be able to measure things while preserving that single-cell information and the spatial information if you’re starting with tissues. There are, at a high level, three fundamental technological approaches to doing that.”

Those approaches are represented by 10x’s three platform technologies: Xenium, Visium—and the oldest and most lucrative of the three, the Chromium Single Cell Immune Profiling platform, launched in 2016.

“2016 is when we saw the explosion of single cell interest with the Chromium platform, when the commercial trajectory really started taking off,” Saxonov recalled last fall on GEN’s “Close to the Edge” video interview series. “That was the platform that really catalyzed the single-cell revolution that has taken over the world of biology over the last several years.”

For Xenium, 10x detailed four new offerings to reach customers during 2024. The first rolls out later this quarter, when 10x plans to start shipping Xenium systems with improved cell segmentation capability.

“Xenium launched with really robust cell segmentation approach, but this is a really challenging problem to make work across all different tissues across all different samples,” Saxonov said. “We’ve been making great progress in terms of stance, in terms of chemistry [and] computation.”

Xenium says it aims to generate the most accurate cell segmentation, especially in dense regions, through a deep learning approach that entails using a DAPI nuclear stain to infer cell boundaries; and a core set of algorithms that operate on top of staining, with curated sets of data to train the algorithms.

New offerings

Saxonov also outlined the other three new Xenium offerings planned for this year:

  • 5,000 Plex Panels, set to start shipping during the second quarter, and offering a multiplexing improvement from current gene expression panels ranging from the 247-gene mouse brain panel to the 379-gene mouse tissue atlassing panel. “We’ve pushed the envelope along several areas in a truly multidisciplinary 10x fashion to deliver this new capability to scale up plex level by an order of magnitude, while delivering really high quality, high sensitivity, high specificity—all within a five-day run across a large tissue area.”
  • In-line multiplex protein detection, set to start shipping in the second half of this year, to scale up to larger panels. “This is something that a lot of our customers are really excited by.”
  • 1,000 and 2,000 Plex Panels, offers users more flexibility and gene expression options, expected to begin shipping later this year or early 2025.

“This is just the beginning,” Saxonov said. “What’s been exciting from the start is the amount of technological headroom that this platform affords. We have many years’ worth of development ahead of us to keep adding more applications, more throughput, and to drive down the cost. We can’t wait to introduce those capabilities to our customers.”

As for the Visium platform, 10x plans this quarter to start shipping a new higher resolution version of the firm’s widely used, slide-based Visium Spatial Gene Expression, which is capable of detecting 11 million features in a continuous grid-pattern of 2 μm squares—compared with just 5,000 features detectable in a hexagonal arrangement of 55 μm spots.

Visium HD was first announced at last year’s Advances in Genome Biology and Technology (AGBT) conference. Since then, 10x said, it completed an acquisition that will accelerate scaling up manufacturing of Visium HD.

Raising revenue guidance

During the third quarter of 2023, 10x racked up $153.64 million in revenue, up 17% from $131.07 million in Q3 2022. For the first three quarters of last year, 10x reported $434.75 million in revenue, up 21% from $360.18 million in January–September 2022. That performance prompted 10x to raise its guidance to investors for all of 2023, to a range of $610 million to $625 million—up 18% to 21% over full-year 2022.

However, 10x finished the third quarter with a year-to-year more-than-doubling of its net loss, to $92.99 million for the third quarter of 2023, compared with a net loss of $41.91 million in Q3 2022.

10x asserts that Xenium—which was commercially launched in December 2022—emerged as a significant driver of new revenue in 2023, based on the seven-fold year-over-year revenue leap in the company’s “spatial” sector during the first three quarters of last year, to $48.36 million from $6.75 million in Q1-Q3 2022. About half of that January-September 2023 revenue ($22.71 million) came during the third quarter, nearly quadruple the $5.96 million generated in Q3 a year earlier.

However, 10x’s “spatial” category combines revenues from Xenium and Visium, neither of which the company breaks out. By contrast, 10x has disclosed preliminary, unaudited full-year 2023 revenue for its oldest platform Chromium of about $468 million—accounting for more than three-fourths (about 76%) of 10x’s approximately $618.7 million in preliminary, unaudited total revenue last year, up 20% from 2022. The company is set to release full results for the fourth quarter and all of 2023 on February 15.

The company finished 2023 by increasing its cumulative number of instruments sold to more than 5,900—consisting of 5,150+ Chromium instruments, 500+ Visium instruments, and 250+ Xenium instruments.

Transformational year ahead

Spatial platforms like Xenium offer more longer-term growth potential than single-cell platforms like Chromium, a trio of Barclays Capital analysts observed January 24 in a report assessing the U.S. life sciences tools and diagnostics industry.

2024 is a “build year for [10x] and likely proves transformational for the business. We could be looking at the last year of single-cell demand before it starts to decline meaningfully over the next few years as spatial starts to take over,” Luke Sergott, Barclays’ director, healthcare equity research, and colleagues wrote, “If Spatial is what everyone thinks it is, and it seems to be, then we would expect Chromium work to start declining [in 2025–2026].”

The Barclays analysts added that they do not see single-cell research disappearing, nor do they predict steep declines in the business over the next two to three years. “But we do think the transition from Single-Cell to Spatial could mimic microarray demand and usage after sequencing costs became much more approachable. As such, all eyes will be on Visium HD’s success (1Q launch) and Xenium’s placement trends to determine if Spatial’s market is focused more on niche applications or if it can scale into what Chromium did for single cell.”

Sergott’s team said they will watch close several key performance measures for 10x’s spatial cell technology this year:

  • Clinical adoption, translational applications, pharma demand: “Need to unlock the clinical opportunity for the technology to realize full potential and rival single-cell.”
  • Xenium placement strength: “Will Xenium maintain strong placements or does a slowdown suggest the market is limited to niche applications? We might be early in being concerned about this dynamic.”

Reflecting slower activity across the tools sector, Barclays scaled back its 2024 revenue growth forecast from 19% to 15%, bringing its revenue estimate down from $738 million to $711 million. However, the analysts raised 10x’s 12-month price target 22%, from $45 to $55 a share, believing activity will ramp up later this year.

Network building

Eager to promote Xenium by accelerating access to proof-of-concept data generated through the platform by researchers worldwide, 10x in December announced the launch of its Xenium Catalyst Network. The network added four founding institutions to its Xenium Catalyst Program, a technical access service launched earlier this year for prospective customers:

  • BioChain Institute, a provider of sample collection, preparation, and analysis services that plans to offer single cell spatial services using Xenium.
  • K2bio, a full-service preclinical contract research organization (CRO) whose capabilities include single cell in situ analysis.
  • Macrogen, a South Korea-based provider of sequencing services, plans to apply Xenium in situ single cell analysis to expand pharmaceutical services for new drug screening, and in the future intends to provide global services for precise clinical diagnostic solutions for cancer and other incurable diseases.
  • McDonnell Genome Institute, at Washington University School of Medicine, which uses 10x technologies to deliver its single cell and spatial analyses.

During 2024, 10x said, more members are expected to join the network, which is intended to replicate and expand the best-in-class experience and data that researchers can expect when running Xenium in their own labs.

How many more members?

“We’re going to have to judge it based on how well the service providers are able to keep up with the customer demand [and] how quickly customers go from trying this to buying their own instruments,” Saxonov said. “These service providers, the catalyst network members, their role is to help new customers learn about the technology and provide the extra level of service until those customers can be self-sufficient in the technology.”

“We started the catalyst program to allow customers to run their samples with us in advance of purchasing. This is a way to get familiar with the technology before investing. Now we’ve expanded this to third parties, to service providers who can do this for other customers,” Saxonov added. “This is a way for us to amplify our market reach and give as many people as possible access to be trying these new tools and technologies.”

Patent lawsuits

Across its platform technologies, Saxonov said, 10x intends to continue its strategy of aggressively litigating potential infringement of its patents. Last November, a jury awarded approximately $31 million in damages (25 million in lost profits, $6 million royalty) to 10x in a lawsuit it filed against NanoString Technologies in U.S. District Court.

The Delaware jury agreed with 10x, which held that NanoString’s GeoMx Digital Spatial Profiler infringed on seven patents that 10x held after exclusively licensing them from Prognosys Biosciences.       .

NanoString, which is appealing the decision, has since disclosed that it is eliminating 9% of its workforce—about 50 employees—during this quarter, and faces delisting from Nasdaq after its stock closed below the $1/share  minimum price for 30 consecutive business days.

In December, 10x sued Curio Bioscience in the Delaware U.S. District Court, alleging that Curio’s Seeker products infringed on five other patents for which 10x serves as exclusive licensee from Prognosys—U.S. Patent Nos. 10,480,022; 10,662,468; 11,001,879; 11,549,138; and 11,761,030. Curio has promised to “vigorously” defend itself against the lawsuit, adding: “We are confident that we do not infringe the patents that 10x is asserting against us and believe that they will be found invalid.”

Speaking on GEN’s “Close to the Edge”, Saxonov defended 10x’s series of patent lawsuits against competitors.

“We see ourselves as an R&D engine, ultimately. And when we invest in innovation, into new product development, we’re very diligent to make sure we can also protect it and protect our customers… Once you bring awesome products to market, you have to protect them. And that’s what we’re doing. That’s what allows us to then keep investing into more innovation to bring more technology to market.”

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