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Fluidigm's Q1 Revenues Lifted by 'Healthy' Single-cell Genomics Market, 'Strong' Japanese Interest


NEW YORK (GenomeWeb) – Fluidigm continues to profit from sales of its C1 Single-Cell Auto Prep System. The company this week reported organic revenue growth of 58 percent, driven largely by sales of the C1 as well as the BioMark HD Systems bundled together with it.

When including contributions from DVS Sciences, the mass cytometry firm Fluidigm bought during the quarter, the South San Francisco, Calif.-based firm's revenues grew 77 percent year over year. A full recap of the company's earnings can be found here.

Fluidigm has carved out a place for itself in the single-cell genomics market since it launched the C1 in 2012. The automated instrument isolates, lyses, and preamplifies nucleic acid from single cells. Using the C1, customers can capture and prepare 96 individual cells for analysis per run. And according to CEO Gajus Worthington, the firm expects its success in the market to continue.

"The single-cell genomics market is very healthy," Worthington said during this week's earnings call. "There is new and important science as a consequence of experimentation at the level of the individual cell, and this in turn is attracting more researchers and more funding into this arena."

Worthington relied on a number of metrics to back up his assessment. He noted that the firm's single-cell genomics revenues more than doubled year over year. The firm's organic instrument revenues rose 62 percent in Q1 as the firm "shipped record numbers" of C1s and BioMarks to single researchers.

"This is particularly noteworthy, given that this occurred in Q1, which in previous years has always been lighter than Q4 of the previous year," he said.

CFO Vikram Jog said on the call that Fluidigm's total installed instrument base increased to 1,072 at the end of the first quarter, consisting of 633 analytical systems, including 77 proteomic systems, and 435 preparatory systems, including the C1. According to Jog, the bulk of C1s sold were to new customers.

About a fifth of C1 sales were bundled together with a BioMark, and 80 percent of BioMark sales were motivated by single-cell research, Worthington said. The adoption of the BioMark, which enables high-throughput real-time PCR-based gene expression and genotyping, reflects a trend in the market of large-volume studies.

"We are having discussions with a number of academic groups who are interested and pursuing 100,000-cell projects utilizing our existing single-cell genomics portfolio," said Worthington. "The scientific ramifications of these studies are broad, and we expect they will stimulate others to substantially increase the number of cells they analyze per sample."

Jog commented that there are multiple high-volume initiatives that are "currently working through the various funding and approval processes," and that these efforts, as well as the addition of new customers, will drive C1 adoption and consumable growth in the future.

Another metric Fluidigm has used to gauge its presence in the market is the number of publications that reference its tools for single-cell research. Worthington said that the total number of publications was 156 at the end of Q1, including 35 that relied on mass cytometry.

When Fluidigm launched the C1 two years ago, customers could profile expression in 96 wells across 96 mRNA targets on the BioMark HD. Since the launch, it has also added protocols for single-cell mRNA sequencing and microRNA expression in conjunction with the BioMark HD, and, more recently, single-cell targeted DNA sequencing.

Worthington said that Fluidigm remains on track to launch single-cell whole exome and single-cell whole-genome sequencing protocols during the second half of this year.

Given its Q1 performance, Worthington affirmed the company's forecast of a $200 million single-cell genomics market by the end of 2015, with a projected annual growth rate of about 50 percent.

Bullish about Japan

Jog broke down the firm's revenues as a percentage of total product revenues on the call, revealing relatively strong sales in Asia. Sales to US customers accounted for 44 percent of Fluidigm's Q1 revenues, with European sales contributing 25 percent. Sales to Japanese customers made up 17 percent of the firm's revenues, with sales to Asia-Pacific customers and those in other geographies accounting for the remaining 8 and 6 percent, respectively.

Jog noted that by region the firm's Japanese revenues grew the fastest, and credited a "uniquely favorable funding environment" in the quarter. The Japanese Ministry of Education, Culture, Science, and Technology recently announced a funding program dedicated to single-cell genomics analysis, a move that should bolster the firm's single-cell research-related sales going forward.

Worthington noted that Japan is the third country after the US and the UK to specifically fund single-cell research, and said that the new program was "initiated in part to respond to competition" from those countries. He also said that ministry referenced the Genome Institute of Singapore's Single-Cell Omics Center, which Fluidigm and GIS opened together last year, in its rationale for making the funding available.

"It is for research," Worthington said of the Japanese funding opportunity, "and it's much more dedicated towards actual experimentation as opposed to technology development, although it appears that there is some funding for technology development," he said. "We didn’t know what’s going to happen in Japan, but frankly, we expect that there will be more of this," he added.

The firm's improved performance in Japan is in sharp contrast to its showing there in as recently as the second quarter of 2013, when just 2 percent of its revenues were generated in the island country.

Worthington noted that the firm had made management changes in Japan, a decision that appears to have paid off.

"Japan has been really strong for us, and frankly a lot of that has to do with our change of management there," Worthington said. "Certainly some of the success is a result of the funding environment there, but we're very bullish about Japan going forward."