This article has been updated with information from 10x Genomics' earnings call.
NEW YORK – 10x Genomics will be discontinuing its base model of the Chromium single-cell sample preparation instrument, the company said on Thursday.
"Throughout the year, we've seen ongoing demand for Chromium X Series instruments as both new and existing customers chose the X Series for its high performance, extended capabilities, and series-specific assets," 10x CEO and Cofounder Serge Saxonov said on a conference call with investors following the release of the firm's Q4 and full-year 2022 financial results. "In fact, after several consecutive quarters of customers overwhelmingly opting for X Series instruments, we made the decision during Q4 to discontinue future sales of our legacy Chromium Controller."
In an email, a 10x spokesperson said the firm is committed to supporting the Chromium Controller installed base for "several years," and suggested that the Chromium iX instrument would become "a reasonable entry point moving forward."
The move comes as the firm is trying to make its Flex assay the go-to product for single-cell gene expression analysis using Chromium. "If you want to do straight up gene expression, Flex should be the default choice," Saxonov told GenomeWeb last week at the Advances in Genome Biology and Technology conference.
Last year, 10x announced that this assay will only be available on the Chromium X series instruments and later dropped the price of a Chromium Controller to $35,000 in coordination with the launch of the X series. The upgradable Chromium iX can process tens of thousands of cell per run.
10x Genomics reported after the close of the market on Wednesday a 9 percent increase in fourth quarter revenues, driven by consumables sales and partially offset by a decrease in revenues in China.
For the three months ended Dec. 31, 2022, the Pleasanton, California-based single-cell and spatial technologies firm reported revenues of $156.2 million, up from $143.5 million during the prior-year period and beating the average Wall Street estimate of $148.7 million.
Consumables revenues in the fourth quarter were $131.6 million, up 8 percent from $122.4 million, a year ago, while instrument revenues grew 15 percent year over year to $22.3 million from $19.4 million. Service revenue increased 29 percent to $2.3 million from $1.8 million in Q4 2021.
Q4 revenues from the Americas were $85.6 million, up 11 percent year over year. Revenues from Europe, the Middle East, and Africa totaled $43 million, up 24 percent year over year. However, revenues from Asia Pacific were $27.6 million, down 13 percent year over year, primarily due to COVID disruptions.
The company's net loss for the quarter was $17.2 million, or $.15 per share, compared to a loss of $18.4 million, or $0.16 per share, in Q4 2021, and beating the average Wall Street estimate of a $0.31 loss per share.
The firm's Q4 R&D expenses rose 3 percent to $63.6 million from $61.9 million a year ago. Its SG&A expenses rose 13 percent to $78.9 million from $69.9 million. Justin McAnear, 10x's CFO, attributed the rise in spending to higher personnel-related costs.
For full-year 2022, 10x's revenues increased 5 percent to $516.4 million from $490.5 million, beating the average Wall Street estimate of $$508.1 million.
Full-year consumables revenues were $435.6 million, up 4 percent year over year from $418.7 million in 2021; instrument revenues were $72.4 million, up 12 percent from $64.5 million ; and service revenues were $8.4 million, up 16 percent from $7.3 million.
By region, revenues from the Americas were $293.8 million in 2022, up 11 percent year over year; revenues from Europe, the Middle East, and Africa revenues were $117.1 million, up 8 percent year over year; and revenues from Asia-Pacific were $105.6 million, down 10 percent from 2021.
McAnear said the firm sold 1,119 instruments in 2022, bringing the total installed base to 4,630 as of Dec. 31. Customers bought 316,000 reactions worth of consumables, up from approximately 310,000 in 2021.
The firm's net loss for the year was $166.0 million, or $1.46 per share, compared to a net loss of $58.2 million, or $0.53 per share, in 2021.
The company's 2022 R&D expenses grew 25 percent to $265.7 million from $211.8 million in the prior year, "attributable to increased personnel-related costs including stock-based compensation expenses, laboratory materials, supplies, expense equipment, and facilities costs," McAnear said. SG&A expenses grew 16 percent to $298.3 million from $257.6 million in 2021, due to increased personnel-related costs, including stock-based compensation expenses, as well as marketing expenses and facilities costs.
As of Dec. 31, 10x had $219.7 million in cash and cash equivalents, $210.2 million in marketable securities, and $2.6 million in restricted cash.
10x Genomics expects full-year 2023 revenue to be in the range of $580 million to $600 million, representing 12 percent to 16 percent growth over 2022 revenue. Saxonov noted that 10x expects Q1 revenues in China to be down about 20 percent, year over year.
In Thursday afternoon trading on the Nasdaq, shares of the company were up 13 percent at $52.42.