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10X Genomics Emerges With $80M

10X Genomics first product (Image Credit: 10x Genomics)

Making Illumina’s industry-leading gene sequencing machines better? There’s an app for that. That’s the shorthand pitch from fresh-from-stealth sequencing company 10X Genomics, which is unveiling itself today with $80 million in venture funding. It has already raised two rounds, the latest being a $55.5 million Series B led by Foresite Capital Management, with Venrock, the Series A lead, and others joining.

The Pleasanton, CA-based company’s product is a $75,000 box about the size of a toaster (pictured) that hooks up to any Illumina (NASDAQ: ILMN) machine and—according to its inventors—gives researchers fuller, more accurate genetic information than they could previously squeeze from a DNA sample.

“We allow you to use existing sequencing technology, but to upgrade and reconstruct the full sequence,” said 10x Genomics founder and CEO Serge Saxonov. “You don’t need to swap out machines. Our box is incremental.”

The news comes amid what seems like near-constant shake-up in the sequencing and medical diagnostics fields. One of the leaders in whole-tumor sequencing, Foundation Medicine (NASDAQ: FMI), announced yesterday it would join forces with industry powerhouse Roche, with Roche buying a majority interest.

With its as-yet-unnamed instrument, 10X aims to bridge the gap between the “short read” sequencing technology used by Illumina and Life Technologies, a division of Thermo Fisher Scientific (NYSE: TMO), and the more elusive “long read” technology that companies like Pacific Biosciences (NASDAQ: PBIO) have struggled to popularize.

Saxonov declined to get too specific, but here’s a high-level description of what their machine does. It takes a DNA sample and breaks it into hundreds of thousands of fragments—”short reads”—just as the current state of the art technology does. But current technology can only deal with a sampling of those fragments, extracting the code, then piecing them back together in a best approximation.

10X doesn’t require as large a DNA sample, according to VP of marketing Rob Tarbox, so with a smaller number of fragments, its instrument can assign each one an oligonucleotide “tag”—think of it as a barcode—and its own “vessel” that preserves and allows the tracking of each fragment. As many as 200,000 of these picoscale vessels can fit into a single well on a disposable microfluidic chip.

Like software developers who roll out their app first for the most popular smartphone, their box is compatible only with Illumina sequencers for now. “They have particularly dominant share in the high throughput end of the market,” said Tarbox. “As we see the response from the market, we can adjust quickly to enable support for other providers.”

10X did not collaborate with nor receive any help from Illumina, said Tarbox.

Saxonov previously was founding architect at 23andMe, where he ran R&D. He and others were also executives at QuantaLife, a digital PCR company.  10X’s chairman is John Steulpnagel, an Illumina cofounder and its original CEO, who has also been involved in bioinformatics firms Ariosa Diagnostics, recently acquired by Roche, and Sequenta, which was bought by Adaptive Biotechnologies last week.

Saxonov described a key lesson he learned at 23andMe that has driven his vision for 10X Genomics: When you start to interpret data, and the data are not good enough, you try to do better algorithms to analyze the sequencing. “But at some point,” he said, “you realize you need to change the data [you gather] to interpret things in a more powerful way.”

In addition to providing more complete sequencing data, the company’s technology will give researchers a “better set of binoculars” to interpret it, Saxonov said. For example, he said, “large rearrangements in the genome—mutations from one region of the genome to another—are apparently quite common and drive disease states, but they are hard to see with short-read sequencing.”


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