OVerview
We placed TXG on our long bench as an accelerating growth story, with 70% of their revenue from academic labs, and largely unaffected by COVID-19, at least compared to other stocks. Today we spoke to a core lab director at a major genome and academic research center to collect some additional anecdotes on TXG. We touched on a number of topics in addition to TXG's single cell sequencing platform and came away with some helpful information on COVID testing, liquid biopsy (GH), GRAIL, and minimal residual disease (NTRA). We are incrementally less excited about the TXG TAM in terms of system placements and total spending in the longer term as single cell sequencing may be limited by the cost and data handling issues, and the scientific knowledge these experiments generate appear likely to find their way into the clinic on someone else's platform. Based on what we learned, we should be able to build and refine some tracking tools based on NIH grant data.
The genome center is testing lab workers for COVID-19 using a RT-PCR test 2x per week while also providing services to companies in the surrounding area. There is building pressure to "get back to real science" as grant funding needs to be spent before Project End Dates.
Field Notes
- 10x made single cell sequencing much easier with their system; easy to use, reagents, supply chain, bundled package
- Knock off is not the hard part, but it will be hard to move away from them as they are increasingly the standard
- Single cell sequencing allows needed resolution a typical sequencing experiment can't provide on a tumor sample, for example
- Expression profiling at the single cell level allows for tracing genetic changes over time
- Heterogeneity is lost using whole tissue sample, an aggregate of all clones in a tumor
- Makes it possible to identify key genetic variants, compare across tumor types and individuals at the genetic level
- Compare tumor in the same person over time, similarities in tumors across patients and different cancer types
- "There is quite a lot of heterogeneity" in tumors
- Potential to expand existing therapies approved for one cancer type to others based on mutations present in the tumor
- Use cases of variant detection, tumor profiling, minimal residual disease monitoring
- Post processing, "cleaning up the data," "noise control" an important but difficult step
- Not all labs have access, too expensive to do on a large scale
- Data handling is similar to the early days of whole genome, which are common among labs and third party providers
- "we are in the very early days of single cell sequencing"
- Clinic application is a ways off, but "what we are learning" can be applied
- Cost may range around $10K for a "chunk of tissue" down to $2K for a smaller experiment, vs $200-$500 for sequencing
- 10X experiments can be "a bit finicky" so may not be appropriate outside of genome centers and others with know-how
- An experiment may take several months to generate data and several more to a result
- Methylation patterns "definitely emerging" to identify "pre cancer", preserved in blood
- GRAIL is being followed closely
- Minimal residual disease work being done "the right way" in their lab, but had not seen NTRA's product
- Medical policy for early detection of cancer is going to be a very difficult topic, access, interpretation, downstream costs
- Who gets tested, what follow up is offered, what does the data mean and impact to patient outcomes, all hard questions
- Lab never really shut down as they had been a COVID testing site
- Current capacity for 100K samples per day, RT-PCR test
- Employees are tested for COVID 2x per week
- RT-PCR COVID test is~$35 cost
- Long reads are really helpful for structural information which has helped in clinical situations, understanding of disease
- Long read is a niche activity
- 10x is "already in most university labs "around here"
- COVID has dominated lab work, but there is pressure to get back to "real science"
- NIH is not expected to extend "Project End" dates which means there will be high pressure to spend before expiration
- "We will ramp back up quickly" post COVID
All data available upon request. Please reach out to with any inquiries.
