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10x Genomics (NASDAQ:TXG) stock slid 14% Wednesday amid news that Illumina (ILMN) has acquired single cell analysis technology company Fluent BioSciences and a downgrade by Deutsche Bank.
The investment bank cut its rating of 10x Genomics to hold, stating that heightened competition was “eroding the inelastic demand that 10x Genomics’ market-leading single cell platform once enjoyed.”
Deutsche Bank said it sees growth for the company’s Chromium product remaining under pressure in the near term. It believes Chromium will sustain “greater volume declines and/or pricing pressure than current management expectations, and thus perpetuate 10x Genomics’ margin degradation.”
The bank sees Illumina’s acquisition of Fluent as increasing the competitive threat.
“Since Illumina’s NGS instruments are part of the workflow to sequence the single cell libraries prepared upstream on Chromium and other single cell kits, Deutsche anticipates ‘end-to-end’ and ‘bundling’ go to market strategies with Illumina’s new vertical offering,” the bank added.
Deutsche lowered its price target for 10x Genomics to $25 from $55.
Illumina announced late Tuesday that it had acquired Fluent to expand into the single cell research market. The deal closed on July 9.