A big rise, a big drop

Editor’s note: This article comes from WeChat public number” Arterial Network” (ID: vcbeat), author Gao Daolong.

The arterial network was informed that on September 12th, the United States time, the genetic sequencing unicorn enterprise 10x Genomics and the invisible orthodontic field unicorn company SmileDirectClub officially landed on the NASDAQ.

The stock trading codes for 10x Genomics and SmileDirectClub are “TXG” and “SDC” respectively. Two stocks closed at the early morning of Beijing time, with a big rise of 35.26% and a big drop of 27.52%.

10x Genomics

10x Genomics (hereinafter referred to as 10x) The IPO publicly issued 10 million shares of common stock at $39 per share, higher than the expected price of $31-35. Although 10x encountered a tough patent problem, in the market debut on Thursday, the highest soared 49%. The stock opened at $54 and reached $58 per share at midday, eventually closing at $52.75, up 35.26%, with a total market capitalization of $4.898 billion.

10x Genomics is a leader in genetic testing. Founded in 2012, Genomics is headquartered in California, USA, with offices in more than ten countries including the UK, France, and Switzerland. The company’s revolutionary DNA sequencing technology can help people identify genomic information that was previously inaccessible, thus accelerating the development of biogenetic science.

About the detailed introduction of 10x, the arterial network was published in August when the company submitted the IPO prospectus. 10x Genomics: storm seek a listing, the risk of patent or into the biggest risks” < /a>One article.

10x Genomics was founded by Serge Saxonov and Ben Hindson. Co-founder and CEO Serge Saxonov is the soul of the company’s development process, with a bachelor’s degree in applied mathematics and biology from Harvard Medical School and a Ph.D. in biomedical informatics from Stanford University. Co-founder and CSO Ben Hindson holds a Ph.D. in Chemistry from Deakin University in Australia and was the co-founder and Chief Scientific Officer of QuantaLife. He has published numerous articles in the field and holds several patents for testing and instrumentation.

10x is a rising star in the field of single cell sequencing. 2015, 10x Genomics at the genomic biology and technology progress 16th (AGBT) launched its first product –DNA sequencing GemCode genomics platform. The product includes instruments, chemical kits, and informatics software that separates DNA samples into “gems” through a custom microfluidic system that is an upgrade to existing short-reading sequencers that provide haplotypes and structures. Variation and long fragment information.

In 2016, 10x introduced the heavyweight Chromium system, a set of molecular barcode and analysis systems based on microfluidic technology that simultaneously obtains 1000-10000 cell expression information for cell population division. Detection of differences in gene expression with cell populations is a golden method for tumor cell heterogeneity, immune cell population detection, and embryo development studies.

plus its software system can fully dock the Illumina sequencer, 10x at the 2016 JP Morgan Conference, became the biggest dark horse in the single-cell transcriptome sequencing field, Illumina reached a strategic cooperation agreement.

From 2012 onwards, 10x received a total of six rounds of financing from the seed round to the D+ round. In the D+ round of financing on January 7, 2019, the valuation has reached $1.28 billion.

10x in 2019In the first half of the year, it generated $109.4 million in revenue, an increase of nearly 85% from $59.2 million in January-June 2018. For the full year of 2018, the company’s revenue more than doubled, from $71.1 million in 2017 to $146.3 million.

In fiscal year 2018, 10x total revenue was $146.3 million and net loss was $112.5 million. The company also noted that its 2018 net loss was related to the $62.4 million related to the “Intellectual Property Acquisition for R&D” and the $38 million legal fee for the fourth quarter of 2018. In the first half of the 2019 fiscal year, 10X spent $15.9 million on patent litigation fees.

Not only is it popular overseas, but 10x is also popular in China. The price of the Gemcode platform and the Chromium platform are $75,000 and $125,000, respectively, which is quite affordable compared to other big guys. What’s more, Chromium can also perform single-cell sequencing. In China, 10x also has a large number of fans such as Huada Gene, Berry Gene, Boao Jingdian, Nuohe Zhiyuan, Annoyouda, Ouyi Bio, and Fraser Gene.

However, while the product is hot, 10x has also encountered a troublesome patent storm. In February 2015, “Raindance” and the University of Chicago filed a lawsuit against 10x in the US District Court for Delaware, alleging that 10x products using GEM microfluidic chips were almost infringing seven US patents owned or exclusively licensed by Raindance (“ Delaware Action”). In May 2017, Bio-Rad replaced it as a plaintiff after the acquisition of Raindance.

In November 2018, the jury agreed that all single-cell and strand-reading genomics products sold by 10x deliberately infringed three US patents granted to Bio-Rad by the University of Chicago. According to the ruling, 10x will need to pay Bio-Rad $23.9 million in damages. At the end of September, the final ruling of the dispute will be announced, 10x may not be able to sell GEM microfluidic chips in the United States, and may seriously affect the future stock price trend of 10x. Just one day before the listing, Bio-Rad launched a new lawsuit against 10x.

10x Genomics said the benefits of the IPO will be used for general corporate purposes, including “working capital, operating expenses and capital expenditures.”

“In addition, we may use part of the net proceeds from this offering to acquire business, products or technology. However, we currently do not have any major acquisition agreements or commitments,” the company added.

SmileDirectClub

SmileDirectClub issued 58.5 million Class A common shares this time. The issue price is $23 per share, which exceeds the company’s preliminary forecast. SmileDirectClub initially expects prices to be between $19 and $22 per share. This brings the company’s valuation to $9 billion, much higher than the $3.2 billion that was valued in its latest round of financing 11 months ago. According to a person familiar with the matter, the above pricing is due to oversubscription.

However, the stock suffered a sharp fall on the first day of trading, and fell 27% on the 12th to close below $17. As of now, the market value is less than $6.5 billion.

SmileDirectClub plans to raise $1.3 billion in funds, which will be used to repurchase shares held by pre-IPO investors and fund international expansion and R&D.

SmileDirectClub was founded in 2014 to sell orthodontic appliances directly to consumers on the website and on SmileShops, starting at $1,895 for two years.

For its core business model, the arterial network has been reported in detail “Skip the dentist ToC, this invisible orthodontic company is now worth 400 million US dollars, set up a five-year IPO”, mainly as follows:

  • First, the price is low. Traditional orthodontics costs $5,000-$8,000, and SmileDirectClub costs only $1,895.

  • Second, high convenience. Traditional orthodontics requires 10-15 interviews, with a period of 12-24 months. SmileDirectClub is fully supervised and treated through the remote medical platform SmileCheck, and the time is shortened to 5-10 months. Most members buy a holder every six months or so.

  • Third, high accessibility. American orthodontics are the sameMissing, 40% of counties have no orthodontists, and orthodontics can be achieved through orthodontic kits and 300+ stores across the US, Canada, Australia, and the UK.

  • Fourth, pay for diversity. SmileDirectClub also offers patients two simple payment methods: a one-time payment or SmilePay program, which is a $250 down payment and an average monthly payment of only $85, which is convenient for monthly installments and does not require a credit check. In addition, starting in 2019, we have established contacts with insurance companies such as United Healthcare and Aetna. In the first 30 days, if you are not satisfied for any reason, you will be refunded in proportion.

Founders Alex Fenkell and Jordan Katzman hope to subvert the orthodontic industry with cheaper orthodontics, more convenient services, and eye-catching TV and social media advertising. Based on the stock price after the first day of trading, Katzman’s equity value is $1.3 billion, and Fenkell’s equity is worth $1.2 billion. This made them quickly become the youngest two billionaires in the country.

According to the prospectus submitted last month, the company’s sales last year were $423.2 million, an increase of 190% from $146 million in 2017. However, the net loss last year was $74.8 million, which is 2017. The net loss is more than twice.

For SmileDirectClub, getting new customers is expensive. Last year, SmileDirectClub spent $289.3 million on marketing and general expenses.

Information shows that Jordan Katzman’s father, David Katzman, funded the seed round of SmileDirectClub through his venture capital firm Camelot Venture Group, and is the company’s chief executive, 59 years old, with 31% of Class B shares, value About 1.6 billion US dollars. Camelot also invested in other DTC model brands such as 1-800-Contacts and Quicken Loans.

In July 2016, SmileDirectClub received an A round of investment from Gin Lane. In October 2018, SmileDirectClub announced a financing of $380 million. Clayton, Dubilier & Rice led the campaign, Kleiner Perkins and Spark Capital participated.

SmileDirectClub’s previous prospectus shows that there are six out of ten counties in the United States without orthodontists. In just 5 years, SmileDirectClub has developed very rapidly with its model.

In 2016, the first factory was opened in Tennessee, and the first SmileShop landed.

In 2017, the flagship SmileShop store opened in West Sea, USA.

In 2018, nearly $400 million in financing was completed and expanded into the Canadian market.

In 2019, the market expanded to Australia and the UK, and reached a relationship with CVS, Walgreens, United Healthcare and Aetna to sell impression kits in the store.

There are currently 700,000 users, 300 SmileShop stores and 5,000 employees.

David Katzman’s brother, Steven Katzman, is the chief operating officer. After the release, the Katzman family will retain a total of more than 65% of the voting rights of the three.

The reason why SmileDirectClub can develop so quickly is that the company is constantly innovating around clinical orthodontic effects, low cost and user satisfaction. Of course, because of bypassing the dentist’s face, it has also received many questions and complaints.

Not only is SmileDirectClub, but currently commercial supermarket Wal-Mart has also opened a convenient dental clinic in the supermarket, and the pattern of subverting traditional orthodontics continues to emerge.

After listing, SmileDirectClub will continue to expand rapidly, opening up international markets such as Canada, Australia and the UK. The recent news is that it has introduced a braces that only need to be worn at night.