Healthcare stock to watch: 10X Genomics Inc (NASDAQ: TXG)

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10X Genomics Inc (NASDAQ: TXG) stock rose over 0.4% on 19th Feb, 2020 (Source: Google finance).  Gross margin has expanded to 78% for the fourth quarter of 2019, as compared to 71% for the corresponding prior year period. The increase in gross margin was mainly due to lower accrued royalties related to ongoing litigation.

The company in the fourth quarter of FY 19 has reported net loss of $7.1 million for the fourth quarter of 2019, as compared to $75.5 million for the corresponding prior year period. The company has delivered the revenue of $75.3 million for the three months ended December 31, 2019, which reflects a 49% increase from $50.6 million for the three months ended December 31, 2018. The company posted the operating expenses of $66.8 million for the fourth quarter of 2019, as compared to $110.6 million for the corresponding prior year period, which is a decline of 40%. The prior year period included $40.1 million of in-process R&D as well as an incremental $30.4 million in accrued contingent liabilities. The company has posted the operating loss of $8.1 million for the fourth quarter of 2019, as compared to $75.0 million for the corresponding prior year period. This includes $5.1 million of stock-based compensation for the fourth quarter of 2019, as compared to $1.1 million for the fourth quarter of 2018.

Overall in FY 19, the company has reported 68% growth in revenue to $245.9 million. The gross margin was 75% for full year 2019, as compared to 80% for 2018. The contraction in gross margin is mainly due to higher accrued royalties related to ongoing litigation which impacted cost of revenue for the full year of 2019.

Furthermore, the company has sold total of 1,666 Chromium instruments sold at the end of December 2019 and has initiated shipments of the Visium Spatial Gene Expression Solution

Moreover, during the year, the company continued to see a large and rapidly growing body of scientific publications coming out of the customers’ labs. The number of publications has more than doubled during 2019 and there are now over 700 papers where the customers have made fundamental scientific discoveries using the company’s products. Further, during the year, the company has seen major discoveries in Alzheimer’s, important studies of autoimmune diseases, fundamental breakthroughs in many types of cancers, fascinating work on age-related diseases.

For full year 2020, the company expects the revenue to be in the range of $350 million to $360 million, representing 42% to 46% growth over full year 2019 revenue.

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