How 10x Genomics Could Help Change How Parkinson's Disease Is Treated

10x Genomics (TXG -0.79%) markets technology that is being used to research many diseases. Its platforms are used by researchers across the world. In this video recorded on March 11, 2021, Motley Fool CEO and co-founder Tom Gardner talks with 10x Genomics CEO and co-founder Serge Saxonov about what types of organizations are using his company's technology and how 10x is helping change how Parkinson's disease is treated.

Tom Gardner: I guess I'd like to hear Serge from you, who all is using your technology. Then I'm going to my second, we're probably going to go two-by-two on questions. Then I will turn it back to Keith.

My two questions will be, who all is using the technology? Then maybe let's take a single example. Let's take Parkinson's disease and hear what you think might happen in the future. What's happening with it now, if anything, hear how you think this technology might help us come up with some new solutions to an affliction like Parkinson's. So who's using it? Then that simple example.

Serge Saxonov: Our customers, for the most part, are academic researchers, scientists who are trying to make discoveries. These are research institutions, universities, genome centers, colleges. There's different surveys that get made of what are the top researching institutions in the world. We're in all of them, like the top 100 institutions, for example, and it's one of those things where we have instruments that we sell to go into those institutions.

Usually, there's many, many labs in all of them, and so we tend to over time we grow both those in terms of the number of institutions that purchase our products, but also the number of labs within those institutions that purchase our products.

Academia is a huge part of our business. Also a big and rapidly growing part of our business is pharmaceutical companies and biotechnology companies, so companies that are developing therapies and drugs and vaccines to treat diseases. They tend to follow the academia, those academics almost by definition, they'd like to jump into new technologies because that allows them to be on the cutting edge to make discoveries in front of others.

Pharmaceutical companies see what happens in the academia world and then they follow and adopt new technologies, and we're seeing that happening now. By the same measure, if you look at top 20 global biopharmaceutical companies for example, they're all customers of ours and for the most part, large customers of ours.

But you also see a very long tail of smaller biotechnology companies that are working on developing drugs for particular indications, that they are also customers, so that's to give you a broad spectrum. I guess one other customer type is more of hospitals or at least academic hospitals, where people are starting to think in terms of how this technology might apply in the clinical setting. This we see as a huge part of our future, but it is early days for now, although those customers exist as well.

Tom Gardner: Before you take that example of Parkinson's, with those customers that are buying the equipment and then they are buying the consumable side, maybe they're getting services as well in there. Can you just talk about the price point of the equipment and how that pricing and economics play out?

Serge Saxonov: This business model is usually oftentimes called razor/razor blade model, although our razors are relatively expensive and razor blades are as well. The instruments that we sell range in price roughly from $75,000 to $100,000 and we have one version that's over $200,000. They are substantial pieces of equipment, although fairly modest on the scale of what researchers typically have to pay for capital equipment.

Then our customers have to buy reagents and cartridges to run experiments on those instruments. Those range in prices roughly from $1,000 to maybe a few tens of thousand dollars per experiment, so those are fairly substantial expenditures, but relatively modest and relative to certainly the value that they get back from us.

Maybe on the question of Parkinson's as an example. When we look at the range of diseases, which ones we understand and which ones we are far along in understanding, which ones we're early in understanding, Parkinson's, and I'll say, newer generation, in general, is pretty early in terms of our understanding of what causes those diseases, and then how we are going to treat them, but first, you need to understand the causes.

We have some idea that there's multiple subtypes of Parkinson's, so it's not necessarily always the same thing. But I think the main imperative is to understand the fundamental biology and what really causes, and what is happening in there.

There's actually a lot of interest with the neurodegeneration, in general, using our tools. Lots of scientists are using them, where scientists would either take diseased brains of patients who passed away to analyze them and compare them to healthy tissues, or more commonly doing experiments in mice that have Parkinson's-like symptoms, mice that are made to have these kinds of diseases.

What people look at is, well, you look at these brains and you look at what is happening inside the cells of those brains, what genes are turned on, what are turned off, where they are turned off and turned on, and what people are learning and there's actually lots and lots of research now where you're connecting. We've known for the last 10 maybe or so years that there's some genes that are associated with Parkinson's, but we had no idea how they are.

What is the actual function? We know this thing is somehow correlated, but what is it actually doing to make the disease has been an open question.

Now, by virtue of knowing this particular gene is expressed in this cell when this particular thing happens, you can start actually deconvolving what is the path that leads you from being healthy to actually having this disease, which now tells you, at least in principle, "These are the cells you would need to target and these are the molecules of those cells you need to target at this time point if you want to prevent or reverse the course of disease."

That's broadly speaking the path to the cure from where we are now, and lots and lots of laboratories from around the world are now peeling apart different elements of that puzzle, and this is tremendously exciting. Something that was like a black box is now we're peering into it and seeing what's happening.