Met by strong investor demand, the biotech company increased both the size and price of its initial public offering in the days before the listing, ultimately selling 10 million shares for $39 apiece to raise $390 million. Once its stock did begin trading on the Nasdaq, it promptly rocketed up more than 40%. The stock settled at $52.75, a 35% first-day uptick, giving 10x a market cap at day's close of about $4.9 billion.
Looking at those numbers, it'd be hard to tell that a 10x rival filed a lawsuit against the company mere hours before Thursday's opening bell—a rival that's already emerged victorious in two other legal battles with the California-based business.
On Wednesday afternoon, Bio-Rad Laboratories, a publicly traded life sciences company, announced that it had filed a patent infringement lawsuit against 10x, alleging that the company's Next GEM technology for analyzing DNA and RNA infringes on certain Bio-Rad patents. Bio-Rad notes in a press release announcing the suit that it's already been awarded $34.4 million in damages from two other legal actions against 10x, one case that was decided last November and another that was ruled on last month.
Co-founded in 2012 by a pair of PhDs, 10x is a developer of scientific tools and software used to analyze biological systems and discover new insights about DNA, genome sequencing and more. Bio-Rad provides similar services, building scientific products for life science research and diagnostics. It's much older and more established than 10x, though: Founded in 1952, Bio-Rad generated more than $2.2 billion in revenue last year.
For its part, 10x hauled in $146.3 million in revenue during 2018, more than doubling its $71.1 million figure from 2017, according to the company's IPO prospectus. That number's on pace to rise again in 2019, with $109.4 million in revenue banked through 1H. 10x is also on track to reverse a huge net loss of $112.5 million from 2018—through the end of June 2019, it had logged a relatively modest loss of $14.5 million.
Last year's spike seems to have been driven mainly by major expenditures in research and development. But the more than $30 million in accrued contingent liabilities on 10x's 2018 balance sheet is a sign that the lawsuits from Bio-Rad have also taken a fiscal toll.
Public investors didn't seem too concerned about any legal woes on Thursday, as 10x became the latest unicorn to experience a highly profitable first day of trading during 2019. Prior to its listing, 10x had raised well over $300 million in VC funding, including a $35 million round in January at a $1.28 billion valuation. With its IPO, then, 10x has increased its on-paper worth nearly fourfold in the span of about eight months.
That's welcome news for a slate of VC backers that includes Foresite Capital Management (which holds an 18.3% post-IPO stake), Venrock (17%), Paladin Capital Group (11.5%) and Fidelity (11.3%). Together, those four firms own about 58% of the company, valuing their combined holdings at about $2.8 billion.
Venrock led 10x's Series A round back in 2013, helping channel $22 million into the company at a $56 million valuation. That adds up to a valuation increase of about 90x in the span of six years.
Those are the sorts of returns that could make a few million in legal judgments a whole lot easier to swallow.
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