Wednesday, Illumina Inc (NASDAQ:ILMN) acquired Fluent BioSciences to expand its reach in single-cell analysis and multiomics research for an undisclosed consideration.

Amid this M&A deal, 10x Genomics, Inc (NASDAQ:TXG) shares are trading lower.

William Blair writes that Fluent's PIPseq single-cell technology does not require an instrument, and costs per cell is at least 50% less than 10x and is the cheapest on the market, citing a recent bioRxiv preprint.

William Blair highlights that cost reduction has become crucial in the increasingly crowded single-cell market. Bundled offerings will further strengthen Fluent's competitive edge with low-cost positioning. While Illumina emphasizes its commitment to the NGS platform, it seems likely that the Illumina NGS ecosystem will be strongly encouraged to use Fluent's single-cell prep kits.

Given that 10x Genomics kits are mainly used with Illumina NGS systems due to their widespread use, an analyst predicts that Chromium (10x's single-cell business) revenue will decrease by 10%.

Looking at the performance characteristics of Chromium compared to others in the market, William Blair writes that 10x still has the best solution, but it is still too expensive.

10x has typically traded at higher valuations due to its strong growth and market leadership. However, the current valuation reflects concerns about the challenging single-cell market and the uncertain future of spatial technologies, which are promising but still unpredictable. Therefore, William Blair rates the stock as Market Perform.

Deutsche Bank has downgraded 10x Genomics from Buy to Hold and lowered the price target from $55 to $25.

Price Action: TXG shares are down 13% at $15.89 at last check Wednesday.

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