Singular Genomics Systems, Inc. (OMIC)
Summary of Genomics Systems, Inc. (OMIC)
An early stage life sciences tools company developing technology leveraging novel next generation sequencing (NGS) and multiomics technologies to address the NGS market
Products will initially be sold and marketed for research use only (RUO)
Product 1 (units available in 1H 2022) is a benchtop sequencer with a menu of consumable kits that claims to produce fast and accurate genetic sequencing results
Product 2 is also a type of instrument and has an menu of consumable kits that combines single cell analysis, spatial analysis, genomics, and proteomics to be a single instrument that provides versatile multiomics solution
Customers include academic institutions, life sciences and research laboratories that conduct research, and biopharmaceutical and biotechnology companies for non-diagnostic and non-clinical purposes
Longer-term plans include seeking FDA clearance for IVD products, and corresponding clearances in other countries (i.e. devices can eventually be used to help with diagnostic, treatment, etc.)
The Opportunity
Razor-blade business model
Company is placing itself as a novel alternate in an NGS market dominated for many years by Illumina (ILMN)
Potential for large uptake by customers
NGS market and single cell, spatial analysis, proteomics markets are potentially underserved by existing genomics products and technologies
NGS market and single cell, spatial analysis, and proteomics markets are estimated to be large ($18.6 B and 17B, respectively)
The Risks (Many — Not all Listed)
Recent initial public offering (IPO)
Short-term fluctuations in company’s stock price caused my lock-up period ending (i.e. large shareholders wanting to ‘exit’ their position)
Competition include large, well-established companies such as Illumina Inc., Thermo Fisher Scientific Inc., Pacific Biosciences Inc., etc.
Company is still in early phases of its launch — limited sales and marketing and customer support experience
No experience manufacturing products at commercial scale
Asset play as company’s current valuation (~$2B) is contingent on future potential sales
NGS market and single cell, spatial analysis, and proteomics markets are highly competitive spaces
What This All Means and My Thoughts
From my research, the products OMIC are developing appear to address areas in the NGS market and single cell, spatial analysis, and proteomics markets where the larger players have not yet provided a solution for. Assuming the information about their products in OMIC’s S-1 are indeed true claims, then it would be prudent for someone more interested in OMIC to cross-check if and when the major competitor(s) (namely Illumina) plan to address this ‘gap’ that OMIC claims to exist in the markets OMIC is targeting before putting some financial dough on the line.
For long-term, bullish investors, Singular Genomics Systems, Inc. (OMIC) is a fresh IPO that gives individuals another opportunity to enter into the NGS and multiomics markets. Regardless, optimism should be balanced with a dose of reality. OMIC is still growing and has not yet launched its product. Even when the product is launched commercial success is not guaranteed. If you think OMIC’s offerings will better serve customers than current available products (likely) AND sales will be great despite competition (to be determined) over the long-term, then time to roll the dice.
For the cautious, bullish individual, it would be prudent to revisit the company after its first quarters of sales are reported before initiating a position. However, the risk of taking this approach is that you will be paying a premium for this certainty if sales prove to be great.
Individuals that think OMIC’s offerings (i.e. speed, specificity, efficiency, etc.) are not differentiated from the competition (ex. Illumina) and think OMIC will not be able to compete well with available products (to be determined) can consider shorting OMIC to the ground.
Personally, I will not be touching OMIC until I at least further review the competition and their products. Although, I am already capped out with the number of life sciences technology names I want to own in my own portfolio, depending on what I find after more research may change my current opinion.
For detailed information, then please refer to the company’s latest 10-K (or in this case the earliest S-1) on sec.gov.
Author’s Note
If you enjoyed this short write up and want me to do something similar for a small biotech/pharmaceutical company you are interested in, then let me know!
Disclosure
As of the date of this post, I do not own OMIC stock. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it from any related parties mentioned in the article, directly or indirectly. I have no business relationship with any company whose stock is mentioned in this article.
