Ladies and gentlemen, thank you for standing by and welcome to the 10x Genomics' Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions] Thank you.

I would now like to hand the call over to your speaker today, Ms. Cassie Corneau, Investor Relations and Strategic Finance. Please go ahead.

Cassie Corneau - Manager of Investor Relations and Strategic Finance

Thank you. Good afternoon, everyone. Earlier today 10x Genomics released financial results for the fourth quarter and year ended December 31, 2020. If you have not received this news release or if you would like to be added to the Company's distribution list, please send an email to investors@10xgenomics.com. An archived webcast of this call will be available on the Investor tab of the Company's website 10xgenomics.com for at least 45 days following this call.

Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on forward-looking statements. Additional information regarding these risks, uncertainties and factors that could cause results to differ appears in the press release 10x Genomics issued today, and in the documents and reports filed by 10x Genomics from time to time with the Securities and Exchange Commission. 10x Genomics disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise.

Joining the call today are Serge Saxonov, our CEO and Co-Founder; and Justin McAnear, our Chief Financial Officer. In addition, Brad Crutchfield, our Chief Commercial Officer will be available for Q&A.

With that, I will now turn the call over to Serge.

Serge Saxonov - Chief Executive Officer and Co-founder

Thanks, Cassie. Good afternoon and thank you for joining our call to review our fourth quarter and 2020 results. During today's call, I will provide a brief summary of our fourth quarter and full year results. Next, I will discuss the opportunities that lie ahead and how we're focusing our efforts across our three technology platforms to build great products that deliver amazing insights for our customers. I will then turn the call over to Justin for a more detailed look at our financials, including our outlook for the year. I would like to start by thanking our employees for their hard work and dedication through an extraordinary difficult year.

2020 brought significant challenges, change and sacrifice, but I continue to be impressed by and grateful for our team's resilience and commitment to our customers and to each other. Despite all the challenges, we made important progress across our business in 2020. To start, total revenue grew 22% over the prior year $299 million. In the fourth quarter, revenue grew 49% over the prior year as our business continued to recover from the impact of COVID. We grew our installed base by 45%, selling 746 additional instruments. We continue to expand our customer reach and our products have now been adopted by all of the top 100 research institutions and top 20 pharmaceutical companies.

Our customers published more than 1,500 peer-reviewed papers, bringing the total to over 2,200 more than doubling the number of total publications over the course of the year. And we continue to invest in developing and defending our patent portfolio and added more than 300 new patents and patent applications, expanding our coverage of enabling technologies. We now have more than 1,000 patents and patent applications. We also reached important operational milestones. At the onset of pandemic, we acted quickly to implement a number of protocols and safety measures to ensure the health and safety of our team members who needed to remain onsite to support the central operations. This included creating a program to provide recurring SARS-CoV-2 testing on site for all employees at our headquarters.

As an additional safeguard we made use of special power respirators which filter out particles and aerosols with very high effectiveness. We supplied this equipment to our employees who needed to work on site in close proximity to each other. These and other safety measures have facilitated the safe return to work of most of our research and development, manufacturing and other operations personnel. With these measures in place, we're able to continue on boarding new customers shipping products, building out infrastructure, including the implementation of a new ERP system and executing on an incredibly ambitious product roadmap that we laid out at the beginning of the year. We launched four new products for our customers. This started with our targeted gene expression solution which allows researchers to target the genes most relevant to their research, validate their hypotheses faster and reduce sequencing costs.

Second, our single cell Multiome ATAC plus gene expression solution which allows researchers to read both gene expression and epigenetic programming in the same cell across thousands to tens of thousands of cells in a single experiment. Third, our Visium spatial gene expression solution with immunofluorescence which allows whole transcriptome spatial analysis of approaching deduction in the same tissue section. And finally, a new version of our single-cell immune profiling solution offers increased sensitivity, reduced sequencing costs and access to rare gene signatures. Reflective of the excitement for these new products, our single cell Multiome ATAC gene expression solution and our Visium spatial gene expression solution were named as two of top 10 life sciences innovations of 2020 by The Scientist Magazine.

We also significantly expanded our global operations. In the fourth quarter, we opened our Singapore manufacturing and distribution center, which was done completely virtually. We will use the center of the hub to support our growing sales in APAC through improvements in our global supply chain and our customer service across the region. We believe these investments will be critical to support our long-term plans to scale the Company. We made two key acquisitions in ReadCoor and CartaNA which together with our early stage initial research and development efforts are forming the foundation of our third product platform in the emerging in situ field. The building products in this field has been on our strategic roadmap for some time. These two acquisitions remain with that overarching strategy in mind as it will help us also deliver incredible new capabilities to our customers.

With these acquisitions, we gained important technologies enabling IP and added amazingly talented people. Our team is the foundation of our Company and they are ultimately the source of all of our success. Throughout the year, we added more than 250 employees. The vast majority of which were on boarded virtually. Over 70 of these hires were in our commercial organization, bringing our total to 290 commercial employees at year end. I'm so proud of the brilliant passionate hardworking individuals who continue to be drawn to our mission at 10x. And as always working intensely motivated by our customers work, by their discoveries and by their progress.

Last year, the COVID pandemic presented an unexpected and acute challenge to the scientific community. Many of our customers responded with great determination to understand those disease and to develop ways of fighting it. As an example, I'd like to highlight two major papers published in just the last few weeks. The first published in Nature came from the University of California, San Francisco where researchers used single cell sequencing to compare mild and severe COVID patients. They discovered that patients with mild disease display specific pattern of gene expression that coordinates the immune system's fight against the virus. In contrast, in severe disease the patients are producing rogue antibodies that interfere with that pattern and with proper functioning of the immune system. This points to target for potential immunotherapies in severe patients to reengage viral defense.

The second paper published came from a single cell consortium for COVID-19 in China, made up of researchers from 36 institutes and hospitals. This group ran a massive study performing in-depth analysis on hundreds of samples from nearly 200 patients. They were able to link key changes across large numbers of different cell types to clinical features including age, sex, severity and disease stage. The study revealed multiple features of the immune response that were previously not appreciated. This dataset provides a rich resource for understanding the pathogenesis of COVID-19 and for developing an effective therapeutic strategies going forward.

Now, while we're still navigating this pandemic, our customers have adapted to work within this new environment. We believe labs have reached a steady operating state, which will continue until the pandemic is brought under control.

Demand for Chromium instruments remained strong in the fourth quarter. Customer engagement drove pull-through back to pre-COVID levels and usage in biosafety labs continues to drive incremental instrument placements. Importantly, during the quarter, we booked our first multinational biomarker study involving clinical samples from 12 collection sites. We're excited about the opportunity for using the Chromium platform to improve the yield of the drug development process.

Turning to Visium. The platform continued to grow during the fourth quarter, and there have been more than 80 publications and preprints to date. We're highly encouraged by the pace of adoption and growing use cases. We believe these papers provide critical validation across a number of exciting areas of research and will accelerate market adoption in our existing markets, especially in translational settings.

Previously, we have talked about Visium's applications in oncology and neuroscience. While these continue to be the major drivers of Visium adoption, we're also excited by the range of new use cases that our customers have been exploring. For example, Visium is being used in studies of heart biology to understand congenital heart conditions in atherosclerosis. There is a study to understand the progression of liver fibrosis to identify targetable pathways for antifibrotic therapies. And to better understand kidney disease, customers are using Visium to obtain spatial and temporal profiles of chronic kidney injury and comparing them to those from the normal kidney.

Now, even with our commercial success over the past several years, it is still very early days. Looking ahead to 2021, our investments are focused around four key priorities. First, building out our organizational and operational infrastructure; second, driving broader Chromium adoption; third, establishing Visium as the standard for spatial genomics research; and finally, developing the in situ platform.

Starting with our organization. We're strategically scaling our business to build ahead of demand and to drive future initiatives. As I mentioned earlier, we ended the year with close to 300 commercial employees, and we plan to hire at least 100 more throughout 2021 to support global expansion and new product launches. We're also making investments across the Company in our global IT infrastructure, operations, R&D and G&A. As a part of these investments, we have acquired land nearby to bring our sophisticated manufacturing capabilities closer to our R&D to support the rapid pace of product development.

We're also hiring top talent across our Company to grow every part of our organization, with plans to increase our employee base by approximately 50% over the course of the year. As we scale, we are focused on preserving and nurturing a mission-driven culture that drives us to achieve things that have never been done before. These core values have been and will continue to be a critical part of our long-term success.

Turning to Chromium. We remain very early in its adoption cycle and in the impact of a single cell revolution. Since its launch in 2016, the platform has quickly scaled to more than 2,400 instruments. And while impressive, it is still a very small fraction of our total opportunity. Our products are already starting to sweep away many of the conventional tools of standard biology. And they're doing this across all of the life sciences across what are conventionally viewed as distinct market categories, whether it's molecular biology, cell biology, protein biology. And from the continuing interest we're seeing from new customers, it is clear that this is just the beginning. We expect that single cell approaches will become the standard for many types of biological experiments across tens of thousands of labs around the world.

Our goal with Chromium is to keep driving broad adoption and expanding from early technologies and genomics leaders to the tens of thousands of biologists focused on answering specific biological questions. We're investing to remove barriers for those new to high content genomics and to keep increasing the utility for our more established users. We're accelerating customers along an adoption curve with new product configurations allowing the total cost of experiment to be optimized across a wide range of Chromium use cases.

The following capabilities coming to the market this year, a CellPlex kit launching in the first quarter that will enable cell multiplexing for large experiments, reducing the cost by as much as 60%, a low-throughput kit, also launching in the first quarter that will reduce start-up costs for single-cell experiments and enable efficient proof-of-concept studies before sailing.

In the back half of 2021, we will launch a fixed RNA profiling kit to allow fixation at point of tissue collection, unlocking access to large sample cohorts. And Chromium X, a new high-throughput instrument that will enable routine experiments of 1 million cells. And finally, the 10x Cloud is now live for North American users to enable streamlined data handling and computation.

Moving on to Visium. This platform remains earlier in its overall adoption and life cycle compared to Chromium. Visium is incredibly powerful for elucidating spatial biology and is the highest resolution spatial genomics product on the market. This platform has been in the market for less than five quarters but has already gained broad adoption. We are now focused on establishing it as the standard for spatial genomics research and expanding its core capabilities in response to market demand.

We're very excited about future product launches, starting with Visium FFPE, which we expect to begin shipping in the second quarter of this year. A single biggest request for translational customers, in fact, the necessary condition for most of their research is the compatibility with FFPE samples. This is the predominant way that patient samples are collected and stored is the standard part of pathology workflows. We're launching a complete solution, comprising all ready to use reagents and software. It is the first technology to enable true discovery in FFPE samples, delivering the full transcriptome across the entire tissue. What's especially remarkable is that the sensitivity of this product is on par with what we see with analyzing fresh tissues with standard Visium. This performance exceeds even our aggressive internal expectations, and it's very exciting to our customers.

In addition to FFPE capabilities, a key request we have received from our Visium customers is to help the sample handling and logistics. Most importantly, our customers would like to analyze archived samples that have already been mounted on conventional non-Visium slides. To answer this need, in the first half of 2022, we plan to launch a new instrument called Site Assist. We expect the Site Assist will really simplify the workflow for many of our customers and will significantly expand the number of samples that could then be run on Visium.

And finally, we expect to launch Visium HD in the first half of 2022 to deliver single cell resolution. Visium HD is based on big fundamental advances in the underlying microarray technology. It will come with a resolution that's 400 times higher than the current Visium and over 1,500 times higher than the original pre-Visium technology. We believe that this, together with all the other investments we're making, will establish Visium as the single best platform for scientific discovery and translational research.

We're at the very beginning of the Visium story. The enthusiasm from our initial customers and the pace of our variety and breadth of early publications represent a significant opportunity for the Visium platform and spatial biology as a whole. To keep driving market adoption and help our translational customers make the most of the platform, we will expand our clinical translational network this year ahead of launching Visium FFPE and highly multiplexed protein assays.

And finally, with the addition of in situ capabilities, we have added the foundation for a new platform that we expect will help us address another long-term growth vector. The promise of in situ is the ability to measure large numbers of molecules directly in their native state in tissue at sub-cellular resolution. This is different from Chromium, Visium or most current analytical techniques where molecules are removed from tissue before measurement. We expect to build an integrated system, which can be viewed as analogous to IHC of FISH-based approaches, commonly used in pathology, but scale to vastly greater multiplex levels and information content.

These capabilities laid the foundation for an ideal clinical instrument for tissue-based analysis. And as more insights and translational work gets done with Chromium and Visium, in situ will provide the natural format for many of these applications to be adopted in the clinic. In the long run, we expect that just about every tissue will be analyzed using at least one of these three approaches, whether for basic science research or for medical applications.

Moving beyond 2021, let me discuss our view on the market opportunity. We previously outlined our near-term opportunity within the research tools market as those areas where people are looking to do high throughput research. This currently represents approximately $15 billion of the more than $60 billion global life science research tools market. As more research moves to the high-resolution, large-scale approaches, more of the total life science research tools market will become available to us over time. In addition, there will eventually be many powerful clinical applications based on single cell and spatial analysis of tissues. We expect our in situ platform will be well positioned to bring many of those applications to the clinic. If we make modest assumptions around the numbers of potential samples and pricing, we estimate the size of this opportunity is around an additional $10 billion.

Perhaps the greatest revelation in biology over the past several years is the pervasive cellular complexity that underlies just about every biological system. It turns out that every tissue harbors much greater diversity of cells and cell types than we had previously thought, all of them interacting with each other in a complex interplay of massive gene expression networks. Going forward, it is clear to us that in the future, the vast majority of biological tissue samples will need to be analyzed with single cell context at large scale and at high resolution. And we have been investing in three core platforms that together will enable precisely this feature for our customers as they write their stories of the century of biology.

And looking ahead in 2021 now, we expect our revenues to grow more than 60% over 2020. Overall, I could not be more proud of our team for their execution this past year. Their talent, expertise and hard work have laid a strong foundation for long-term growth.

With that, I will now turn the call over to Justin for more details on our financials.

Justin McAnear - Chief Financial Officer

Thank you, Serge. Total revenue for the three months ended December 31, 2020 was $112.2 million compared to $75.3 million for the prior year period, representing a 49% increase. Similar to prior years, our revenue in 2020 was more heavily weighted to the back half of the year, particularly Q4, due to the typical budgetary cycles of our customer base. In addition, there was a concentration of orders during the month of December as more labs opened up and customers resumed experiments. Consumables revenue was $96.5 million, which increased 49% over the prior year period. Instrument revenue was $14 million which increased 49% over the prior year period. Service revenue was $1.7 million, which increased 48% over the prior year period.

North America revenue for the fourth quarter was $57 million, representing 34% growth over the prior year period. EMEA revenue for the fourth quarter was $32.9 million representing 54% growth over the prior year period. APAC revenue for the fourth quarter was $22.3 million, representing 95% growth over the prior year period.

Gross profit for the fourth quarter of 2020 was $93.3 million compared to a gross profit of $58.7 million for the prior year period. Gross margin for the fourth quarter was 83% compared to 78% for the fourth quarter of 2019. The gross margin increase was driven primarily by favorable product mix due to the Next GEM transition, which did not carry the same level of royalty accruals as legacy GEM products. As the transition to Next GEM products is now substantially complete, we see this level of gross margin as a high point and expect that future quarters will have a slightly lower gross margin as our newly introduced products expand and become a larger percentage of our overall revenue.

Total operating expenses for the fourth quarter of 2020 were $502.9 million compared to $66.8 million for the fourth quarter of 2019. Our fourth quarter operating expenses included $406.9 million of in-process R&D expense due to the acquisition of ReadCoor. R&D expenses for the fourth quarter of 2020 were $39.7 million compared to $27.9 million for the fourth quarter of 2019, excluding in-process R&D expenses related to the acquisitions. The increase was primarily attributable to increased personnel-related costs.

SG&A expenses for the fourth quarter were $56 million compared to $38.8 million for the fourth quarter of 2019. The increase was primarily due to increased personnel-related costs. Operating loss for the fourth quarter was $409.6 million compared to a loss of $8.1 million for the fourth quarter of 2019. This includes $14.3 million of stock-based compensation for the fourth quarter of 2020 compared to $5.1 million for the fourth quarter of 2019. Net loss for the period was $415.6 million compared to a net loss of $7.1 million for the fourth quarter of 2019.

Now turning to our full year results. Total revenue for the full year ended December 31, 2020 was $298.8 million compared to $245.9 million for 2019, representing a 22% increase. Consumables revenue was $252.7 million, an increase of 22% over the prior year. Instrument revenue was $40.1 million, an increase of 15% over the prior year. Service revenue was $6 million, an increase of 48% over the prior year. As of year-end, we have sold a cumulative total of 2,412 Chromium instruments, up 746 instruments from 1,666 instruments at the end of 2019, which represents a 45% increase in the ending installed base.

Our customers have historically averaged approximately $150,000 a year in consumable orders per instrument, outside of the impact of the pandemic. Q4 was above that rate on an annualized basis, but due to COVID impacts earlier in the year, our 2020 pull-through averaged $124,000 per instrument for the full year.

North America revenue for the full year was $159.3 million, representing 14% growth over the prior year. EMEA revenue for the full year was $73.3 million, representing 26% growth over the prior year. APAC revenue for the full year was $66.2 million, representing 38% growth over the prior year.

Gross profit for 2020 was $240.4 million compared to a gross profit of $184.9 million for 2019. Gross margin for 2020 was 80% compared to 75% for 2019. The increase in gross margin was driven primarily by lower accrued royalties related to ongoing litigation, partially offset by higher costs from newly introduced products.

Total operating expenses for 2020 were $774.5 million compared to $215.4 million for 2019, inclusive of $447.5 million of in-process R&D expenses related to the acquisitions of CartaNA and ReadCoor. R&D expenses for 2020 were $123.4 million compared to $83.1 million for 2019, excluding $447.5 million of in-process R&D expenses related to the acquisitions of CartaNA and ReadCoor. The increase was primarily attributable to increased personnel and stock-based compensation expenses.

SG&A expenses for 2020 were $202.3 million compared to $130.8 million for the prior year. The increase was primarily due to increased personnel and stock-based compensation expenses and increased litigation expenses. Operating loss for 2020 was $534.1 million compared to a loss of $30.6 million for 2019. Net loss for 2020 was $542.7 million compared to a net loss of $31.3 million for 2019. We ended 2020 with $664 million in cash and cash equivalents.

Now, turning to our outlook for 2021. We expect full year revenue for 2021 to be in the range of $480 million to $500 million, representing growth of 61% to 67% over full year 2020. As in prior years, we expect revenue to be heavily weighted towards the back half of 2021, particularly in the fourth quarter.

We ended Q4 with about 90% of customer labs operational at varying degrees of capacity and are still seeing a wide range of efficiencies within the COVID operating environment. Going forward, we expect this capacity to fluctuate in the near term, and we view the percent of labs open as a less important metric compared to the available capacity per lab. We don't expect much improvement in lab capacity in Q1. And Q1 will also lack the seasonality benefit of Q4. As a result, we expect our Q1 revenues will be sequentially down from Q4.

While the most visible impact of COVID-19 on our business has been customer lab closures and reduced capacity, we are also managing supply chain and logistics risks. These have not caused significant disruptions to date, but our customers are subject to similar risks, which could limit our customers' ability to perform experiments. It's an ever-evolving situation that we are tracking closely.

As we enable the Century of Biology, we will continue to aggressively scale the Company. In 2021, we are focusing our investments on R&D to continue our rapid pace of product development and innovation, intellectual property to protect our products and scientific advancements, our commercial organization to continue to build our sales and support teams and adequately address the interest we are seeing from the biopharma and translational markets, and finally, on our operational capabilities to ensure we have a solid foundation to enable our future growth.

At this point, I'll turn it back to Serge.

Serge Saxonov - Chief Executive Officer and Co-founder

Thanks, Justin. I'm so proud of our team and of our achievements and what turned out to be an incredibly challenging 2020. While the pandemic is not over, we anticipate that it will be brought under an increasing measure of control as we progress through the year.

Next week, we're hosting an inaugural virtual event called Xperience, where we will share details about the work of our customers and upcoming products. I look forward to seeing you all there. Overall, there are many reasons to be optimistic as we look to the coming years and beyond. The pandemic brought into a sharp relief the need to accelerate the mastery of biology and the importance of our mission. And looking beyond the current pandemic, advances in the life sciences are poised to transform the world in massive ways. We anticipate vast long-term opportunities ahead of us and intend to keep scaling the Company and investing aggressively to capitalize on them.

With that, we will now open it up for questions. Operator?

Question & Answers

Operator

All right. [Operator Instructions] Our first question comes from the line of Doug Schenkel from Cowen. You're now live.

Doug Schenkel - Cowen and Company - Analyst

Hey. Good afternoon, guys. I'm actually in the office but on my cell phone, hopefully, the reception is okay. 10x has always been a company that's done a fantastic job balancing high gross margins, which is, of course, attractive to investors with innovation that makes new technologies accessible via ease of use, quality and oftentimes, reduced price per unit for the customers. I'm recognizing that you noted in your prepared remarks that you're close to a high watermark with gross margin. As you roll out newer products with often lower price points and add new products organically and inorganically, how do you think about the longer-term outlook for maintaining gross margin at levels seen over the past few quarters? Meaning, at least in the mid-70s or so, even as we factor in what you said about this being kind of a high watermark quarter.

Justin McAnear - Chief Financial Officer

Hey, Doug, this is Justin. I'll take that one. Our high consumables gross margin is a core strength of our business model, and it helps enable the deep investments that we're making to develop new products. In our product development process, we typically target gross margins of about 80%. Some of our newer products have lower gross margins than our previously existing products, but they're mostly in that range. So, I think, 80% is a good number to think about for the near to midterm. And what you propose, I don't think is unreasonable to think about in the longer term.

Doug Schenkel - Cowen and Company - Analyst

Okay. Thanks for that, Justin. And I think, this is another one for you. I believe you talked about $150,000 in consumables per box on an annualized basis as the assumption that you baked into guidance, on the surface that seems a little low to me. I mean, back in Q4 of '19, you generated $165,000 in annualized consumable pull-through. I think that the full year number was a little bit lower than that, but still north of $150,000. I point to those numbers because, obviously, 2019 was pre-pandemic. And I recognize, on one hand, Q4 is seasonally a strong consumable quarter as we look back to Q4 of that year.

But, on the other hand, you have a higher mix of higher pull-through Chromium connects out there. And you also have more Visium users out there, which, of course, because we don't have a great way of modeling it, those consumables revenue typically get baked into that number. So, it's just not clear that your 2021 revenue guidance embeds an assumption that is kind of consistent with what we've seen trend-wise absent COVID and what we've seen in terms of increased Visium adoption. Can you just kind of walk us through what I might be missing here as I think about it as that number looks a little bit low?

Justin McAnear - Chief Financial Officer

Yeah. It's a good question, Doug. I think, starting at the beginning around Q4 and seasonality. So, Q4 is seasonally quite a bit stronger in total than the other three quarters. And you're right that the Q4 '19 pull-through was a large quarter-over-quarter increase from the previous quarters. And in fact, Q3 '19 was well below the $150,000 per year. So, that's why we focus on annual pull-through and not quarterly pull-through.

For our 2021 guidance, we contemplate existing customers continuing to increase their usage, while we're adding a large number of new customers at the same time, and those new customers take some time to ramp. We've previously said that around $150,000 or slightly above that is a good pull-through number to use as we balance the increasing utilization of existing customers against this ramp-up of the new placements.

And as far as the Connect goes, that is having some impact on the ASP when we look at the ASP between the Chromium Controller and the Chromium Connect. But that's a niche product, and it's very early on. And so, that isn't making a material difference in our average pull-through as of yet.

Doug Schenkel - Cowen and Company - Analyst

All right. Thanks again, Justin.

Justin McAnear - Chief Financial Officer

Thanks, Doug.

Operator

Next one on the queue is Tycho Peterson from J.P. Morgan. You're now live.

Julia - J.P. Morgan - Analyst

Hi. Good afternoon. This is Julia on for Tycho. Thanks for taking the question. So, staying on the pull-through question, I know you know that at a conference that some of your oldest customer, that $1 million annual pull-through and you also have Visium FFPE and cytosis coming to unlock sample volumes. But at the same time, as you add new customers, it also weighs on throughput, at least initially. So, I know you said 150k as a good number for 2021. But as we look longer term, what do you say is the pull-through potential of Chromium in the out years? Are you still thinking about 200k by 2023, which is, I believe a data point you previously provided, or do you now think there is significant upside to that?

Justin McAnear - Chief Financial Officer

This is Justin. I'll take that one as well. It's a great question. There's a number of factors that are going to contribute to that. As we're adding an ever-increasing number of new customers each year and introducing new products, like Visium, the new capabilities on Visium, the Chromium Connect, the Chromium X, it's going to take some time for those products to ramp up and for us to see how they actualize in reference to our expectations.

But, the thing that I think is remarkable is that our pull-through has maintained - outside of the impact of the pandemic, but has maintained itself in that high-140 to 150 range, even as we've, like this year, increased the instrument installed base by over 40%. So, I think it's yet to be seen how that pull-through metric will materialize. $150,000 is the best estimate that we can give you right now for the near to medium term. But, at some point, the focus is going to be just an overall consumable application spend within the three platforms that we've defined.

Julia - J.P. Morgan - Analyst

Got it. And then separately, regarding the sales force expansion, you mentioned you're hiring at least 100 more sales people throughout this year. How should we think about the pace of that hiring and the cadence of revenue ramp this year? And then, what's the relative resource allocation between single cell versus spatial or between academic versus biopharma customers, if that's a better way to think about it? And then, are there any geographic focus? You previously know that China is a big opportunity and now in the manufacturing, how significant will China be as a relative mix of the total revenue?

Brad Crutchfield - Chief Commercial Officer

This is Brad, why don't I start on - at least the sales force side, and then Justin can take the rest. But, in general, we're trying to hire those people as prudently and fast as possible. So typically, in a sales organization, you want to sort of frontload it, growing so much and we're adding some of these people. And we're also really having to make up for the fact that we've had a little bit of a pause as we were trying to understand the course of the pandemic and what it would ultimately impact our business. So, in general, we will add at least 100 people this year, expanding pretty much across the organization, but you call out China is a real opportunity for us. And there, we continue to add commercial partners, as well as our own team members, so that we have a very good view of what's going on in China. And overall, China is going to be a major growth axis. It is, you already saw in fourth quarter numbers, and it's been this way for the last couple of years and will continue to be that way, a major growth axis for us.

Justin McAnear - Chief Financial Officer

I think that covered it, Brad. Was there any more to that?

Julia - J.P. Morgan - Analyst

The resource allocation between academic and biopharma customers.

Brad Crutchfield - Chief Commercial Officer

Well, maybe - I'll just touch on that. I mean, we are building out a focused strategic account sales force to deal with pharma and biotech, but mostly pharma and large pharma on their validation side of the house. In other words, outside of the discovery realm, which we certainly can handle. So, in that sense, we're building a lot more capacity and even internal capabilities to understand and really provide the right kinds of products and documentation that's needed to say that translational into the drug discovery validation process.

Julia - J.P. Morgan - Analyst

Got it. Very helpful. Thank you.

Operator

Next question comes from Tejas Savant from Morgan Stanley. You're now live.

Tejas Savant - Morgan Stanley - Analyst

Hey, guys. Good evening, and thanks for the time here today. I'll start with one on Chromium for you perhaps, Serge. You've got the Connect launch underway, the Chromium X, I believe, comes with $100,000 ASP launching in the back half of the year. So, how do you think about upside to that 50,000 to 55,000 range instrument ASP? I mean should we be thinking of closer to sort of 60,000 come year end?

And then, in terms of distinguishing the value proposition, you've spoken about sort of walk away automation as being the defining sort of feature on the Connect, and then you've got the high throughput POP-seq users as a target for Chromium X. How are you thinking about sort of reinforcing that messaging with your customers? And then, have you had any early discussions with your POP-seq sort of potential user base just yet following the launch announcement in January?

Serge Saxonov - Chief Executive Officer and Co-founder

Thanks, Tejas. So, I'll start with the questions focused on the X. So, we certainly have been talking to customers. I would emphasize that it's not just sort of the POP-seq application that X has aimed at, in fact, probably mostly at other things. And there's plenty of applications, like immune profiling, like looking at scaling up atlasing efforts, looking at more cells, combinatorial drug screens, combinatorial CRISPR screens. This is where like some of the most intense count demand is coming from. And so, we certainly have been talking to customers about this. And I think there's - that was the interest that motivated the development of the instrument in the first place, and we have, if anything, have been growing more excited by the potential and what we're hearing from customers. So, I think that's the Chromium X.

In terms of Connect, I mean, it's the same story. I mean, Justin alluded to this before, but walk over automation has been the rationale for the Connect and specifically biopharma customers. But again, during COVID, there's like an expanded use of set of cases that have emerged around - because people are constrained around when they can actually be in the lab, when they can run things. So, the Chromium Connect has the advantages that are particularly relevant now. So, that's kind of - that's how these are - the instruments are evolving. I'll let Justin touch on the ASP part of it.

Justin McAnear - Chief Financial Officer

Yeah. So, for the Chromium X, the pricing isn't final yet. And as far as the ASP range goes, $50,000 to $55,000 is what we've talked about in the past for Chromium. The average ASP, including Chromium and Chromium Connect for 2020 is still in that 50 to 55 range. I would say, in light of the - what we would expect to sell in Q4 of this year, with the legacy instruments, I wouldn't recommend making any adjustments to that until we get closer.

Tejas Savant - Morgan Stanley - Analyst

Got it. That's helpful. And then, Serge, any color to share on new versus repeat customers in the quarter for Visium? I know in the last quarter, you had highlighted repeat orders as the key sort of customer constituency where you saw strong performance.

Serge Saxonov - Chief Executive Officer and Co-founder

Yeah, a good question. I think, that trend has continued. Again, our focus internally and what we're seeing from customers is really that, is the reorder rate of getting the customers through their workflows to the answers. And you see that again reflected an increasing number of publications, preprints are coming out. So overall, I think it is trending positive, and that is the kind of the important area of focus for us, now that we've established like a nice initial user base.

Tejas Savant - Morgan Stanley - Analyst

Got it. Perfect. And then, one final one for Justin here. In light of your comments, Justin sort of this 50% increase in headcount. Should we be sort of just extrapolating from that to sort of $120 million per quarter sort of opex run rate with a 40-60 R&D versus SG&A split? Is the math sort of right at a high level on that, or could it be sort of similar, but more front-end loaded, more back-end loaded through the year, how are you thinking about that?

Justin McAnear - Chief Financial Officer

Yeah. So good question. We are planning to grow headcount by 50% this year. Most of the hires are going to be in R&D, followed by commercial and then G&A - or operations and G&A after that. I would more heavily weight it towards the - towards the front half of the year and more heavily weight it towards R&D.

Tejas Savant - Morgan Stanley - Analyst

Perfect. Super helpful. Thanks, guys.

Operator

Next one on the line is Derik de Bruin from Bank of America. You're now live.

Derik de Bruin - Bank of America - Analyst

Hey, good afternoon. So, a couple of questions. So, can we talk about the new multiplex application? I mean you say it sort of saves customers 60% in cost. How is that 60%? Is that 60% sequencing cost? Is that 60% to you? Basically, the question is like, are you expecting just the higher volume experiments to make up any sort of potential price erosion on your end?

Serge Saxonov - Chief Executive Officer and Co-founder

Yeah. It's a good question and an important question that we thought a lot about. So, this is an average estimate for like what we expect customers who are using it to save, inclusive like overall on their experiments. It is definitely the case where they will end up spending less per sample with our expectation, and it's borne out by what we have seen on customers doing - using kind of homegrown - homebrew solutions previously is that this will lead to more usage overall and more dollars flowing into the single cell experiments in total. So, the sort of the drop per sample cost - the reduced cost per sample will - should materialize in higher overall spend. Maybe not right immediately, but certainly over time.

Derik de Bruin - Bank of America - Analyst

Got it. And, can you talk a little bit about the forward monthly order growth rate? I mean, you've provided on the last couple of calls, just some clarity on - just some color on what you're sort of seeing.

Justin McAnear - Chief Financial Officer

Derik, this is Justin. So, in the past couple of quarters, I think in the midst of COVID, without guidance in place, we were trying our best to give color on what we were seeing in real time. But, now that we've reinstated guidance and we've given some color around the weighting as far as mostly in the back half of the year and particularly in Q4, we won't be giving any kind of mid-quarter update, at least at this time.

Derik de Bruin - Bank of America - Analyst

Fair enough. Just thought [Phonetic] I would ask. And finally, one last question. Can you talk a little bit about how much of - how much you have embedded into your current guidance for recent new product launches in 2021? Just some sort a sense of what's additive, is there any sort of cannibalization that could happen? Just some general thoughts on how you're thinking about new products contributing to the top line.

Justin McAnear - Chief Financial Officer

Yeah. So, the guidance, the 480 to 500 range incorporates all of the new product launches. It's our best view taking into account those different factors that you mentioned, like cannibalization, how we expect those products - what we expect the adoption curve to look like, based upon what we've learned on past launches. But, it's all incorporated in that range that we've given.

Derik de Bruin - Bank of America - Analyst

Great. Thank you.

Operator

Next one on the queue is David Westenberg from Guggenheim Securities. You're now live.

David Westenberg - Guggenheim Securities - Analyst

Thank you for taking the question. So, in terms of the new product launch in the low throughput area, how should we think about the transition speed of your customers in terms of dabbling in their toes into single cell to full believers of single cell? And how should we think about the impact of that low throughput kit on that transition speed, just based on your early customer experiences?

Brad Crutchfield - Chief Commercial Officer

Hey David, this is Brad. I'll take that. As we've not launched the kit right now, we really don't know. But, we do think we have a very good kind of view of the two reasons that this kit is important. One, as you've already pointed out, is it gives people an opportunity that are new to 10x to try and do sort of pilot studies, and those usually can be used to help gain grants in funding, and in some cases, even a budget allocation within the laboratory.

The other side of it for us is - and this is where I'm cautiously optimistic as this could be very important is giving customers that are more experienced customers, a test bed, test experimental workflow, workout sample prep procedures, all the time courses of the way they harvest samples, all that can be worked out in a very - a much more lower cost environment to measure the - a likelihood of success of an experiment. So, those are really the two things that will drive that. I mean, probably - and then - so your question is how quickly, if we take that first group of people, we're hoping that we can run people through that adoption cycle, certainly within a year.

Typically, when we have a lot of experience launching products, we've launched a lot of them, and ultimately, just understanding adoption cycle. But in this case, it's just - it's kind of a new use case and just understanding how that models out. We'll keep an eye on it but as we launch that product, which will be in the next few months.

David Westenberg - Guggenheim Securities - Analyst

Got it. No, that was very helpful. And then, in terms of - are you giving any kind of number in terms of percent of your Visium customers that - or sorry, percent of Chromium customers that are starting to use Visium? And then, just in terms of - are you seeing a pickup in Chromium when you see customers pick up Visium? And how much do you think that is actually on account of Visium versus just these are high users of genomics platforms, period? And that's my last question.

Serge Saxonov - Chief Executive Officer and Co-founder

Well, so maybe I'll start here. I will say this that you have to appreciate that - the Chromium has a pretty - has now a large established user base. A special number of customers is actually larger than just a number of instruments because of the kind of the concept halo users around each instrument. And then, if you look - just looking at the math, the number of Visium customers, a very large fraction of them are existing Chromium users as well. So, the fraction of Chromium people who are using Visium is not trivial, but it's also not very large, right? That's how the math works out.

I would say, as far as being a driver, I'm not sure if that's material right now, probably on the margin, there is some sort of - some additional Chromium usage that might happen or vice versa. But, I don't think that's sort of the cross reinforcement as that material at this stage.

David Westenberg - Guggenheim Securities - Analyst

Thank you.

Operator

Next one on the queue is Dan Arias from Stifel. You're now live.

Dan Arias - Stifel - Analyst

Hey, good afternoon, guys. Thanks. Serge, maybe just on a few of the new products and thinking about the range of capabilities that you're kind of looking to enable here with the X instrument, then also the lower throughput kits. Are you able to give us sort of a rough cut on the customer base just in terms of how many or what percentage you want to look at 10,000 cells at a time versus 100,000 versus 1 million? I know that's probably hard, but it would just be helpful to understand the buckets a bit, if possible, when we just think about who these products are targeting at this point and how many of them will really be helped once they have access to them.

Serge Saxonov - Chief Executive Officer and Co-founder

Yeah. I mean, that's a good question. And like you said, it's a hard number to pin down. And in fact, it's a moving number to pin down. If you went back just a few years ago, the number of people interested in 1 million, so experiments would have been essentially this year, maybe one or two in the world. It certainly has increased now, like referencing the applications I mentioned earlier, immune profiling, combinatorial screens, especially with the rise of sort of CRISPR screening applications that has been significant. So, I would say, that number of people who are at the cutting-edge and would be interested in many hundreds thousands of cells or million as - it exists is not huge, but it's not trivial either, right? And we expect that kind of looking at the pattern of single cell usage and the scaling up of the last five years, we anticipate that people will keep moving up that year and we certainly will help them along as well.

Dan Arias - Stifel - Analyst

Okay. And then, maybe just on the fixed RNA profiling kit that's coming later this year. Is the idea to launch targeted and whole transcriptome at the same time, or will one be in the market before the other? And then, I guess relatedly, will they both be launched at some point this year? Thanks.

Serge Saxonov - Chief Executive Officer and Co-founder

So, the question specifically for six RNA profiling kit?

Dan Arias - Stifel - Analyst

Yeah, please.

Serge Saxonov - Chief Executive Officer and Co-founder

Yeah. So, we haven't talked about the details on that cadence. It's a good question, but we haven't talked about those details yet.

Dan Arias - Stifel - Analyst

Okay. Thanks.

Operator

Next on our queue is Patrick Donnelly from Citi. You're now live.

Patrick Donnelly - Citigroup - Analyst

Hey, thanks for taking the questions, guys. Justin, maybe just on the full year guide, can you just talk through, I guess, the assumptions you've made on the end market recovery, certainly exited 4Q in a good position. I guess, when are you thinking we get back to kind of normal state? And maybe for Brad, on the back of that, obviously, you saw a nice budget flush, as you guys mentioned at the end 4Q. Have you seen any slowdown, I guess, in January? As you kind of - as that spend kind of played out? Was there kind of everyone taking a breath in January, or did the strength kind of continue so far this year?

Justin McAnear - Chief Financial Officer

Good question. When we thought about guidance for this year, we really looked at the first half and the back half. And I think, for the first half, as we shared in detail, at least for Q1, we really don't expect much improvement as far as the lab capacities go. And really, I think that's the case for Q2 as well. I think, we're optimistic around the back half of the year, and that's why we talked around - about the weighting in more the second half of the year, particularly Q4. But, this assumes that things will start to turn around in Q3, but won't really be felt until Q4.

Brad Crutchfield - Chief Commercial Officer

Yeah. And Patrick, as far as the start of the year, typically, January is slow. I think, this year, it was a little bit larger because - I mean, let's face it that the news in December was pretty dire, and we certainly saw some headwinds as case counts were spiking. And again, sort of the doom and gloom was the prevailing, feeling. We certainly have seen that improve in the last three or four weeks, three weeks probably. And ultimately, there will - there is probably - and as Justin described, there is some aspect of pull in, and that's contemplated in our guidance.

Patrick Donnelly - Citigroup - Analyst

That's helpful. And then, just maybe on the FFPE launch, I mean that's nearing. Maybe can you just talk through the potential customer conversations there? I mean, has it been a part of the market kind of holding off on adoption until this was available? I'm just curious what the conversations meant like around this ahead of the launch.

Serge Saxonov - Chief Executive Officer and Co-founder

So, on FFPE, I think it is a product that we've been pretty excited by for some amount of time. I think the feedback from customers and what it is able to do has been very positive, and we're very excited to get it to like a broad set and launch it - fully to the market later in the first half of this year. So, everything is looking good and we're excited by it.

Brad Crutchfield - Chief Commercial Officer

Yeah. And I'll just add, I mean, the world didn't really get a good sense of how good this product is going to be just only maybe in the last six weeks. And that's really sparked a lot of interest.

Patrick Donnelly - Citigroup - Analyst

Yeah. That's helpful. And maybe last one just on the in situ side. Obviously, a big investment year more than certainly the revenue side, obviously. But what has feedback been from customers since the deal, just in terms of interest of using it, complementary with Visium? And then, anything we can look out for as you progress through the year in terms of milestones, or is it kind of going to be behind the curtain, and we'll see it in a couple of years?

Serge Saxonov - Chief Executive Officer and Co-founder

Well, yeah, interesting question, right, because the instrument - the interest has only been there, just like you guys have been asking a lot of questions. But, in situ, after the deals, customers have certainly been very interested as well for many similar reasons. Everyone's intrigue what we're going to be able to do. I think, partially this speaks to our reputation. We built great products before. So, I think, people are expecting big things from us.

As far as going forward, I mean, we are focused right now on developing a platform. There's a lot to do. This is a very challenging generally technology area to build products in. And we are investing to build awesome products for our customers. That's our focus right now. We're further along, when we're - we'll talk about it.

Patrick Donnelly - Citigroup - Analyst

All right, appreciate it, Serge.

Operator

Next along the line is Matt Sykes from Goldman Sachs. You're now live.

Matt Sykes - Goldman Sachs - Analyst

Thanks for taking my question. Just a more high-level question. I know we've talked a lot about the headcount increase you guys planned to do over the course of the year. I'm just curious more on the qualitative side, how competitive is that market, both on commercial and R&D? And has it gotten tighter over the course of the last year? And do you expect it to get tighter over the course of this year?

Serge Saxonov - Chief Executive Officer and Co-founder

So, yeah, it's a good question. So, I'll ask - I'll answer it broadly, the Company, and Brad might be able to add more color on the commercial side, on sales side. So, look, talent, like I said during my opening remarks, talent, kind of - has been a focus for us from the very beginning. That's the foundation of the Company. So, always top-of-mind concern, and we are always trying to get the very best people in the Company. So, as far as we're concerned, it's always in some sense a tight market, kind of regardless of what happens there right now. It varies by area. Back in the early days, it was particularly more challenging for us, for example, to hire more like software developers and people out of the sort of tech industry that has gotten relatively easier for multiple reasons. In general, I think we're doing - especially compared to sort of start-up days, it has gotten easier, and we're doing quite well, and we're very happy with the level of talent that is coming to the Company, very happy.

Brad Crutchfield - Chief Commercial Officer

And I'll just add a little bit on the commercial side. I mean, there's generally been somewhat easier, like Serge said overall, because people know who we are. In a commercial, there's always that sort of competitive aspect, and people like to be part of a winning team, and we try to make sure that 10x is a winning team. So, overall, it's improved, but we also have a very high standard. So, the yield is not very high in giving people through the interview process.

Matt Sykes - Goldman Sachs - Analyst

Great. Thanks for that color. And just one last one I know you guys have talked about lab capacity. I'm just wondering, as you look out regionally, where you guys are, are there any differences in the cadence of capacity within labs across different regions, or is it pretty much the same cadence that you're expecting as we get towards the back half of the year, the capacity to go up?

Brad Crutchfield - Chief Commercial Officer

Yeah. Maybe I'll just take that. There's a complete range. I mean, in places like China, it's kind of back to what I would consider normal. And even generally across Asia, we've seen that stabilize fairly quickly. Europe is - with the exception of the UK has continued to open up and function at an increasingly improved capacity. And in AMR, we see it - it's kind of all over the Board. Early on in the quarter or, let's say, towards the end of the quarter, I should say, we saw certainly some issues in Southern California as there was a spike there. But overall, we've kind of reached that point where there is some level of attenuation, but we - as I think Justin has pointed out, we're going to have to see the impact of the vaccine before we see any material change going forward.

Matt Sykes - Goldman Sachs - Analyst

Great. Thanks very much for the color. Appreciate it.

Operator

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10X GENOMICS INC

Q4 2020

Earnings Transcript

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