MXCT - MAXCYTE: A PIONEER IN THE CELL THERAPY MARKET
MAXCYTE: A PIONEER IN THE CELL THERAPY MARKET
MaxCyte, Inc. (NASDAQ: MXCT; LSE: MXCT) is a leading, cell-engineering-focused company providing platform technologies to advance the discovery, development, and commercialization of next-generation cell therapeutics and to support innovative, cell-based research.
MaxCyte, Inc. (NASDAQ: MXCT)
Market Cap: $550.54M; Current Share Price: $5.35
Data by YCharts
The Company and its Products
Over more than two decades, MaxCyte has developed and commercialized its proprietary Flow Electroporation® platform, which facilitates the complex engineering of various cells.
Electroporation is a method of transfection, or the process of deliberately introducing molecules into cells, that involves applying an electric field to temporarily increase the cell membrane’s permeability. This precisely controlled increase in permeability allows the intracellular delivery of molecules, such as genetic material and proteins, that would not usually be able to cross the cell membrane as easily.
Cell therapy has emerged as one of the fastest-growing and most promising treatment modalities for various human diseases. MaxCyte’s ExPERT platform, based on the Flow Electroporation technology, has been designed to address this rapidly expanding cell therapy market and can be utilized across the continuum of the high-growth cell therapy sector, from discovery and development through commercialization of next-generation, cell-based medicines.
The ExPERT family of products includes four instruments, the ATx™, STx™, GTx™, and VLx™, and a portfolio of proprietary related disposables and consumables.
We’ll discuss a few key factors that indicate that MaxCyte has a promising future.
- Recognition as a leader in the large and growing next-generation cell therapy market
Since the FDA approved the first engineered CAR-T cell therapies to treat blood-based cancers in 2017, the number of cell therapy candidates evaluated pre-clinically and clinically has grown exponentially.
The recent success of multiple U.S. Food and Drug Administration-approved cell therapies providing long-lasting amelioration of symptoms or the presence of the disease has catalyzed tremendous investment—leading to exponential growth in cell-based therapies being evaluated for therapeutic applications. The Alliance for Regenerative Medicine, an international advocacy organization, estimates that the regenerative medicine sector, which consists of gene, cell, and tissue-based therapeutic developers, raised an aggregate of $12.6 billion in 2022 and that, as of January 2023, there were more than 2,220 active clinical trials focused on regenerative and advanced medicine, which includes gene therapy, cell-based immuno-oncology, cell therapy, and tissue engineering.
This growth is expected to continue given the remaining high unmet medical need in cancer and other chronic conditions, and there should be increased investments in cell therapy product development across various human diseases.
Thus, over the next few years, Maxcyte also expects to grow its market share given the high performance of its platform and the ongoing adoption of non-viral delivery as the industry has trended towards developing advanced cell-based therapies with complex engineering strategies to improve efficacy, reduce time to patient treatment and expand into new indications.
More specifically, MaxCyte’s Flow Electroporation Technology has been designed to meet the stringent demands of clinical use—namely, the ability to safely and reproducibly modify a broad range of primary human cells with high efficiency, low cytotoxicity, and at the scale required to enable the treatment of patients across a diverse range of diseases, as shown below.
- Innovative partnership business model
MaxCyte’s Strategic Platform Licenses (SPL) partnerships allow it to participate in the value creation of customers’ programs via pre-commercial milestones and commercial sales-based payments in nearly all cases.
The Company’s business model provides recurring revenue and high visibility, with drivers of potential long-term upside. Substantial revenue can be generated from five sources: sales of instruments, disposables, and consumables to new customers; additional sales of instruments, disposables, and consumables to the existing installed base; annual instrument license fees from cell therapy customers; potential pre-commercial milestones under SPL partnerships; and potential commercial sales-based payments under SPL partnerships.
MaxCyte generates recurring revenue from ExPERT instrumentation licenses and disposables and consumables (or buffer) sales, which provides high visibility into future near-term revenue. In addition to recurring revenue, the Company has the potential to receive meaningful pre-commercial and commercial payments under SPL partnerships as customers achieve success in advancing programs through the clinic and into the commercial stage. In aggregate, given SPLs entered into to date, there is potential to receive over $1.55 billion in pre-commercial milestone payments if all programs were granted regulatory approvals.
- Dependable financial performance
Over the last five years (2018 – 2022), MaxCyte has delivered ~25% CAGR of core revenue growth and pharmaceutical-like gross margins of ~89%.
Specifically for FY22, the Company reported total revenue of $44.3 million, an increase of 31% over FY21. FY22 core business revenues grew 26%, led by cell therapy revenue growth of 33%, and revenue from drug discovery grew 8%.
Gross profit for FY22 was $39.2 million (88% gross margin), compared to $30.2 million (89% gross margin) in the prior year.
During FY22, the Company announced three new SPL partnerships and the recent addition of Catamaran Bio as a partner in early 2023. It also partnered with Vertex following the transfer of the exa-cel program from CRISPR.
MaxCyte continues to enter new partnerships and witness their partners achieve upcoming milestones, moving the cell therapy industry forward. As of December 31, 2022, the Company had 18 active SPL partner agreements, which allowed for over 125 potential programs, 16 of which were active programs currently in the clinic (defined as programs with at least a cleared IND or equivalent).
Suppose all potential programs successfully progress through the clinic to commercial approval. In that case, Maxcyte estimates aggregate potential to generate pre-commercial milestone payments of over $1.55 billion in addition to sales-based commercial revenue due under existing agreements.
In comparison, at the end of 2021, there were 15 SPL partnerships covering over 95 programs with total potential pre-commercial milestones exceeding $1.25 billion.
Also, as of December 31, 2022, the Company had over 600 instruments placed with customers, compared to over 500 at the end of 2021. Total cash, cash equivalents, and short-term investments were $227.3 million as of December 31, 2022, compared to $255.0 million as of December 31, 2021.
Going forward, for FY23, the Company expects total revenue growth of between 21% and 26% over 2022, including core business revenue growth of between 20% and 25% over 2022 and SPL program-related revenue of approximately $6 million.
As discussed, the cell-therapy market is expanding, and MaxCyte enjoys a leadership position in this industry due to the efficacy of its innovative platform. The Company has a robust revenue model that promises recurring income and substantial growth. Hence, it seems that MaxCyte has all the makings of a Company set toward an explosive growth trajectory.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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Reference:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1287098/000155837023003911/mxct-20221231x10k.htm
https://investors.maxcyte.com/static-files/268de60f-0a90-4bc8-9012-566a4bda9101
https://investors.maxcyte.com/news-releases/news-release-details/2022-full-year-results