Advancing impressively on all fronts

Update | 24 January 2017

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MaxCyte’s trading update and recent news flow show how its electroporation technology is a key enabler for many cell therapies. There are over 35 cell therapies in development that use MaxCyte’s devices, and recent papers show its potential use in CRISPR cell therapies. MaxCyte’s own therapeutic programme, CARMA, should enter the clinic in H117, and a new collaboration expands its CAR platform into haematological cancers. Scientific progress has been matched on the financial front, with sales growing by over 30% in FY16, for a second consecutive year. We raise our valuation per share by 64p to 253p.

Year-end: December201420152016E2017E
Sales ($m)7.29.311.914.7
Adj. PBT ($m)(1.8)(1.4)(4.4)(5.9)
Net Income ($m)(3.8)(3.5)(4.9)(5.9)
Adj. EPS (c)(15.2)(1.9)(7.3)(13.7)
Cash ($m)
EBITDA ($m)(1.2)(0.7)(4.1)(5.4)
Source: Trinity Delta Note: Adjusted numbers exclude share-based payments and exceptionals.
  • An enabler for cell therapies The ability of MaxCyte’s flow electroporation products to efficiently and consistently transfect any cell with any molecule means that it is an ideal technology for many ex-vivo cell therapies. Data presented at the Keystone Symposia for rare disease and in a paper in Science Translational Medicine demonstrate how its technology can be used for CRISPR-based cell therapies.
  • CARMA nears the clinic and moves into haematological cancers MaxCyte remains on track to file its IND for the first CARMA therapy in H117, which should be followed shortly by the initiation of the first CARMA clinical trial, a Phase I study in ovarian cancer. The company has also formed a collaboration with Washington University in St Louis to explore the ability of the CARMA platform to treat AML; thereby expanding the potential of CARMA into haematological cancers.
  • Second year of over 30% sales growth MaxCyte revenues in FY16 have increased by over 30% to c $12.2m, slightly ahead of our estimates, with the loss before tax lower than we were expecting. This growth was evenly spread across all areas of the business and lays the foundation for another strong year of growth in FY17. We will review our estimates on publication of the company’s FY16 results in March.
  • Raised valuation/share by 64p to 253p We increase our valuation for MaxCyte by £28m to £110m (253p/share), to recognise potential commercial licensing deals that could be signed in coming years, and the stronger US dollar. MaxCyte’s shares have more than doubled over the last three months, but this is still 20% below our fair value.


24 January 2017

Price (Sterling)210p
Market Cap£91.4m
Enterprise Value£94.2m
Shares in issue43.5m
12 month range72.5p-225p
Free float67%
Primary exchangeAIM London
Other exchangesNA
Company CodeMXCT.L
Corporate clientYes

Company description

MaxCyte uses its patented flow electroporation platform to transfect a wide array of cells. Revenues arise from sale and lease of equipment, disposables and licence fees; with an impressive client list. Additionally, a novel mRNA mediated CAR technology, known as CARMA, is being explored in various cancers, including solid tumours.


Mick Cooper PhD
+44 (0) 20 3637 5042

Franc Gregori
+44 20 3637 5041

MaxCyte delivered another year of strong revenue growth in FY16 with sales up 30%, which was combined with a disciplined approach to expenses, so the loss before tax is lower than market expectations. At the same time, MaxCyte and its collaborators have made important progress. A new collaboration expands the potential of MaxCyte’s CARMA platform and recent publications highlight how its flow electroporation technology could become a key enabler of CRISPR-based cell therapies.

MaxCyte’s flow electroporation continuing to gain traction

CARMA is MaxCyte’s proprietary CAR (Chimeric Antigen Receptor) technology platform, which has many potential benefits over the current generation of CAR-T therapies, produced using a viral vector. It will not require the conditioning regimen, with the associated adverse events (AEs), prior to treatment; and it should be possible to target a broader range of tumour-associated antigens (including solid tumour targets) as the injected CAR cells are not engrafted into the patient, so on-target, off-tumour effects can be managed. The production process is also a lot simpler and cheaper, as it will be possible to produce the CARMA therapy within one day in a hospital setting (further details in our initiation note).

The lead CARMA product targets the protein mesothelin, which is expressed at high levels by ovarian cancer and other solid tumours and at lower levels on normal mesothelial cells. MaxCyte is expected to file an IND with the FDA in the coming months, so that it can start a c30-patient Phase I/IIa trial in ovarian cancer in H117. This product has been developed in collaboration with the Kimmel Cancer Center at The John Hopkins University.

To investigate the potential of the CARMA platform in haematological tumours, MaxCyte has formed a new collaboration with the University of Washington in St Louis. The company will work with John DiPersio MD PhD and his team to carry out preclinical studies with CARMA cells that target the CD123 protein for the treatment of acute myeloid leukaemia (AML). CD123 is an attractive target as it is highly expressed on AML cells; however there are also low levels of expression on haematopoietic stem cells, meaning that there is the risk of on-target/off-tumour effects, which, unlike in first-generation CAR-T therapies, can be managed with the CARMA technology.

If these studies are successful and advance without significant complications, we estimate that a clinical trial with CD123-CARMA therapy in AML could be initiated in 2018. This would also open up the field of haematological cancers to the CARMA platform, thereby increasing its commercial potential.

A versatile and effective enabler for many cell therapies

Beyond the field of CAR therapies, it is also becoming clear that MaxCyte’s flow electroporation is a key enabler for many cell therapies, which require the transfection of cells ex-vivo.

There are already over 35 cell therapy programmes in development, some of which are in clinical trials. Two of its partners are CRISPR Therapeutics and Editas Medicine, both of which are developing cell therapies with CRISPR technology to make specific alterations to the genomes of cells. There is considerable excitement about the potential of CRISPR technology to cure genetic diseases, but a key challenge that first needs to be overcome is the efficient and consistently reproducible transfection of oligonucleotides and RNAs for CRISPR into specific cells

Data presented at the Keystone Symposia on Precision Genome Engineering and in a paper in Science Translational Medicine showed that the CRISPR technology together with MaxCyte’s flow electroporation devices could be used to efficiently correct the CYBB gene that causes the X-linked chronic granulomatous disease (CGD), which causes immunodeficiency. These preclinical studies indicated that the mutated CYBB gene in CD34+ haematopoietic cells could be converted ex vivo into the functional gene, so that when the cells were engrafted back into the preclinical models, there was a long-term clinically relevant improvement in the animals.

The studies were carried out as part of a collaboration between MaxCyte and investigators at the National Institutes of Health’s (NIH) National Institute of Allergy and Infectious Diseases (NIAID), so there is no indication of when this potential therapy for CGD might enter clinical development. However, this data does demonstrate that MaxCyte’s technology can be used to enable the development and production of ex vivo CRISPR therapies, and make it more likely that its partners will be able to advance their programmes into clinical development.

Financials and Valuation

MaxCyte has delivered a strong set of results in FY16 with sales increasing by over 30% to c£12.2m, while keeping a disciplined approach to expenses so that its loss before tax is less than the forecasts in the market. Reassuringly as well, there was a strong performance across all areas of the business, by product line (drug discovery & development, and cell therapy) and by geography. This suggests that this strong growth will be maintained in the coming years.

The FY16 results will be ahead of our expectations, however we are making no changes to our estimates at this stage, and will review them fully following the publication of the FY16 results in March.

We have decided, however, to review our valuation in light of the scientific progress and the likelihood of MaxCyte signing commercial licensing deals in the coming years, together with the strengthening of the US dollar. As a consequence of these changes, our valuation has increased from £82m (189p/share) to £110m (253p/share).

We have included five commercial licensing deals in our valuation over the next five years (NB these potential deals are not included in our financial estimates), each with an NPV of $10m, including product fees, upfront payments and milestones. At this stage, it is difficult to estimate the value of such a deal as there are no precedents, but we believe we are being cautious and only include five potential deals while there are over 35 programmes in development using MaxCyte’s flow electroporation technology. We have also changed the $/£ exchange rate from 1.50 to 1.32 (the current 12 month forward rate) to reflect the strengthening of the US dollar.

A summary of our new valuation is detailed in Exhibit 1.

MaxCyte’s shares have tripled since its IPO in March 2016 and more than doubled over the last three months. Despite this very strong performance, we expect that the momentum will be sustained, as the shares are still 20% below our fair value, even using such conservative assumptions.

Exhibit 1: Summary of the DCF valuation model of MaxCyte
Source: Trinity Delta; Note 1For the purposes of the valuation, we have assumed that 50% of R&D excluding CARMA and sales & marketing expenses are allocated to Drug discovery and the remaining 50% to Cell therapy.
Exhibit 2: Summary of financials
Source: MaxCyte, Trinity Delta  Note: Adjusted numbers exclude share-based payments and exceptionals.


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