At the forefront of the cell therapy revolution

Update | 24 April 2019

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MaxCyte’s sales rose by 19% in FY18, with a 24% CAGR over the past four years, and double-digit revenue growth should be sustained for the foreseeable future. In the short/mid-term, new products, extra investment in sales & marketing, and the increased number of licensed cell therapy programmes should underpin growth. The number of gene-modified cell therapies in development is also increasing rapidly, which, together with potential milestones from commercial licences, augurs well for the long-term prospects of MaxCyte. The first clinical trial with the lead CARMA therapy, MCY-M11, is proceeding as expected, and the initial data due this year could act as major share price catalyst. We value MaxCyte at £195m or 341p per share.

Year-end: December 31201720182019E2020E
Sales (US$m)14.016.720.925.2
Adj. PBT (US$m)(9.9)(8.9)(14.5)(14.9)
Net Income (US$m)(9.9)(8.9)(14.5)(14.9)
EPS (USc)(20.4)(17.3)(25.6)(25.9)
Cash (US$m)25.314.414.41.1
EBITDA (US$m)(9.1)(8.1)(13.4)(13.6)
Source: Trinity Delta Note: Adjusted numbers exclude share-based payments and exceptionals.
  • An acceleration in revenue growth  MaxCyte revenues rose by 19.2% in FY18, while still maintaining a gross margin of c. 90%. This was driven by the acceleration in growth in H218, during which sales increased by 25.2%, caused in part by the signing of two commercial licences in H218 (an additional one has since been signed in Q119). The company continued its prudent investment in the platform, including in its new ExPERT suite of instruments, so that the EBITDA before the $6.5m investment in CARMA was a loss of $0.8m (vs $1.2m loss in FY17).
  • Foundations for growth from increasing licence base  The number of licensed cell therapy programmes rose by c. 15 to >70 during FY18. The company also signed three commercial licensing agreements (covering the sale of devices and disposables, as well as milestones) with CRISPR Therapeutics, Precision BioSciences, and Kite Pharma (a Gilead company) during the last three months. It should be noted that these companies were so keen to secure use of MaxCyte’s technology that they did so even before their therapies have reached the clinic.
  • Momentum building behind cell therapies  The first gene-modified cell therapies (Novartis’s Kymriah and Kite Pharma’s Yescarta) were only approved in 2017, and the field continues to develop at a pace. Industry-wide 362 clinical trials with gene-modified cell therapies were underway in 2018, (+40% vs 2017); and the capital raised by cell and gene therapy companies rose 64% to $17.3bn in 2018. This strong growth in this therapy area should enhance MaxCyte’s long-term prospects as it provides a key enabling technology for many next-generation cell therapies.
  • Current share price fails to reflect company’s progress  We have adjusted our valuation of MaxCyte to reflect the FY18 results and £10m capital raise in February to £195m (341p/share) from £184m (358p/share). The electroporation life sciences business is valued at 195p/share (£111m) and the CARMA platform at 146p/share (£84m). There are major catalysts this year with data from the first clinical trial with the lead CARMA product due to be reported.



24 April 2019

Market Cap£107.4m
Enterprise Value£100.2m
Shares in issue57.3m
12 month range177.5-253.0p
Free float70%
Primary exchangeAIM
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

Lala Gregorek
+44 20 3637 5041

MaxCyte has a broad client base, generating predictable and recurring revenues on the strength of its flow electroporation technology. Its instruments have many applications in drug discovery and manufacturing, but their use in producing next-generation cell therapies is the key long-term revenue growth driver. The number of these novel cell therapies, which often rely on MaxCyte’s technology to be produced, continues to grow rapidly and MaxCyte earns more revenues per programme as they advance through the development process. This contributed to MaxCyte’s acceleration in sales growth in FY18, when it achieved 19% growth while maintaining pharma level gross margins of c90%. We anticipate this strong performance will be sustained for the foreseeable future. On top of this, the first clinical study with its lead proprietary CAR therapy (CARMA) is proceeding well, and clinical data this year could act as a major share price catalyst. We value MaxCyte at 341p per share or £195m.

The company has a strong foundation for growth through its established position as a partner of choice for cell therapy companies. MaxCyte is the world leader in non-viral cell engineering, thanks to its flow electroporation technology platform. Its enabling technologies and know-how for the development of therapeutics requiring ex vivo non-viral modification of cells is increasingly in demand as the promise of the still nascent cell therapy field is starting to become realised.

MaxCyte’s in-depth scientific and regulatory understanding across the cell therapy value chain, coupled with its enabling technologies, has helped consolidate its leading market position. It is well-positioned in a growing cell therapy market, especially given the emergence of several key themes, including: the intersection of gene-editing and immuno-oncology; a shifting focus from cell therapy to gene-modified cell therapies; and growing interest in non-viral rather than viral methods of transformation.

The current broad portfolio of clinical license agreements, together with the more recently signed commercial license deals should underpin sustainable, and accelerating, sales growth. This licence base continues to expand and mature. The number of clinical use licences grew from >25 to >35 over the past year, which will increase near-term revenues and raises the likelihood of securing additional commercial licensing agreements.

A three-stranded business model

MaxCyte’s flow electroporation technology can transfect almost any mammalian cell with a wide variety of molecules, eg proteins, DNA, and mRNA, with minimal disruption to the cell. The patented technology is both highly efficient (90-95% effective cell loading is commonplace), and very scalable (2×1011 cells can be processed in less than 30 minutes in sterile and clinical conditions). This validated and differentiated approach to cell engineering has addressed many of the key challenges, and the experiences gained have resulted in a system that is robust, reliable, scalable, and compliant from a regulatory perspective. Importantly for commercial applications, it is also highly reproducible.

The broad applicability of MaxCyte’s technology platform forms the foundation of its three-pronged strategy (Exhibit 1), which has delivered progress on all fronts.

In drug discovery, MaxCyte’s instruments can be used to facilitate the process, eg low cost, rapid, and scalable bio-manufacturing. The company works with all top ten pharmaceutical companies by revenue. It recently launched a next-generation technology platform, ExPERT. This raises the competitive bar as it couples three instrument formats for high performance cell editing with enhanced functionality and a wider range of disposables to offer customers a ‘single unifying technology from concept to clinic’.

In cell therapy, MaxCyte works particularly closely with partners to enable the manufacturing of the partner’s cell-based therapeutic, primarily through licensing of its GTx instruments (closed sterile cGMP compliant systems with an FDA Master File). In the past six months, MaxCyte has secured three notable commercial licenses in immuno-oncology with CRISPR Therapeutics, Precision BioSciences, and Kite Pharma (Gilead). We discuss these in further detail in a subsequent section of this report.

Finally, CARMA (proprietary mRNA-mediated CAR technology) is MaxCyte’s wholly-owned CAR therapy platform. CARMA therapies are engineered to transiently express the selected antigen complex to limit on-target/off-tumour toxicities commonly seen with other CAR therapies and are designed to be applicable to solid tumours as well as haematological malignancies. Funds raised in February 2019 are primarily being directed to further develop the CARMA platform and pipeline. The first CARMA therapy, MCY-M11, is currently being studied in a Phase I clinical trial in ovarian cancer and peritoneal mesothelioma. The first patients have been treated and initial data is expected during H119. A second CARMA trial, with intravenous administration of MCY-M11, is on track for initiation later in 2019.

Exhibit 1: MaxCyte’s three-part business model
Source: MaxCyte

MaxCyte is entering an important period, which should mark an inflection point in its growth trajectory as revenues benefit from expansion of its sales teams, and rapid growth and investment targeted at key markets, and new and existing research and clinical partnerships transition to more lucrative commercial licences. Coupled to this, progress of CARMA could transform the prospects of the company; data from the MCY-M11 Phase I trial will give the first true indication of the technology’s potential.

Commercial licences to drive growth

MaxCyte’s technologies enable its partners to navigate key challenges in the development and manufacture of cell therapies, through a simpler supply chain that accelerates timelines, reduces risks, and lessens costs. Consequently, there is continued growth in the number of technology licences MaxCyte has granted, with the number of cell therapy products using MaxCyte’s system increasing steadily.

Current technology licensees include gene-editing companies (eg CRISPR Therapeutics, Editas and Sangamo) and other cell therapy companies (such as Kite Pharma [Gilead] and Precision BioSciences), as well as academic institutions. The latter category includes University of Pennsylvania, Washington University at St Louis, and US National Institutes of Health.

The majority of MaxCyte’s licences have been granted for research use, and as such are limited in scope and value; however, as the underlying cell therapy programmes become more developmentally advanced, we would expect continued momentum in the number of clinical use licences, and over time an increasing number of commercial licences will be sought by partners. There are now >70 programmes in development (Exhibit 2), c. 15 more than at H118; >35 programmes have clinical licences and three have commercial licences.

Exhibit 2: Number of partnered programmes in place
Source: MaxCyte, Trinity Delta

Licensing fees charged can vary widely; reflecting factors such as the nature of the client (academic vs commercial), the breadth of indications studied, and the stage of the programme (research vs clinical vs commercial). A licence allows a customer to reference the FDA Master File, simplifying and expediting clinical planning.

Each licence is structured to meet the needs of MaxCyte’s partner, but typically follows the approach below:

  • an initial research licence that allows sufficient support to explore potential applications in a defined area; which
  • if the programme shows sufficient promise to enter development then a clinical licence is required (which allows access to the Master File to support the IND); and,
  • assuming a successful proof of concept (usually at Phase I/II or Phase IIa), then a broader commercial licence will be negotiated.

To date, Maxcyte has announced three commercial licences (Exhibit 3), which cover both immuno-oncology and gene editing (including CRISPR-Cas9). While there is limited disclosure on the deal economics, these have significant potential to further boost MaxCyte’s growth as cumulative potential clinical and approval milestones from these commercial deals exceeds $250m (with significant additional potential milestones and sales-based payments from Kite).

Exhibit 3: Commercial licences granted to date
Source: MaxCyte, Trinity Delta, Company websites.  Note: Casebia is a joint venture between CRISPR Therapeutics and Bayer; R/R = relapsed/refractory; NHL = non-Hodgkins lymphoma; ALL = acute lymphoblastic leukaemia; CLL = chronic lymphocytic leukaemia; AML = acute myeloid leukaemia; MCL = mantle cell lymphoma.

We highlight that potential 7-8 figure milestones and sales-based payments are not the only economic benefit to MaxCyte from commercial licences. Such milestones are clearly very attractive, but are also exposed to drug development and commercialisation risks. However, nearer-term more predictable revenue streams are generated by growing use of instruments and disposables; clinical/commercial use typically requires greater use of more expensive disposables per patient treated.

The most recently secured commercial licence, with Kite Pharma, is especially noteworthy as the company is a leading oncology-focused cell therapy player and the deal follows on from a research agreement that was only announced five months earlier, in November 2018. This swift extension to a non-exclusive clinical and commercial-use licence not only provides external validation of MaxCyte’s cell engineering technology but signifies Kite’s commitment to non-viral cell engineering in the development of its CAR-T therapies. While this is only one example at present and too early to suggest a trend, it is possible that with large partners the transition from a research licence to a commercial licence may occur in a tighter timeframe than we had previously anticipated as companies seek a competitive and timing advantage in bringing their cell therapy products into and through the clinical and regulatory process.

Enabling a new generation of medicines

MaxCyte’s leading position in ex vivo non-viral cell engineering and broad customer base, means it is well-placed to benefit from the opportunities presented by advanced cell and gene therapies. While this is still a young field, in the last few years, cell and gene therapies have shown considerable growth, supported by:

  • First approvals of transformational therapies: Novartis’ Kymriah (R/R DLBCL; R/R B-cell ALL), Kite/Gilead’s Yescarta (R/R B-cell NHL) and Spark/Novartis’ Luxturna (AAV-gene therapy for inherited retinal blindness) all received FDA and EMA approvals during 2017-18.
  • New regulatory frameworks: In the US, this includes the introduction of the FDA Regenerative Medicine Advanced Therapy (RMAT) designation in 2017, and in 2018, the publication by the FDA of six cell and gene therapy guidelines for industry. While the EMA updated its procedural advice for ATMP (Advanced Therapy Medicinal Products) in 2018.

Expansion of the knowledge base and understanding of cell and gene therapies, as well as a better appreciation of their potential clinical benefit and commercial value, has stimulated a concomitant explosion of interest attracting more investment into the sector, catalysing more companies to develop more products, and seek to advance them more rapidly.

The latest sector report from the Alliance for Regenerative Medicine (ARM Annual Regenerative Medicine Data Report 2018) highlights that globally a total of $17.3bn was raised by cell and gene therapy companies in 2018, up 64% on 2017. This figure includes secondary offerings and venture financings as well as IPOs, although 2018 was the biggest year to date for IPOs in the sector. Significant  NASDAQ listings included Allogene Therapeutics (raising $372.6m), Rubius Therapeutics ($277.3m), Orchard Therapeutics ($225.5m), and Autolus ($172.5m).

MaxCyte’s partners have also benefitted from investor largesse. Research/clinical partner Sangamo Therapeutics raised funds through two secondary offerings: $230m in April 2018, and a further $145.5m twelve months later following release of encouraging early data from its Phase I/II trial of ST-400 in ß-thalassaemia. More recently, commercial licensor Precision BioSciences raised $145.4m gross with its April 2019 NASDAQ IPO.

Cell therapy clinical progress is also evident with a growing industry pipeline. The same ARM briefing report also breaks out the number of trials underway globally based on stage of development and underlying technology (summarised in Exhibit 4). This report reveals several interesting trends.

Firstly, there is sustained growth in the proportion of trials in oncology (58% of the total in 2018 vs 53% in 2017 and 47% in 2016). Secondly, Phase II unsurprisingly represents the largest number of trials, but the lower total of Phase III studies is not necessarily reflective of high attrition rate, rather the increased likelihood of accelerated approval on Phase II data. Thirdly, and most importantly for MaxCyte, there appears to be an industry shift away from cell therapies towards gene-modified cell therapies and increasingly via non-viral methods, which reflects attempts to enhance efficacy and improve side-effect profiles.

Exhibit 4: Trials underway worldwide by specific technology in 2018
Source: Alliance for Regenerative Medicine, Trinity Delta

Several gene-editing technologies have been developed, including ZFNs (zinc-finger nucleases), TALENs (transcription activator-like effector nucleases), CRISPR/Cas-9 (clustered regularly interspaced short palindromic repeats associated protein-9 nuclease) and ARCUS (ARC nuclease). These technologies differ based on the properties of the endonuclease they use; the different enzymes have different mechanisms to recognise and cut their DNA targets, which determines their utility in different settings.

The versatility of MaxCyte’s technology means it can be used in various applications (Exhibit 5) and is compatible with different gene-editing technologies. For example, its partners use ARCUS (Precision BioSciences), CRISPR/Cas-9 (CRISPR Therapeutics and Kite Pharma), and ZFN (Sangamo).

Exhibit 5: MaxCyte’s technology at the forefront of cell therapy revolution
Source: MaxCyte

Another trend that is beneficial to MaxCyte is the shift towards non-viral cell modification, which offer a more controlled delivery mechanism. This is particularly evident in the development of allogeneic cell therapies (which use donor rather than patient cells), where there is mounting appreciation that allogeneic approaches do get cleared by the immune system, and consequently may require re-dosing for optimal therapeutic effect. Re-dosing with a viral vector-based therapies could encounter issues with immune reactivity.

It should be noted that the cell therapy field is extremely dynamic. Another of MaxCyte’s clients, Tmunity was only formed in 2015 and it has just become the first company to dose a patient with a CAR-T therapy produced using CRISPR technology, instead of a virus. It has not been disclosed, but we believe that MaxCyte’s technology was used to produce this CRISPR-based oncology therapy.

Growth in the overall cell therapy sector, as well the increasing prominence of several emerging trends (oncology, gene editing, non-viral transfection), means there remains a significant opportunity for MaxCyte to exploit in its drug discovery and cell therapy business lines. As well as the strong foundations for growth provided by these, there is the prospect for additional upside from the higher risk/higher reward proprietary CARMA platform and programmes.



We value MaxCyte using a sum-of-the-parts methodology with conservative assumptions and have updated our model to take into account the £10m capital raise and FY18 results. Our overall valuation of the company has increased from £184m to £195m, however our valuation per share is reduced from 358p to 341p due to extra shares in issue. The revised valuation is summarised in Exhibit 6.

Exhibit 6: Sum-of-the-parts valuation model of MaxCyte
Source: Trinity Delta; Note 1 For 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.

Our model suggests that the current market cap of £107m is fully supported by the life science electroporation business, with the potential of the CARMA platform and any additional commercial licences being essentially in for free. It should be noted as well that there is plenty of upside to our valuation of the life science business. MaxCyte could already earn potential commercial milestones worth over $250m; this is an un-risk-adjusted sum, which does not consider development and commercial risks, but it is also likely that MaxCyte will sign many more commercial license agreements.

The potential of the CARMA platform will become clearer over the coming year as clinical data from the current Phase I study with MCY-M11 is published. MaxCyte has already validated that it can manufacture the CARMA therapy within 24 hours, and if the current trial suggests that it has an acceptable safety profile and a promising efficacy signal, the CARMA platform could become the principal value driver for MaxCyte. As shown in Exhibit 7, there are many companies that are developing CAR-T therapies which are worth well over $100m.

Exhibit 7: Market cap and enterprise values of selected companies developing CAR therapies
Source: Trinity Delta, Company data;  Note: Market caps of companies at close on 23 April 2019



MaxCyte had a particularly strong financial performance in H218, with the new commercial cell therapy licences contributing to a significant acceleration in revenue growth to 25.2%, compared to H217. This in turn, led to the company increasing sales by 19.2% to $16.7m in FY18, while still maintaining an 89% gross margin. For comparison, FY17 sales increased by 14.0%, and MaxCyte has now increased revenues at a CAGR of 23.5% over the last four years.

The company is continuing to invest prudently in its platform, as highlighted by the launch of the ExPERT platform of instruments at the beginning of April, to maintain its leading position and to fully exploit the opportunity ahead. This saw operating expenses (excluding CARMA costs) rise by 16.9% to $16.7m, so that EBITDA before CARMA expenses was a loss of $0.8m, which compares favourably to the loss of $1.2m in FY17.

During FY18, MaxCyte invested $6.5m in the CARMA platform. This was less than our forecast of $7.5m and reflects the timing of the start of the clinical trial with MCY-M11.

Looking ahead, we forecast that revenues will continue to grow strongly with growth of 25.3% and 20.6% in FY19 and FY20, respectively; with further investment in the platform so that EBITDA before CARMA costs will stay at the same level. Investment in the CARMA programme is estimated to increase to $11.3m in FY19 and to $11.8m in FY20 reflecting the additional costs of clinical development. We highlight that MaxCyte’s investment in its CARMA platform has been more capital efficient compared with investments made by other CAR-T companies; this reflects its ability to leverage synergies with the other parts of its business.

The company finished FY18 with a cash position (including short-term investments) of $14.4m. It has since strengthened its balance sheet by raising £10m (c. $13m gross or c. $12.4m after expenses) by issuing 5.9m shares at 170p per share. The additional funds will be primarily used to advance its CARMA platform, including the planning of a clinical trial with an intravenous formulation of MCY-M11 that is due to start in H219.

We have updated our financial models to reflect the FY18 results and the capital raise. As indicated in Exhibit 8, there are limited changes to our estimates, with the main change relating to the extra shares in issue.

Exhibit 8: Summary of changes to estimates
Source: Trinity Delta
Exhibit 9: Summary of financials
Source: Company, Trinity Delta  Note: Adjusted numbers exclude exceptionals. No new commercial licensing deals are included in our forecasts.




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