First CARMA therapy to enter clinic in 2018

Update | 22 January 2018

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MaxCyte has filed its first IND with the FDA. This paves the way for a Phase I trial with MCY-M11 (anti-mesothelin CARMA) in peritoneal cancers to start in 2018. The company is also expanding its CARMA programme to target a range of solid and haematological tumours. Revenues in FY17 rose by c 14% to c $14.0m, and the number of cell therapy programmes using MaxCyte’s technology has risen by c 15 to over 50. Despite the good progress, we are reducing our valuation by £12m to £166m, or 327p/share as the level of sales growth in FY17 was weaker than we had forecast.

Year-end: December 31201520162017E2018E
Sales ($m)9.312.314.017.0
Adj. PBT ($m)(1.4)(3.3)(10.6)(14.6)
Net Income ($m)(3.5)(3.9)(10.6)(14.6)
Adj. EPS (c)(186.4)(10.0)(21.7)(28.8)
Cash ($m)2.411.725.312.6
EBITDA ($m)(0.7)(2.6)(9.9)(13.8)
Source: Trinity Delta Note: Adjusted numbers exclude share-based payments and exceptionals.
  • CARMA entering the clinic this year MaxCyte submitted the IND for its lead CARMA programme, MCY-M11 (previously CARMA-M01), with the FDA in November 2017. The company is now in active discussions with the FDA so the Phase I study in advanced intraperitoneal cancers, including ovarian cancer, should start in 2018. As with all novel therapies such as CARMA (proprietary CAR therapy, see Outlook note dated 7 June 2017), the FDA adopts a cautious approach before allowing clinical development to start.
  • Strong revenue growth maintained MaxCyte’s sales from products, services and license fees grew by c 14% to c $14m in FY17; revenues have doubled organically since FY14. We had forecast stronger growth of 26%. However, careful control of cash has meant that the company had a gross cash position of $25.3m at year-end, compared to our forecast of $25.0m. So, MaxCyte remains well positioned to continue its investment in the CARMA programmes, while also delivering strong double-digit revenue growth.
  • Underlying growth drivers as strong as ever The funding of gene therapy and gene-modified cell therapy companies during the year to September 2017 was $1.62bn, an increase of 167% on the previous year (ARM). There are now >50 cell therapy programmes licensed to use MaxCyte’s technology (>35 at FY16), including >20 with clinical licenses. These facts lead us to believe that MaxCyte will grow sales by c 20% during the next two years.
  • Valuation reduced by 24p to 327p per share Our valuation of MaxCyte has been lowered by £12m to £166m, or 24p/share to 327p/share after reviewing our estimates. We have lowered our sales forecasts to take into account the sales growth in FY17 and adjusted expenses for larger share-based payments, but there are only small changes to our cash burn forecasts.


22 January 2018

Market Cap£138m
Enterprise Value£118m
Shares in issue50.8m
12 month range190-298p
Free float70%
Primary exchangeAIM London
Other exchangesNA
Company CodeMXCT.L / MXCR.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 5043

Valuation and Financials

We have reduced our valuation of MaxCyte from £178m to £166m (or from 351p/share to 327p/share) after reviewing our estimates. The effect of the lower sales forecasts and larger share-based payments on our DCF/sum-of-the-parts valuation has been partially offset by changes to discount factors to reflect the progression of time.

We have amended our FY17 forecasts to bring them in line with the numbers reported by MaxCyte in its trading update. This has in turn affected our estimates in subsequent years. We have lowered our sales forecasts as shown in Exhibit 1. However, these have had a limited impact on our cash-burn estimates as we have reduced the forecasted cash expenses in similar manner to sales, because the company manages its costs according to the revenues it receives. We have also increased non-cash share-based payments from $0.2m to $0.5m in FY17 and from $0.2m to $1.0m in FY18 to better reflect the increase in granted options.

Exhibit 1: Summary of changes to estimates
Source: Trinity Delta
Exhibit 2: Summary of financials
Source: MaxCyte, Trinity Delta  Note: Adjusted numbers exclude exceptionals. No new commercial licensing deals are included in our forecasts


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