Good CARMA: IND milestone achieved

Update | 16 July 2018

Share this note

FDA clearance of the IND for MCY-M11 is a watershed moment. It is MaxCyte’s first next-generation CAR (chimeric antigen receptor) candidate to approach the clinic, and significantly will be studied in solid tumours. Regulatory clearance of the Phase I trial means first patient dosing – and detail on trial design – is on track for H218. Clearance, while expected, provides important validation of the proprietary mRNA-based CARMA platform, and MaxCyte’s scientific and regulatory expertise in the fast-evolving cell therapy field. The H118 trading statement confirms solid progress in both growing and advancing the number of cell therapy licenses, underpinning Board confidence that FY18 revenue will meet market expectations. We maintain our £166m or 327p/share valuation, pending interims and updated financial guidance.

Year-end: December 31201620172018E2019E
Sales (US$m)12.314.017.020.3
Adj. PBT (US$m)(3.3)(9.9)(13.9)(13.8)
Net Income (US$m)(3.9)(9.9)(13.9)(13.8)
EPS (US$)(10.0)(20.4)(27.3)(27.2)
Cash (US$m)11.725.312.10.1
EBITDA (US$m)(2.6)(9.1)(13.0)(12.7)
Source: Trinity Delta Note: Adjusted numbers exclude share-based payments and exceptionals.
  • First CARMA trial on track for dosing H218 FDA grant of the MCY-M11 IND (investigational new drug) application, filed in November 2017, is a major milestone. A Phase I study in advanced peritoneal cancers (relapsed/refractory ovarian cancer, peritoneal mesothelioma) will begin dosing in H218. MCY-M11 is MaxCyte’s first next-generation CAR therapy; it has been engineered to minimise issues of on-target/off-tumour toxicity seen with viral CAR approaches, and applicability to solid tumours. Promising clinical data should stimulate interest in the CARMA platform.
  • Strong momentum in cell therapies The number of cell therapy projects licensing MaxCyte’s technology continues to rise (now >55 from >50 at end-FY17) and encompasses broad applications (including gene editing, immuno-oncology and regenerative medicine). Growth in licenses covering clinical stage programmes (>25 up from >15 at H117) bodes well for driving future value. As partners progress into the clinic, the technology becomes more deeply embedded, increasing instrument and consumable use, and the likelihood of needing a commercial license. Ongoing investment in sales and marketing should improve scalability to support growth.
  • Double-digit revenue growth continues H118 revenues were $6.9m; +11.6% on H117, and up 14.7% excluding commercial license upfront fees. Performance over the period coupled with ordinary seasonality means MaxCyte continues to trade in line with market expectations.
  • Valuation unchanged at 327p per share We maintain our £166m or 327p/share valuation of MaxCyte ahead of disclosure of MCY-M11 trial details and updated financial guidance, potentially at H118 results in late-September. However, this is not to understate the significance of the achievement, albeit expected, of the first FDA clearance for MaxCyte. At this stage we make no material changes to our estimates, although we have made a modest reduction to FY18 CARMA spend and transferred some forecast spending from R&D to sales and marketing investment.


16 July 2018

Market Cap£122.1m
Enterprise Value£101.8m
Shares in issue50.8m
12 month range235-284p
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 (0) 20 3637 5041

Good things come to those who wait

MaxCyte has achieved a major milestone with receipt of its first FDA IND approval for MCY-M11, clearing the path for the H218 initiation of a Phase I trial in solid tumours. MCY-M11 (anti-mesothelin, CARMA-hMeso) is the lead programme generated by MaxCyte’s proprietary CARMA platform and is wholly-owned. This is a novel mRNA mediated CAR technology that could provide fewer off-tumour effects and has a simpler, and less costly, production system than current viral mediated CAR-T (Chimeric Antigen Receptor T-cell) approaches.

The MCY-M11 IND was filed with the FDA in November 2017, and its approval has been widely anticipated during 2018. However, as with all novel cell and gene therapies (such as CARMA), the agency adopted a cautious approach before allowing clinical development to start. Nevertheless, MaxCyte’s ongoing constructive dialogue with the FDA, supported by key new hires (Chief Medical Officer, Dr Claudio Dansky Ullmann, and VP, Regulatory, Kathryn Wekselman) has resulted in a green light to start its first clinical trial later this year.

The US-based MCY-M11 trial will study the safety and potential efficacy of ascending doses of MCY-M11 in patients with relapsed/refractory ovarian cancer and peritoneal mesothelioma. No other details about trial design or clinical sites have so far been disclosed, but we expect further information to be forthcoming.

CARMA, a differentiated approach to CAR

CARMA is an autologous cell therapy platform, which utilises mRNA to develop differentiated targeted cell-based immune therapies; MCY-M11 is MaxCyte’s lead CARMA programme. The use of mRNA is an important differentiating factor: it allows for the transient expression of the selected antigen complex, with the ability to control the timing and clinical effect with a degree of flexibility. This means that CARMA-based therapies can be applied to the treatment of the full range of haematological malignancies and also to solid tumours.

Approved CAR-T therapies such as Novartis’ Kymriah and Gilead/Kite’s Yescarta have shown impressive efficacy in B-cell malignancies; however, their use and that of other clinical stage CAR-T programmes has been limited in other cancer types. Part of the reason for this is the incidence of treatment-related adverse event such as antigen-specific toxicities and life-threatening CRS (cytokine release syndromes). Globally, researchers are focusing significant attention on evaluating a diverse array of potential methods to overcome these, including novel antigen cocktails that only activate for a specific tumour site, introducing “suicide switches”, co-administration with other agents (eg IL6R blockers), and tailoring the T-cells’ CAR expression to suit the specific tumour type.

CARMA has the potential to overcome these limiting safety issues, including on-target/off-tumour toxicities frequently seen in solid tumours, where target antigens are overexpressed by tumours rather being tumour-specific. This can be achieved by varying the dosing (number of cells per dose and frequency of dosing) to deliver the optimal balance of targeted anti-tumour activity with tolerable toxicity. The MCY-M11 Phase I trial will provide important insights into, and clinical validation of this approach.

Well positioned in growing cell and gene therapy field

The field of cell and gene therapies has shown considerable growth in the last few years. As the knowledge base and understanding develops, there has been 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. New regulatory frameworks have been developed to support this, including the FDA Regenerative Medicine Advanced Therapy (RMAT) designation in 2017, and the more recent publication by the FDA of six cell and gene therapy guidelines for industry.

According to the Alliance for Regenerative Medicine (ARM 2018 Cell & Gene Therapy State of the Industry), a total of $7.5bn was raised globally, up from $4.2bn in 2016, with the bulk of this funding allocated to gene and gene-modified cell therapy, the sector which also saw the highest rate of year-on-year growth. In the same briefing report, ARM highlighted that at end-2017, 946 clinical trials were ongoing worldwide (end-2016: 802), of which 53% of were in oncology. Growth in number of ongoing trials was seen at all stages of development (Phase I: 314 vs 271; Phase II: 550 vs 465; and Phase III: 82 vs 66).

MaxCyte has benefited from these market trends, as demonstrated by the growth in the number of cell therapies licensing its technology (now more than 55, up from 50+ at end-2017), as well as the acceleration in the number of partner programmes advancing to the more lucrative commercialisation stage. MaxCyte’s licensing arrangements are structured to meet its partner’s needs, but typically follows the approach below:

  • an initial research lease 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 lease is required (which allows access to the Master File to support the IND); and,
  • assuming a successful proof of concept (usually at Phase IIa), then a broader commercial lease will be negotiated.

The growing and maturing license base will underpin robust future revenue growth; and is testament to MaxCyte’s leading market position and its in-depth scientific and regulatory understanding of cell therapies across the value chain.

FDA approval of the MCY-M11 IND is a significant milestone. Not only does it provide more clarity on timelines for progressing the wholly-owned CARMA pipeline, but increases confidence in the investment case, as MaxCyte now transitions to a product development company, as well as being a partner of choice for its enabling technologies and know-how.

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


Trinity Delta Research Limited (“TDRL”; firm reference number: 725161), which trades as Trinity Delta, is an appointed representative of Equity Development Limited (“ED”). The contents of this report, which has been prepared by and is the sole responsibility of TDRL, have been reviewed, but not independently verified, by ED which is authorised and regulated by the FCA, and whose reference number is 185325.

ED is acting for TDRL and not for any other person and will not be responsible for providing the protections provided to clients of TDRL nor for advising any other person in connection with the contents of this report and, except to the extent required by applicable law, including the rules of the FCA, owes no duty of care to any other such person. No reliance may be placed on ED for advice or recommendations with respect to the contents of this report and, to the extent it may do so under applicable law, ED makes no representation or warranty to the persons reading this report with regards to the information contained in it.

In the preparation of this report TDRL has used publically available sources and taken reasonable efforts to ensure that the facts stated herein are clear, fair and not misleading, but make no guarantee or warranty as to the accuracy or completeness of the information or opinions contained herein, nor to provide updates should fresh information become available or opinions change.

Any person who is not a relevant person under section of Section 21(2) of the Financial Services & Markets Act 2000 of the United Kingdom should not act or rely on this document or any of its contents. Research on its client companies produced by TDRL is normally commissioned and paid for by those companies themselves (‘issuer financed research’) and as such is not deemed to be independent, as defined by the FCA, but is ‘objective’ in that the authors are stating their own opinions. The report should be considered a marketing communication for purposes of the FCA rules. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. TDRL does not hold any positions in any of the companies mentioned in the report, although directors, employees or consultants of TDRL may hold positions in the companies mentioned. TDRL does impose restrictions on personal dealings. TDRL might also provide services to companies mentioned or solicit business from them.

This report is being provided to relevant persons to provide background information about the subject matter of the note. This document does not constitute, nor form part of, and should not be construed as, any offer for sale or purchase of (or solicitation of, or invitation to make any offer to buy or sell) any Securities (which may rise and fall in value). Nor shall it, or any part of it, form the basis of, or be relied on in connection with, any contract or commitment whatsoever. The information that we provide is not intended to be, and should not in any manner whatsoever be, construed as personalised advice. Self-certification by investors can be completed free of charge at TDRL, its affiliates, officers, directors and employees, and ED will not be liable for any loss or damage arising from any use of this document, to the maximum extent that the law permits.

Copyright 2018 Trinity Delta Research Limited. All rights reserved.