MaxCyte

Increasingly in demand as partner of choice

Update | 20 January 2020

Share this note

MaxCyte is consolidating and expanding its position as a leading partner for enabling technologies, particularly in the rapidly growing gene editing and cell therapy space. It made several major advances during 2019. These include delivering revenue growth above market expectations, creation of a separate entity for the CARMA business, and, importantly for future prospects, securing five non-exclusive multi-product licences for varied approaches to gene-editing of cell therapies. These increase the number of clinical/commercial cell therapy deals to eight and associated potential pre-commercial milestones from >$250m a year ago to >$650m now. MaxCyte’s revenue opportunity will be expanded by this substantial new revenue stream, beyond the growing demand for its instruments and disposables.

Year-end: December 31201720182019E2020E
Sales (US$m)14.016.720.925.2
Adj. PBT (US$m)(9.9)(8.9)(16.6)(16.2)
Net Income (US$m)(9.9)(8.9)(16.6)(16.2)
EPS (USc)(20.4)(17.3)(29.5)(28.3)
Cash (US$m)25.314.413.34.0
EBITDA (US$m)(9.1)(8.1)(15.4)(14.8)
Source: Trinity Delta Note: Adjusted numbers exclude share-based payments and exceptionals, 2019E is not updated for trading statement
  • Inching closer to significant milestone income   Promising disclosures by partners – ie CRISPR Therapeutics/Vertex (CTX001), Precision BioSciences (PBCAR0191), and Editas (EDIT-301) – indicate development progress which may crystallise near-to mid-term milestones. FY19-20 milestone receipts may be lumpy as commercial licences (seven signed in 14 months) take time to mature. However, momentum in clinical/commercial deal flow and recent data suggests that the broad portfolio of licences (>100 cell therapy programmes; >70 licenced for clinical use) should start to deliver a smoother income stream, positively impacting the top and bottom line.
  • CARMA progress on two fronts   MaxCyte’s novel mRNA mediated CAR technology, CARMA, is now a wholly owned subsidiary, which should become self-funded by 2021 via independent investment and new partnerships. Lead CARMA asset, MCY-M11, has completed dosing the second patient cohort (no dose-limiting toxicities or related serious adverse events) and is currently dosing the third cohort in the Phase I relapsed/refractory ovarian cancer and peritoneal mesothelioma study; the fourth cohort is due to start Q120. Preliminary trial data is expected mid-2020.
  • FY19 sales beat market expectations   Accelerating H219 sales growth to $13.2m (+36% vs H218) helped boost FY19 revenues by c 30% y-o-y to $21.6m (FY18: $16.7m). FY19 saw record milestones on top of solid growth across the business. The expanding licence base and development progress bodes well for rising milestone income from FY20 onwards. FY19 cash and equivalents stood at $16.7m.
  • Share price does not reflect MaxCyte’s potential   While we continue to value MaxCyte at £195m or 341p/share, with the core business excluding CARMA worth £111m, we acknowledge the major strides it has made in the past 18 months. Our forecasts are not updated to reflect today’s trading update as we intend to update our financial forecasts and revisit valuation assumptions after prelims in April.

Update

20 January 2020

Price121.5p
Market Cap£69.7m
Enterprise Value£56.9m
Shares in issue57.4m
12 month range95.0-197.4p
Free float70%
Primary exchangeAIM
Other exchangesNA
SectorHealthcare
Company CodeMXCT.L
MXCS.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.

Analysts

Mick Cooper
mcooper@trinitydelta.org
+44 (0) 20 3637 5042

Lala Gregorek
lgregorek@trinitydelta.org
+44 (0) 20 3637 5041

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

Disclaimer

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 www.fisma.org. 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 2020 Trinity Delta Research Limited. All rights reserved.