MaxCyte: Milestones a key contributor to 30% top line growth
MaxCyte delivered a consensus-beating 30% uplift in full-year 2019 (FY19) revenues to US$21.6mln underpinned by the release of milestone payments from its commercial partners as programmes advanced through clinical studies, and by a 25% five-year revenue compound annualised growth rate (CAGR). There are a number of positive trends including increasing recognition of the company’s cell engineering technology,
which is regarded as the gold standard in non-viral cell engineering, as well as strong momentum from financing in the cell and gene therapy sector, which attracted nearly US$10bn of global financing in 2019. The company’s wholly-owned CARMA Cell Therapies subsidiary is accelerating an independent funding strategy to be completed in 2020, as the lead clinical programme recently advanced into a fourth and final dosing cohort.
Milestones the fastest-growing income stream; Life Sciences revenues increased 30% year-on-year to US$21.6mln, well ahead of the consensus forecast, driven by revenues and lease payments for its expanded and optimised ExPERT instrument range, which leverages the company’s proprietary cell engineering technology Flow Electroporation. Notably, this included a boost from milestone payments triggered by the advances in clinical programmes of its eight commercial-stage cell therapy partnerships. MaxCyte (MXCT) signed a ninth deal in the first quarter of 2020 (Q120) with off-the-shelf CAR-T pioneer Allogene Therapeutics (ALLO). Stable gross margins of circa 90% were supported by recurring sales of consumable elements used across its ExPERT range, as well as buoyant instrument leasing income.
A maiden positive EBITDA before CARMA investment; MXCT’s Life Sciences business delivered positive underlying earnings (EBITDA) of US$1.2mln, excluding US$11.7mln of investment in its proprietary CARMA Cell Therapy platform, supported by the increase in milestone payments, which have no associated costs. Total operating expenses increased to US$31.5mln (US$23.3mln), partly because of additional investment into CARMA as the lead programme advanced through clinical studies, taking the net loss to US$12.9mln vs US$8.9mln in FY18. Cash and short term investments at the end of December stood at US$16.7mln, after a net cash inflow of US$4mln, including the £10mln (US$12.3mln) net proceeds from MXCT’s March 2019 placing.
Solid track record of revenue growth; MXCT has delivered a 2014-19 revenue CAGR of 25% helped by a very strong contribution from recurring revenues, supported by the sharp increase in the number of instruments placed, up from 250+ in FY18 to 320+, as well as the number of partnered programmes, which jumped from 70+ to over 100 during FY19, with five of its nine clinical and commercial deals closed in the period.
MXCT has established early ground in the cell therapy sector; MXCT is in an exceptional position to benefit as the industry matures further, not least because of the versatility of the platform and its ability to deliver any molecule to any cell at any scale. Advances in its partners' programmes are gathering momentum in line with the huge sums being invested and the exceptional level of innovation. The value of aggregate pre-commercial milestone payments has risen since the end of FY18 from US$250mln+ to more than US$800mln across its nine clinical and commercial partnerships, which span a range of indications and targets.