MaxCyte, Inc. (MXCT) is a leading, cell-engineering focused company that has been at the forefront of enabling platform technologies to advance the discovery, development, and commercialization of next-generation cell-based therapeutics. Founded in 1999, the company has established itself as a trusted partner for biopharmaceutical companies and research institutions, providing innovative solutions that have been instrumental in the advancement of the cell therapy and gene editing landscapes.
Business Overview and History
MaxCyte was incorporated as a majority-owned subsidiary of EntreMed, Inc. on July 31, 1998, under the laws and provisions of the State of Delaware. The company commenced operations on July 1, 1999, and was later recapitalized in November 2002, with EntreMed no longer deemed to control the company. Over the past two decades, MaxCyte has developed and commercialized its proprietary Flow Electroporation® technology, which is used by biopharmaceutical companies to facilitate complex engineering of a wide variety of cells.
The cornerstone of MaxCyte's offerings is its proprietary Flow Electroporation® technology, which serves as the foundation for the company's flagship ExPERT™ platform. This technology enables the precise and efficient transfection of a wide range of cell types, making it a critical enabler for the development of cell and gene therapies. The ExPERT platform has been designed to address the rapidly expanding cell therapy market and can be utilized across the continuum of the high-growth cell therapy sector, from discovery and development through commercialization of next-generation, cell-based medicines.
Over the years, MaxCyte has garnered significant expertise in cell engineering through its internal research and development efforts, as well as its customer-focused commercial approach. The company's platform is supported by a robust intellectual property portfolio with more than 200 granted U.S. and foreign patents and more than 100 pending patent applications worldwide.
MaxCyte's customer base spans a diverse range of organizations, including leading commercial cell therapy drug and biologic developers, top biopharmaceutical companies, and numerous biotechnology companies and academic centers focused on translational research. The company's Flow Electroporation technology has been extensively validated by its customers, with one of MaxCyte's Strategic Platform License (SPL) partners using the technology to engineer the first ex-vivo cell therapy approved by the FDA in December 2023.
Since its inception, MaxCyte has incurred significant operating losses. The company generated revenue of $41.3 million and incurred a net loss of $37.9 million for the year ended December 31, 2023. As of December 31, 2023, MaxCyte had an accumulated deficit of $175.8 million. The company has funded its operations primarily with proceeds from sales of common stock, borrowings under loan agreements, and cash flows associated with sales and licenses of its products to customers.
Financial Performance and Liquidity
In the fiscal year 2023, MaxCyte reported total revenue of $41.29 million, a 21% increase from the previous year's revenue of $33.89 million. The company's net loss for the year was $37.92 million, or $0.37 per diluted share. MaxCyte's operating cash flow for the year was -$21.69 million, and its free cash flow was -$25.39 million.
For the third quarter of 2024, MaxCyte reported revenue of $8.16 million, representing a 2% increase compared to Q3 2023. The company's net income for the quarter was -$11.56 million. The decrease in net income was primarily due to increases in cost of goods sold and a decrease in higher-margin program-related revenue.
MaxCyte's core revenue, which includes cell therapy and drug discovery segments, showed strong growth in Q3 2024, reaching $8.1 million compared to $6.6 million in Q3 2023, a 23% increase. Within core revenue, instrument revenue was $1.8 million, lease revenue was $2.5 million, and processing assembly (PA) revenue was $3.4 million, up 54% year-over-year.
As of December 31, 2023, MaxCyte had a strong balance sheet, with $46.51 million in cash and cash equivalents and $121.78 million in short-term investments, totaling $168.29 million in cash, cash equivalents, and short-term investments. As of the most recent quarter, the company had $36.96 million in cash and cash equivalents, and $159.67 million in short-term and long-term investments. MaxCyte's total assets stood at $268.27 million, and it had total liabilities of $36.11 million, resulting in a healthy current ratio of 9.81 and a quick ratio of 9.22.
MaxCyte's financial performance has been impacted by its continued investment in research and development, sales and marketing, and the expansion of its commercial infrastructure to support the growing demand for its cell engineering solutions. The company remains disciplined in its capital allocation, focusing on high-growth areas that are expected to deliver long-term returns.
MaxCyte operates primarily in the United States, as the company is a small-cap biotech focused on cell engineering technologies. The company has a debt/equity ratio of 0.08, indicating a low level of debt relative to equity. MaxCyte has no outstanding debt and does not have any credit facilities or credit lines disclosed.
Strategic Partnerships and Product Developments
One of the key drivers of MaxCyte's growth has been the company's strategic platform license (SPL) agreements with its cell therapy customers. These agreements provide the company with recurring revenue from instrument sales and leases, disposables sales, as well as pre-commercial milestones based on the progress of its partners' programs through the clinic and sales-based payments upon commercialization.
Since its inception, MaxCyte has signed a total of 29 SPL agreements, with six new partnerships announced in 2024 alone, including agreements with Lion TCR, Imugene, Wugen, Be Biopharma, Legend Biotech, and Kamau Therapeutics. This milestone underscores the growing demand for MaxCyte's cell engineering solutions and the company's ability to provide the scientific, technical, and regulatory support required for its customers to succeed.
In addition to its SPL agreements, MaxCyte has continued to invest in the development of new products and the enhancement of its existing offerings. In 2024, the company hired a Head of Engineering, Jeremy Kolenbrander, who has over 25 years of cell and gene therapy product development experience. This strategic hire is expected to bolster MaxCyte's ability to understand its customers' workflow needs and develop new solutions to address them.
Product Segments and Market Position
MaxCyte operates in two primary product segments: cell therapy and drug discovery. The cell therapy segment is a key driver of the company's revenue, including sales of instruments, single-use processing assemblies (PAs), and buffer, as well as revenue from instrument leasing. During the first nine months of 2024, cell therapy revenue grew 11% year-over-year to $19.14 million, representing 64% of total revenue.
The drug discovery segment generates revenue primarily from the sale of instruments, PAs, and buffer to pharmaceutical and biotechnology companies for use in drug discovery and development. While this segment saw a slight decline of 11% year-over-year to $4.76 million in the first nine months of 2024, it continues to be an important part of MaxCyte's business.
MaxCyte's ExPERT platform and related products and services have become increasingly important tools for the rapidly growing cell and gene therapy industry. The company's ability to facilitate complex cell engineering for a wide range of cell types has made it a valuable partner for both cell therapy developers and drug discovery organizations.
Risks and Challenges
While MaxCyte has established itself as a leader in the cell engineering space, the company faces several risks and challenges that investors should be aware of:
1. Competitive landscape The cell therapy and gene editing markets are highly competitive, with a growing number of companies developing their own electroporation and cell engineering technologies. MaxCyte's ability to maintain its competitive edge and market share will be crucial for its long-term success.
2. Regulatory landscape The cell therapy and gene editing industries are subject to stringent regulatory requirements, which can significantly impact the development and commercialization timelines of MaxCyte's customers' programs. Any changes or delays in the regulatory environment could adversely affect the company's business.
3. Customer concentration A significant portion of MaxCyte's revenue is derived from a limited number of large customers. The loss of one or more of these key customers could have a material impact on the company's financial performance.
4. Funding environment The availability of capital for MaxCyte's customers, particularly in the cell and gene therapy space, can impact the pace of their research and development activities, which in turn could affect the company's revenue growth.
5. Execution risk As MaxCyte continues to expand its product offerings and customer base, the company must effectively manage its growth and execution to ensure the successful delivery of its solutions and the satisfaction of its customers.
Outlook and Future Guidance
MaxCyte's strong performance in 2024, with the signing of six new SPL agreements and the continued growth in its core business, demonstrates the company's ability to capitalize on the burgeoning cell therapy and gene editing markets. The company's focus on providing comprehensive scientific, technical, and regulatory support to its customers has been a key differentiator, positioning MaxCyte as a trusted partner in the development of next-generation cell-based therapies.
For the full year 2024, MaxCyte has increased its core revenue guidance to at least 5% growth compared to 2023. The company continues to expect SPL Program-related revenue of approximately $6 million in 2024, which represents no additional milestone payments this year. MaxCyte's 2024 outlook does not include royalty revenue from CASGEVY, the first and only approved CRISPR gene editing therapy.
MaxCyte expects to end 2024 with $185 million in combined total cash, cash equivalents, and investments, an increase from their previous guidance. This strong financial position will allow the company to continue investing in research and development, as well as expanding its commercial infrastructure to support future growth.
As the cell and gene therapy industry continues to evolve, MaxCyte is well-positioned to leverage its innovative technology, robust intellectual property portfolio, and deep scientific expertise to drive further growth and cement its position as a leader in the cell engineering space. With a strong balance sheet, a disciplined approach to capital allocation, and a talented management team, MaxCyte is poised to capitalize on the significant opportunities ahead and deliver long-term value for its shareholders.
The cell and gene therapy market is experiencing strong growth, with a forecasted CAGR of over 20% through 2027. Demand for non-viral delivery technologies like MaxCyte's electroporation platform is increasing as the complexity of cell therapies grows. This favorable industry trend, combined with MaxCyte's strong market position and innovative technology, provides a solid foundation for the company's future growth and success.