The potential of cell therapies is starting to become clear, and MaxCyte’s technology lies at the heart of many of these next-generation treatments. The pivotal role its platform plays is shown by ten major partnership agreements formed with leading cell therapy players over the past 18 months. These can earn pre-commercialisation milestones in excess of $800m, transforming MaxCyte’s medium- and longer-term revenues as the underlying programmes advance through clinical development. CARMA, MaxCyte’s proprietary cell therapy platform, is nearing a key inflection point, with Phase I data from its lead asset due in 2020. Management is targeting CARMA to be self-financing by 2021. We raise our valuation to £260m (340p/share), from £195m and 341p, with the core business alone valued at £158m (206p/share).
Poised to benefit from cell therapies MaxCyte’s ExPERT flow electroporation platform is increasingly recognised as a key element of producing many of the nextgeneration cell therapies. There has been a notable acceleration in the number and scope of the collaboration partnerships being struck, bringing the total up to ten. The potential pre-commercialisation milestones now exceed $800m. Even if only a small portion of these well-funded programmes succeed it would be transformative.
FY19 results point to encouraging outlook MaxCyte’s judicious decision to invest in and develop its proprietary technology is starting to really pay off. Setting the one-off impact of COVID-19 on FY20e aside, revenues appear set to maintain their 20-30%+ annual growth rate through the medium-term. Despite continued investment in maintaining the platform’s cutting edge and in its expansion of marketing efforts, MaxCyte has achieved a maiden EBITDA profit (ex-CARMA spend) in FY19.
CARMA preparing for self-financing Flagship programme, MCY-M11 in ovarian cancer and peritoneal mesotheliomas, is continuing dose-escalation in a Phase I study. Positive results should facilitate the planned transition for the CARMA business to become self-financing by 2021. A specialist advisor, Locust Walk, has been appointed to explore the appropriate options and expedite the process.
Valuation increased to £260m or 340p/share We have updated our model to reflect FY19 results, the £23.6m (net) fund raise, and the progress achieved. Our valuation rises to £260m ($338.5m) or 340p/share, from £195m or 341p/share previously, with the core business now valued at £158m (206p/share), of which recurrent revenues contribute £83m (108p/share), and potential milestones £49m (63.5p/share). We value CARMA Cell Therapies at £103m (134p/share).