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High-margin MaxCyte banks on new platform

The cell-based therapy specialist is pouring money and resources into its new technology platform, CARMA
March 21, 2017

Let's start by clarifying what market newcomer MaxCyte (MXCT) does. The US healthcare group, which was founded in 1999, helps larger bio-pharmaceutical companies develop cell-based therapies by licensing out its Flow Electroporation cell engineering platform. It allows MaxCyte's partners to engineer nearly all cellular and molecular forms at any scale. The proprietary technology is used in many ways - from drug discovery through to bio-manufacturing and gene editing.

IC TIP: Buy at 288p

Now, the company is developing CARMA, a platform specifically designed for immune-oncology, which could help develop highly-effective medicines to treat a broad range of cancers, including solid tumours. Last year, the group significantly ramped up investment in this area, spending $1.3m (£1.05m) on CARMA, compared with just $0.3m the year before. That contributed to more than $13m in operating expenses, which goes some way to explain why MaxCyte is still loss-making.

That said, the group is involved in more than 40 partnered programmes for its technology, which sent revenues up by nearly a third to $12.3m last year. You get some idea of the value-added proposition by the gross margin - stable at 89 per cent.

Analysts at Panmure Gordon expect pre-tax losses to escalate from $3.3m in FY2016 to $5.3m for the year ending December 2017.

MAXCYTE (MXCT)

ORD PRICE:288pMARKET VALUE:£125m
TOUCH:280-295p12-MONTH HIGH:293pLOW: 73p
DIVIDEND YIELD:nilPE RATIO:na
NET ASSET VALUE:12ȼNET CASH:$11.7m

Year to 31 DecTurnover ($m)Pre-tax profit ($m)Earnings per share (¢)Dividend per share (¢)
2012*5.1-2.0nana
2013*6.8-1.0nana
2014*7.2-1.8nana
20159.3-1.4-186nil
201612.3-3.3-11.0nil
% change+32---

Ex-div: na

Payment: na

*Pre-IPO figures

£1=$1.24