Earnings call transcript Q1 2023

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Operator

Good day, and thank you for standing by and welcome to MaxCyte’s First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your speaker today, Sean Menarguez. ahead. go Please

Sean Menarguez

My the everyone. Thank Sean and call. Menarguez all Good of name Investor am conference today’s Head participating MaxCyte. Relations I for afternoon, in is here you at

MaxCyte the Douglas release A financial copy XX, and Financial results is On the Chief company’s available from Doug President on quarter Executive Swirsky, MaxCyte and today, Earlier press XXXX. first of is Doerfler, the Office. for the Officer Chief released website. March call ended

materially following the within read company Statements to implied federal statements. detail results to need to no I begin, predictions due otherwise. future which call in statements from we forward-looking statements of or made events future expectations The comments a in forward-looking securities publicly are of contained any of discussed forward-looking this statements, those or filings. Actual any undertakes relate expressed to SEC events, the statement. during whether call statements Before in or variety of that because factors, results this forward-looking or new are obligation laws. information, or maybe update Any meaning our performance may in differ

turn over the I Doug. to Now that, with will call

Doug Doerfler

quarter, as MaxCyte's Swirsky, afternoon CFO. by thank Douglas everyone appointed the you, MaxCyte, will Thank Good a Sean. XXXX from you first for detailed at review known earnings with discussion followed and operational our of during and highlights joining a quarter financial begin I call. DJ recently our business

questions. We will for call the then open

is growth look financial, engineering sector. continued to multiple operational play forward an public strategic the We the leadership organizations. by life experience Officer industry-leading Chief team science healthcare a company. across two role MaxCyte leader pivotal DJ, like welcome joined start in a MaxCyte's to in companies, as with financial Financial off of will cell including would over NASDAQ-listed warm he our a seasoned decades to I brings expertise March. He extending as He who and

I well into Ron Ron Holtz, served as his as as to who new year, CFO transition is as MaxCyte's a our of MaxCyte. as for from contributions EVP the for DJ's Administration also moves company. supporting XXXX interim CFO, past as to and XXXX he thank role CFO dedication for the September

with expectations. MaxCyte began XXXX in quarter results the financial first with were line our

as set Although given DJ for I in prospects results. his extremely have challenges, expectations remain Despite plan. excited advanced technology the that the about I I determined therapy our to will to it and appropriate some enabling strategic the the more MaxCyte's of of is against challenges ability in will those in remainder discuss, this we industry for team's our that am our year. engineering confident lower for therapeutics about talk long-term deliver cell of a revenue development the of growing the platform, industry, cell-based premier the cell the

note that revenues including core You'll quarter from year. down are same our the business revenues our last quarter first

created had in more financial seasonality we It's half laboratories of elevated comparison in and six-month capacity resulted instruments disruptions PAs came to year-over-year on and in period the first COVID-XX-related back for full following spending which has that more near XXXX. a to difficult in in discussed expecting XXXX. As quarter's the call, first return are last typical XXXX, XXXX, we that in half a important note our performance of to than on

revenue levels purchases during of quarter. XXXX. programs, with believe into we PA regard first accelerated purchases in PA in product of generated our lower is the approvals, among were of in anticipation purchasing advanced core With in which resulting clinical some to $XXX,XXX Outside customers business, XXXX potential we milestone

their in the year. through several course of into development over clinical to make programs the progressing continue with progress partners Our development and

the for shows is clinical having XXXX call, challenging which and especially the with for markets year therapy programs. face of development, biotech In in environment, and industry. companies for of early-stage XXXX, some late-stage As quarter's discussed on preclinical assets prioritizing challenging on companies research are last smaller cell of pipeline the impact signs capital a a timing being projects

of expense seeing for We announcements instruments also have XXXX customers. measures will within describe undertaking progressed, caution the discussed including cutting detail. therefore base. impact months, we purchases timelines in macro customer as in the and environment, our therapy seen we hesitancy this impacting companies of We capital felt being our has and cell several increasing numerous March are as restructurings from and more recent investments such the that extended at environment coming DJ Within also PA in and timing increased

healthy disease more Despite term, value approaches remains in engineered molecules and a near the for of our platform. offerings the invest remain term. our nonviral toward companies or move those Cell and of and the our types and evolving confidence continue therapy in of headwinds, our strengths longer pipeline to to play opportunity strong including across that complex focus the variety cell editing formats therapies, in multiple

but partners to narrowing not on their development focus in they their our see aspects. lead as weakness we are core continue investments, customers focusing Our and do clinical SPL

program funded. As a continuing and clinic most the second through MaxCyte's tied well of asset, remains are the where to investment partner's programs lead progress reminder, partner clinical and/or is

continue to in non-SPL customers environment SPL progress even partnerships. toward this Importantly, our challenging near-term

so announcing far signed toward have this in partnerships more XXXX, two and we anticipate momentum year. We continued

cell programs tumor with announced support its therapy Bio January, In solid of variety types. partnership a treat to Catamaran a to we CAR-NK

innovative The SPL rare and our we last announce Walking expands into support with platform. Fish excited further Walking Fish portfolio B Just with cells program were week, a diseases. to partnership its partnership to Therapeutics, B-cell

of an potential Therapeutics factories of in sell XX MaxCyte enzyme is confident B-cell Walking gene in partners, Bio The total the platform as with partner of Fish Catamaran position high Fabry the vivo engagement and Additionally, choice the innovative partnership to in in this as continued bring developing remain Fish that platform deficient to we serve the expands application produce partnerships of innovators. of additions disease. to MaxCyte's number with Walking our as a and level protein

our transfusion-dependent premier potentially disease the commercially with MaxCyte's program, product to Drug cell the approved beta as cell and of request platform further announced a of Food by for enabled XL look thalassemia, and forward therapies. the the engineered Administration completion validate BLA first priority application and This for sickle be CRISPR of application review. the by would first would technology non-viral cell US utility to license product platform the which enabler non-viral granted recently and approval therapy FDA, We biologics rolling Vertex

investments growth, as well our strongly success. partners' customers So future far as to support in XXXX, our we ourselves targeted continue to position with and

on and expanded We are development. automation growing product our focusing enhancing development implementing capabilities in our our capabilities, technology and process ongoing commercial recently teams, manufacturing

the In We make cell to are believe next-generation we therapy these ensure support for therapy our investments addition, cell long-term in applications investments sector. lab, continue to the success MaxCyte innovators. ability to will which our right enhance and

our we Investor our last to week, steps Earlier governance to our disclosures. and can social report, found website. formalize took Late environmental on approach year, be which Relations issued inaugural key this ESG we

ESG, in understand challenges ongoing In that this patient including highlight better face. our initiative discrete populations to differential our XXXX efforts establishes report, launched value all our patient of the areas in for efforts we which

cell developing understanding challenges and bioethical social racial In an economic relating of the the and potential time we since developing initiative, are launching gene therapies. to this

taken with leaders the in novel them have we support We move reaching participate need enable proactively and efforts who findings these the most. they partnered opinion patients toward treatments that as key the

monitoring ESG communities our first sustainability with commitment share this report a to in citizen to We responsibilities, and support are patient businesses our role pleased broadly. for our share shareholders, managing and for more understanding of value and as our creating corporate to

challenging impact expect the we more XXXX, of operating summary, investments. timing in customers' will capital development a programs environment In our and which

space, developments long However, in short we these therapeutic see great over with term the as term. promise the

to confidence as continue industry the opportunities, remains as in partnerships value and have our to and we pipeline strength our which our robust enablement the provides SPL of in ever. Importantly,

critical execute made MaxCyte have investments We goals. strategic long-term on to positioning

commercialization. and partners remain partner We critical we believe engineering development support of to the to are choice support technology programs through non-viral for honored to cell our

innings to and remain for the MaxCyte. opportunity we therapy The the growth cell long-term early significant to and a gene about medium- industry therapies patients global to of optimistic very deliver in is

financial I that, will the DJ? With our now results. turn to discuss DJ call to over

Douglas Swirsky

Doug. our Hello, support very MaxCyte have I'm the everyone. for mission generation to of to Thanks, next team. excited joined the opportunity the I cell-based therapies. having appreciate

of to as impressed an therapies be the During quality in the team levels they work who time by them them need It our for is as innovative my the we I patients at of organization. all support with honor all our short most. to company, partners, develop continue with

revenue XX% Total In quarter. $X.X first the quarter in to was of decline. prior the a for compared results financial the MaxCyte's million core in million year quarter discuss $X.X decline. XX% million first now $X.X representing million quarter reported will XXXX compared of the I to first representing revenue we a of quarter, $XX.X in comparable first the XXXX

to year-over-year driven declined not of from disruptions. strongly year-over-year. which decrease unusually revenue was were of XXXX, near year-over-year programs revenues COVID-XX-related and typical late-stage by cell strong by patterns includes first million, $X following This see from The capacity half of discovery in and drug XX% therapeutic companies declined XX% pre-approval the an did our which back purchasing million, tied which of revenue customers and $X.X impacted seasonality full laboratories

outside of seasonality. to of SPL of historical consistent to discussed the experience the recognized As we first quarter compared expect on in year's first about We less in quarter XXXX of with $X.X million first the core typical quarter's $X of occur revenue this million revenue XXXX last of year in XXXX. last program-related call, half our XX%

able further confidentiality program-related be our progress or not to agreements. revenue on will details We discuss due our partner's to SPL

Margins XXXX as influenced the margin first the the we in of the first types in P&L. XX% compared products those down and customer quarter in XX% highly effects quarter. quarter variable prior well revenues of to as saw milestone and year. of Moving Gross by were first mix the the was

corporate and of and and for well offerings were Total equivalents XXXX driven as and $XXX.X was of compared expenses quarter expansion business, the The development combined consulting in headcount XXXX. first short-term no and overall total as growth. to marketing, million in operating the the and of quarter R&D, as sales and commercial the as course million of and expenses operating company long-term investments product and $XX.X with XX, debt. first first innovation primarily of in to quarter for increases We expenses March XXXX sales increase strategic million invest the cash finished continues in marketing in $XX.X cash of by

X% between We between to SPL XXXX of for XXXX, XX% Moving revenue expectations approximately and to total unchanged core program-related and expect grow at our updated million XX% compared to full remaining revenue year. and for year now revenue including XXXX guidance. $X X% growth the

purchasing updated the partners, environment and customers our guidance Doug challenging incorporates Our timing macro patterns the of which from discussed. and

previously discussed have our revenues. core the and regulatory we customers' to difficult timing revenue of it's As than on is partnership fundamentally more clinical progress predict and therefore predicated

a program-related revenue potential partnerships Our and XX planned is our across outcomes achievable progress. announced expectation under risk-adjusted forecast clinical various their

roughly expect we I first to back weighted before of in second experience XX% XX% to and continue historical with half XXXX. As half our would be a core revenues XXXX which consistent mentioned, seasonality half split

to end equivalents with million expect our we to and $XXX note position strong short-term And want cash no finally, approximately as financial investments cash, year debt. and in this I

potential to us allows long-term our position business cash model. on focus realizing the Our of

Let that balance we for our modest confident believe future are revenue me plans that profitable updated burn we and XXXX will cash outlook by our debt-free our sheet saying support and in growth. close overall

to back call Now the I'll over turn Doug.

Doug Doerfler

we're premier platform about engineering who not lead We're long-term of our depth as In DJ. the therapeutics may technology the and treatment have pipeline. industry committed optimistic summary, to our you, MaxCyte the development opportunity supporting of Thank partnership otherwise advanced strengthening cell-based the outlook patients the of for to cell options.

the development board, the as therapies that honor As amazing of have always to and MaxCyte our as well and investors, families. industry their commercialization team we partners of suppliers, our patients and enable for serving thank we the

turn I to over will call the that, Q&A. Operator? With the operator for back the

Operator

Thank [Operator Gordon. Instructions] Panmure Our question you. comes Julie first from Simmonds with

open. is line Your

Julie Simmonds

And the whether as guidance is you and divisions evening. a of this recurring on the questions the in -- capital more the and discovery separate split difference quick cell sort therapy of clearly in one Good effect as drug you. Thank more revenue? couple on and of slowdown there far whether just any ones between two

Douglas Swirsky

on and projection So that. based the we expectations take at our a our look revenue entire across business developed

-- bit partners. be heavily some are is some very are the these and on the think going very the of comfortable SPL I what's little subsectors or late-stage a industry, Obviously, with on programs more the on product with our within People in are sectors hit pipeline. their others. happening of than capital focusing focused product to are constrained people as we're

So a result about to of thought how our reduction all across of the business it looking I guidance this further. down at hesitate I we terms think in as and in opportunities of break

Julie Simmonds

the on as expecting of then at cost fact are of that the all does sort the and And the now? side of R&D, as The taking to that plans run scale rate or sales in things. change line similar down investment just top you terms of the you're rate marketing a at or continue

Doug Doerfler

the still at moderated. that, that $XXX have we So we expectations time are are the the last end saying said we'd of though thought, year, revenue even being we that million

So of we're being costs. mindful

our to our continuing not take strategy. conditions to what in business we're consider going we and temporary long-term we're away invest However, market let from

Julie Simmonds

much. Thank very you

Operator

One question. moment next for our

Our next question Dan comes Stifel. with from Arias

Your line is open.

Dan Arias

or just for instrument how us doing purchase guys. outlook doing installed much Thanks, expectations – you're of to versus of for here, industry on naturally customers due you're that how Doug given is what an of and your of about. your then DJ the to outlook Thanks that utilizations the is maybe versus due the will explicit sort can just things also the from the you're lower forecast on talking a And lower systems? you of hearing clarify what just much space questions. we're or prudent an headwinds tough from assumption be more what more customers

Douglas Swirsky

to customers with a team. our our it's close think and team I customers combination sales potential and field factors. our very of We're applications

thinking. direct sort our this So a into of that's lot feedback factoring of is

about But again, we out not about We things people very terms not optimistic installed In of of our versus in of feel going terms see we're softness this – ourselves. of detail in for this out us terms we of set we're PAs of the good break against where markets. find going and instrument and book to like business we again, have softness. where are goals base front break in that sales the the see where we're in terms executing it to the we in seeing and we

what making and to just capital think capital working people And I be being excited deployed scaling and there's are the why our are expectations back very now space investments the they're year. on and a with right we're just where MaxCyte people that's moderating in for been general in slowdown

Dan Arias

don't to trying horse. I not beat – a I'm Okay. dead

given understand, it. came our instruments into doing you hard think be the utilization so a to understand is placement of in nature out business a dig people I at sort math the just the going that clip. dynamic for can and and And why door quarter. might But by most way, people lower this way the have of

Thanks. on to in in that is that you there a usage And it not the systems you us because not modeling by this to that give that a can one something when have the there them in in does particularly work this is to comes on you're flux. of that maybe when is offer corner it those again, now company. the be with going thing temporary other anything going that's seem and So quarter lot right general there's comfort

Doug Doerfler

Yes, Doug. it's Dan,

continues be progress and in the both I us We're in to utilization. commercialization. of frankly that So continue business their and strong not and think part clinic seeing programs is any SPL on I in they want for very to the that in weakness area very one do placements through our partners focus to towards

Douglas Swirsky

that point sort I doesn't also as inconsistent want last QX. of this of was isn't to as with out first recognize strong expectations. that QX all quarter – do We it year's year-over-year

back into that. laboratories ordering people and and again things getting think that out I that went things a back there lot coming COVID-related disruption after of of was like people

expectations a this read-through met year is we guiding now. of the believe first drop of any rest bit So that there's year we're don't here for it our little a last beyond of the quarter and but real the what from really

Dan Arias

Thank Okay. you.

Operator

One next for moment our question.

Stephens… Our Johnson, comes Jacob next from question

Hannah Hefley

XXXX your or you is taking for over Hey, SPL on towards more presentation How weighted are This Thanks three good these highlighted afternoon. the Hannah these the for events? – for Jacob. events investor XX of total question. milestone XXXX? In potential next are the many pre-commercial And years.

Doug Doerfler

So I comfortable we revenues number. and still We've last looked really I sticking million a the milestone that bottom that $X plan different that. towards and scenarios we from delta $X really at we three the little when meeting, built think that's Hannah. year of number with by in We've feel a And quarterly talked a guided million think we're total up.

Hannah Hefley

Thanks, I’ll leave it there.

Operator

One question. moment next for our

from comes question TD Cowen. next Our Mah Steven with

Steven Mah

taking Great. not, emerging if I'm medium-size the the just or questions. disclosed bit small you are a tough the revision. little that a in versus pharma? you but How guide to Thanks for sure how -- and rough customer biotechs us sense just breakdown give on guys many for more not And versus you dig large Maybe could have? this

feedback that revision demographic? And particular to or you guide board customer on impacted was across your breakdown, feedback. by whole the can't customer was one if weighted it that mentioned you the across it give base, customer Was

Doug Doerfler

No.

scientists in day. question. pretty company, every so field As for Steve and salespeople pretty a we're the SPL I of good small are strong a -- well -- we the application thanks the number a partner. people mention, the for have What field, and -- we it's did hearing we're very field who in have

We're basically macro for of numbers. monitoring may haven't collectively. think I We're them the in this we be numbers. looking some seeing basis. And a that showed daily so at And frankly, stuff some feedback on getting yet, up we're that macro

kind some across items more board, little bit situation a getting belt tightening seeing I think where are dollar larger you're think still So a I capital the amounts scrutinized. that of there's that

companies In levels of capital we're approve some higher establish seeing cases authority to certain purchases.

the So elongated a being cycle I basically think bit the as across is just time dwell the well board. little time that

Steven Mah

capital think generally you And given sneak $XXX to markets what I question us helpful. an at a you appetite? appreciate outlook Would would M&A are year-end. or guys? target cash cash be of, and million guiding That's ideal in. But I we Okay. for like how give a any about one be last And should the would can technology guys of color reduce valuations, Thanks. sense it that could your bolt-on be you a helpful.

Doug Doerfler

Yeah. have the It's -- now handful very active. identified sensing we right company. on of opportunities of There's marketplace. lot a the going for We've a in

mentioned in handful I bolt-ons. be aren't I'll before, They're we've As going problems. more to -- these them going call identified be commodity to a of

platform attractive the I've about talked portfolio. adding think Technologies. Adjacent into for talked some will we Process Technologies I've be Analytics about other which very to our

driven issues And again, think to adequately that believe product that characterization we those I it's facing the be identify But potency. to industry. and to continue the going are by issues ability product

the provide Those are consistent that can anything And main hard more for taking we and drugs. at. to a accelerate areas therapy we're look the two cell manufacturer manufacturing these time do

Steven Mah

you. Thank Great.

Operator

One next question. moment for our

William question Matt comes next Blair. with Larew from Our

Your line is open.

Madeline Mollman

Matt. Mollman on for is actually Madeline This Hi.

things more you've the Just needed pressures approvals that. with purchase equipment about like of thinking capital talked cycles, about some longer

you because or or all Are through the any moving that's think sort a moving SPL -- taking clients or at of process there? by longer longer of partnerships taking into discussion your seeing of people agreements do some SPL, that, of impacting you time your

Doug Doerfler

five the Madeline. this seeing we and really is the seeing already had forward. thanks question, deals a which and We're for -- lot progress mean historically We've important good two three deals. move I to of for really SPL just pace that's we've have something between somewhere companies expect we the good partners. We're to in really keep these signed year

clearly events So moving driving the we're environment. and those And slowdown value-generating toward event to value-generating seeing this companies not a deals. something are of in any these major is clinic typically

Madeline Mollman

you. this has sort Rockville And like utilization fully bit, Thank utilization Great. up would would where I trending about past you support it facility, level a What backing And when talk your consider, multiple scaled. about ability the you year? of be you said scaled? see the a it commercial a can to then, know in thinking fully considered products that you

Doug Doerfler

Good question.

is And -- what have our we've in here. instrument capacity manufacturing out So built and we we dramatically a for really what about terms our told also that, of don't disposables. talked we have think manufacturing I manufacturing have increased we

will making investments We are capacity. translate major Automation. in also make more flexibility and into more Automation -- to continue

So success. We're commercial we're monitoring their our monitoring partner's progress. potential

frankly And of ahead we're we of make partners. automation staying can those well of demand investments ahead And well the the that.

So as the support into commercialization. very to with comfortable we all of move they partners, our how feel capacity SPL

Madeline Mollman

Great. Thank you.

Operator

One moment for our next question.

next Mark Our from BTIG. Massaro comes question with

Your open. is line

Vidyun Bais

Hey taking for Mark. Vidyun on Thanks guys. is for the This questions.

keep the would So, that one decision opposed on I thought core to I a little to would maybe as that the was guess of $X guidance million. lumpy more the business. tend I revenue to DJ, have FPL be curious revenue for

there? of guys have the revenue. walk So I some degree I you think what's about you guess giving could past inclusion confidence talked through us approval milestone And just in you of

that curious be? able out So Thanks. contribution what if break just might you're to

Douglas Swirsky

for question. Thanks the

XX So for about we're that got And get comfortable our number million at us a can revenues is year. scenarios modeling milestone expectations we out unchanged SPLs, the that remain think we've we $X multiple regarding generate that way with. helps the

different like. billion. And normal combinations to looking that But many the with But we was that different of without on that call potential assure that $X can -- there We're our year payments came out the distribution we is think could that we us not about a probably some still And many I when do later-stage of at and get certainly was lumpy. million curve. now. what of it ways milestones $X just different last it's it number $X many are component being it's the -- look or of how process and that ways million that. do a you

the hopefully something going number think number $X to look but smart, probably center so will that it's tells me around be million we that And I not exactly.

Vidyun Bais

about Understood. margin here given quick then And Okay, in about heard guide, the from just I perfect. step cadence how just down gross think targeted one, talk a we I should investments. more you think the also

So just any comments you there? have

Douglas Swirsky

just And which revenue. things, gross in reminder We've so as different types how milestone determined. different a margin got is of the terms of of revenue, is one

And we to so of well good going the margins. the mix the at lumpiness level. in to contributes the revenue we cetera. or getting milestone the feel But lumpiness continue about it's in et to and be We're that in XXs high also fluctuations the that think -- as as got our we margins instruments, very

Vidyun Bais

Thanks, Thank you for the awesome. taking question.

Douglas Swirsky

you. Thank

Operator

any Ladies gentlemen, closing over conclude like to Doug remarks. the this of does and the Q&A for call to back today's turn portion conference. I'd

Doug Doerfler

XXXX year. great call joining and And doing later operator for look for today's the I'd quarter thanks thank and joining like earnings this to this everyone the DJ quarter an and supporting on update the second our call. forward work thanks we're providing and Well, is first team to

all very much. you thank So

Operator

Ladies and conclude this today's does gentlemen, presentation.

and a now wonderful have You may disconnect day.

MaxCyte (MXCT) 10 May 232023 Q1 Earnings call transcript