Earnings call transcript Q2 2023

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Operator

Thank you for standing by, and welcome to MaxCyte's Second Quarter 2023 Earnings 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]

I would now like to hand the call over to the Head of Investor Relations, Sean Menarguez. ahead. go Please

Sean Menarguez

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

Doerfler, On Executive and Chief Officer. Officer; is Swirsky, Chief J. President the Douglas MaxCyte call Financial from Doug and

available XX, copy of the today, financial for results A Earlier company's the second release XXXX. is on MaxCyte released quarter the website. ended June press

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

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

Doug Doerfler

Chief thank and by a of detailed quarter begin for with Officer. during quarter, followed Thank our highlights Financial the our Good afternoon a business call. financial I you, Sean. from everyone joining second discussion earnings MaxCyte's you XXXX will and DJ, operational review

will We the up for then open call questions.

continue business. macroeconomic this, be term we excited challenging the pipeline has in in R&D in and and the cell R&D cell MaxCyte industry, of are in has in therapy annual The the spending. quarter softness programs health about resulted spending million experienced XXXX therapy outlook reported environment. second from which $X a growth confident Less of prioritized the as nominal revenue long believe resulted updated our our industry. in we industry to Despite for we has evolving

is year. excited robust, premier pipeline high the partnerships far five MaxCyte's this remain partnership extremely and engineering, the sell highlighted for platform the about support so for remains engagement I Our growing industry. Customer opportunities our technology by and as

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

on with has year the The preclinical stage on environment. industry industry and XXXX companies early been focused by stage last to the for markets quarters impacted discussed capital small has continues cell trials. macroeconomic stage As been call, challenging late factors development therapy assets investment, for prioritize a especially which clinical in multiple R&D pipeline challenging including programs biotech

seeing this processing investments cycles in instruments backdrop, continued purchasing and from resulting assemblies. our With are we for capital cautiousness extended in customers,

difficult growth negative will half Our year-over-year in comparisons, exacerbated a DJ were few and in minutes. first of XXXX rate the by discuss which

by in now their with clinical lead approaches cell second progress, variety headwinds, toward customers of assets are cells including engineering complexed of and cell SPL are for we investment, some focus assets. our enabling through encouraged their we progression where partners While remain our or investments, partners and their active our are the development, clinic. These generally types. often evolving on engineered therapy the steps therapies, move industry engineering to non-viral increased disease molecules an these briskly of continues cell expanding an and focus across Outside more multiple

level these has engagement which the believe customers. a current MaxCyte to driven We trends platform, prospective industry the of and strength play on high continued

signed has platform. view being led SPL to our derived value pipeline which five this robust from partnerships supports the Our of our year,

including new Lyell three and Biotherapeutics SPL Prime partnerships August, we Immunopharma, announced Medicine. and ViTToria July In

allogeneic CAR-Ts to CAR-Ts. previously partnerships expanding only from next generation Lyell new Our and modalities, with diversify ViTToria therapeutic portfolio exposure into autologous our our

our up significant for a opens solid commercial MaxCyte. which exposure revenue In opportunity to addition, indications Lyell expands tumor

the CAR with transducing consists [indiscernible] including a First factor. CAR-Ts viral generation autologous into insert one T-cells your of set, engineering

the unique approaches. on and cell which focusing additional editing more As expand approaches has edits tools, complex evolves for to with are non-viral shift applications gene engineering and developers the therapy, further cell field accelerated the

in to techniques in trends. Lyell field well advance and highlighted these the allogeneic cell evolving to MaxCyte ViTToria engineer nonviral continues Furthermore, partnerships, complex and settings. positioned address the both as is market autologous

The breadth engagement SPL the clinical is with of commercial translational and partnership result academic our funnel of broad centers customers.

translational working SPL University of therapy X.X center. commercializing new customer both their University toward was out our a of proprietary Pennsylvania Pennsylvania's which example partnerships ViTToria the developed being in technology, recent of have of work ViTToria is segments with with cell We GMP developed

their supports which generation Medicine is broad the novel enabling. almost example is which applications forefront the platform many a Prime genetic across all range mutations backside types. of of cell repair at a therapy, platform, and tool organs with of targeting partnership Medicine prime another Prime of the editing next cell tissues, technology and expanding of Our editing of gene is types

SPL are their clinical which their environment narrowing focus led have to through assets and funding the partners in to continue positive progress our lead their Given progression to clinic. the months. readouts and events are The critical of current they the the environment, programs such often capital evolving data through raises recent operating clinic in

for example, diseases. We to of expansion applications pursue also our indications seeing existing the are new partners CAR-T autoimmune including

is platform into example, the doses. MaxCyte of This scalability expand that indications where believe Based clear they cell has performance MaxCyte the for therapy key solid partners the autoimmune for of platform our and or often we on tumors, advantage. is competitive decisions, require the development. is innovative platform multiple choice cell As a therapy

cell our thalassemia. program. a this announced the exa-cel exa-cel the to program product commercial CRISPR sickle year, first Earlier beta submission completion We of BLA the disease FDA platform, for look forward to enabled by of transfusion dependent the and Vertex and approval

approval exa-cell Vertex the MaxCyte's receiving sites to updated endpoints. non-viral pivotal XX, More for met application trial first platform and PDUFA thalassemia engineered March recently This primary cell validate X, at the therapy the non-viral sickle therapies. dates as of beta exa-cell utility the the cell disease FDA further The XXXX and showing would granted European was would for key of hematology enabler conference, data data thalassemia engineered sickle presented premier of cell and data the product be beta from by that December XXXX pivotal cell respectively. secondary integral and and

provide presentation. Our medium with Slide our potential opportunity, MaxCyte potential reach highlighted To context long on programs, share unique term scale more the partners we the as of provide and the partnerships of to commercial on this our corporate XX tier has commercialization. opportunity term MaxCyte in those new programs revenue performance where

with are exa-cel launch disease in wave XXXX by XXXX include seven second a thalassemia, and followed launch of sickle in aware, first expected shortly potential commercial As we of XXXX. beta and approvals, which between be potential cell you approaching the may of partner potential the thereafter wave therapies commercial

The second diseases. spans genetic and blood therapy wave cancers, of lymphoma across tumor solid including leukemia, and

commercially between by well, programs therapies preclinical of to launch a currently our revenue window partners. a partner is substantial MaxCyte our portfolio success and programs for developed of opportunity third includes more XX eight with of The these only with XXXX. The being in development as grow XXXX commercial commercial continues partner and preclinical portion than potentially from the opportunities

revenue has XX announced partnerships billion strategic to milestone or signing date million about XX% commercial to approximately by this partnerships. total increased across following the of $XXX Additionally, potential year, pre the five $X

the in growth, serve support effectively and XXXX, the market, on SPL enhancing we development fortifying future to expanding market. our investments our by and These our technology petition with our In best partner and targeted investments to process product development driven base. capabilities include focused customers ongoing

In next the MaxCyte addition, we continue that our the to in to of the growth therapy applications of are cell support generation therapy innovators ensure sector. these make are will term cell pursuing success We support which complex lab cell long to ability in investments investments therapies. our right enhance the believe

value be access and working in Large further System VLx launch such applications. currently customers define The is on is manufacturing as to the several of on clinical early for The VLx continues preclinical protein Transfection stage ExPERT the trials. to Our focused early applications potential focused Scale transient instrument across proposition VLx applications development broad development to with address to market. scale the current so solution large customers and in they bottlenecks flexibility. workflow have enable with customers can to shorten including data, the with access integration bioprocessing key of forward timelines transfection engagement provide capabilities and We market look the compatibility early

are through evolving of our team working operating year, and which and an members summary, this the our impact challenging capital programs investments. environment customers, In timing will development

the strategic remains confidence intact. technology we outlook long in goals. provides And The long degree the updated full However, industry. a the high and industry term importantly, cell of term over we substantial to promise therapy maintain the of our in confident are value our year

and XXXX potential We the are by of a pipeline opportunities. the we in additional of partnerships robust SPL signed excited

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

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

Douglas Swirsky

Thank Doug. everyone. Hello, you,

Total revenue second million quarter, second revenue customers the This $X.X year and comparable in from representing both compared the to reported in representing revenue prior was drug of customers quarter in of million declined from million, XX% which XXXX $X.X the decline. compared cell million, In second to quarter the revenue discovery of X% $X.X million $X.X million $X.X we a of decline. of $X includes therapy XXXX, year-over-year. quarter core to XX% a

of the last of pipeline environment Recall customers half oftentimes for revenues in core work R&D, returned purchasing in from first changes. causing the to COVID was some decline from benefited demand challenging that cycles assets instruments at year, pent-up The the customers as to business leading following lab prioritization policy MaxCyte purchasing result elongated operating and PAs. and the of

SPL from strong In a growth commercialization. addition revenue partner approaching stage later to

prior as SPL second million $X.X the no their related clinic, in revenue first recognized of continued program our on of program instrument quarter business, of compared SPL partners to second color material quarter to compared related comparable XX% the XXXX for through provide PA revenue progress more the in We XXXX. core of down the the were year half XXXX period. the sales To and

first XXXX in previously in later for research PA challenging program impacted PAs. customers that deprioritized progressed The customers lower instruments the and stage. seeing from regulatory PA a was stage stage demand at increased primarily we're lower by programs of within investments and and funding purchasing half development environment to As seen filing has cycles earlier the capital our in utilization from cautiousness discussed, the resulting extended

growth partner, prior by clinical Revenues grew the particular this stable the with from a SPL year of also XXXX our spot to bright driven primarily compared first utilization partners. instruments SPL period remain the for leased Excluding of a by partners platform remains our X% and half of year-over-year. PA

manufacturing in-house the was influenced costs. the of sales second of the driven second up quarter legal the in expenses million gross XXXX increases to and expenses. The XXXX. $XX.X XX% in overall quarter for was prior operating by production marketing lesser and of quarter down to were related margin compared second Moving were the expenses the XX% by ramp quarter a in compared P&L, primarily of negatively R&D, of Margins second and in million XXXX year. $XX.X extent, in operating consulting the headcount to strategic and Total increase

continues $XXX development, to and of innovative field cash company well corporate no with automated application and investments scientists, equivalents drive in to as product operations, invest cash, The quarter commercial term total term and finished course, as the development short sales growth. debt. marketing We of second business capabilities, long million and combined manufacturing

comparable revenue for a we're at million for core full our related now previous XXXX. XXXX $X XXXX And remain guidance to our updating SPL unchanged expectations guidance, year from to outlook Moving be program approximately year. expect to revenue the and

and timing purchasing challenging the incorporates and guidance partners. environment from cautiousness around updated customers patterns our of Our the macro

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

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

model. Our cash to long well realizing of position focus is potential us as future the a strategic into funded on our profitability, company allowing we term are asset for business the

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

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

Doug Doerfler

Thank you, DJ.

the about summary, optimistic the during of are depth are and for about we and outlook progress In pipeline. term partnership excited increasingly our partnership half first MaxCyte the long our

cell premier We supporting to committed have not our to engineering the the based are advanced of opportunity therapeutics patients lead strengthening cell for as who the technology, platform may treatment industry development options. otherwise

that investors, suppliers, our we amazing as always, have our we and As industry team, the board, thank well serving. partners, the MaxCyte patients, of as honor

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

Operator

of from Gordon. first [Operator of the line question comes Panmure Instructions] Julie Our Simmonds

Julie Simmonds

couple please. Thank much. of very A you questions,

about potentially to wondering therapy because just is cell that pricing for there's looking that customers of anything sort be just the much lighter there do do it? any to that alternative think causing that Is any issues slightly Firstly, that how they to delays angle at. or And sort with looking manufacturer delaying through reasons causing coming of sort financial also revenues be coming of Is that through. of methods do that is with the slowdown? of non-viral at could could the competitive you

Doug Doerfler

and competitive always out. Doug. seeing any Hi issues coming in No, we're not major people It's Julie. there's some

with in product Lanza Thermo doing we've comes We we've and Fisher - sorry, I'm out. - in Xenon their that so it have had their had

the I the of product based belt look of at data, think the look stage all kind sales seeing It's at on the we we're where tightening the companies, shortfall. all developers, when the that's really we early early reports.

We're or SPL still typically pretty strength recently the A funding. And seeing it's, tightening either all Series B it's And belts. can really their part there. Series funded, it's of these that companies as business. you just But aren't significant they're well very our received out tough imagine, they're in

Julie Simmonds

they're it's get to last this that's nothing far Are of of boost, more probably there's think this profile there's just be you because strong? to of to you coming the QX of versus QX companies decisions through year sort on given half similar of timing, Or making so looking QX, towards normally first a well year, big - as wondering the these throughout, was your concerned, been in measured - the interfering with end is sort things. want the as So And market. sort going lead terms one do a for of year? the detail

Douglas Swirsky

know, that's that on book purchases think you expecting, the We're clearly going a you And looking Julie. heavier opportunities specific QX. know, and we business you, Thank at, based are really of occur. to when

do I QX well not QX heavier but slightly as what to as guidance, quarterly here. would see history on be we So, thinking you in as, know, based wait provide versus definitely we you know, specifically

Julie Simmonds

Okay. Thank very you much.

Douglas Swirsky

Thank you.

Operator

our Please you. question. for by Thank stand next

Our next question comes from Arias Stiefel. the line of Dan of

Dan Arias

the just one details observation purchases this that you're it's that are of pulling me. seat are as and some or definitely mid year, teen so it can to, year, for for prioritization purchase companies the flat the back to that Excuse this sort you product, the a on Thanks lines comes outlook your just you you're looking some Can seeing emerge the you're be at guys. extending questions. half afternoon, the And or and just Good the Doug, question but would DJ which just then about about that talking of for what been last sort you is, that far. referring the of delaying of about? tightening from nuances follow along timelines. back expressed of you talk one, when of the confidence belt revived seemingly the part up that talk you're know, down

summer? might higher Thanks, know, you half the you view the is maybe a and So, a a that extent up visibility growth on comment stepping the to informing to back the have bunch. order that book

Doug Doerfler

Dan. hear Nice to your Thanks voice.

rationalizing is really is typically a not raising back assume partners A stage Series board - of when this companies of across seeing partners. and point. B. in were at had substantially couple we preclinical portfolio. companies I the are softness pretty some One their product early obviously, early So the these Series those We've that in things. We're pulling really we're our kind talking, of They're them

say We're pivotal. been companies preclinical. stage through late You've abandoned taking to over considerably have seeing seen Unfortunately, they're we're in announcements the certain the basically to seeing to And they're their six like have recently, we're pipeline last, to dramatically assets months. going layoffs folks that seeing to most look move cut We're restructuring. their invest charts, if they in even quite programs, that seeing, also I XX by to want field. we're

the other talking getting or And partner they trying capital companies getting to ways for to big those. revenue are of about, - those gaining, off

it's think covered I you've all So think seeing I across particular, the in don't pretty board. we're the well. It's different things. anything waterfront those

Douglas Swirsky

of terms looking back the In at of half the revenue. year

revenue had model gets together. we've think I how our sight line of into, good put

headwinds opportunities, these already reflected Doug out projections that we've our those moving think all at, and in pieces just business in mentioned, factored we've of the for particular terms we've of XXXX. and I that of, looked

that was a half need for we very back get reasonable and understand comparison. of I terms in a down, four half So, to level the year-on-year first second to

here reasonably But our confident emphasis an on with QX. we're forecast in

to I I back end the a think, But have sure working we at make a hard reasonable QX. year. think looking

we're to for level of of versus QX think up I a most year where make reaching the revenue deficit terms the in is for comparable XXXX. the going

Doug Doerfler

what And and Until this people meetings, attending significant they add good commercial first attendance we're to side go the seen. we're meetings, getting leads increase in then which shows, in let coming in in. of me to to we half really also the really the a saying back trade the going in marketplace on on at they're seeing I lot want Booth business, traffic, of amount hadn't recently, year, a of DJ think activity

I XX salespeople coming let's of and organization. made the marketing their their are in finding over to new as say, of think, They way building in sales the business. we've investments months, last, also, some book six

the confidence well in the DJ we're to that seeing as the said, commercial So I want that to activity marketplace. add as

Dan Arias

Thank guys. Okay, you. appreciate it,

Operator

you. Thank

comes Stephens. of Our the Johnson Jacob from line question of next

Jacob Johnson

looking I'm on afternoon. now? this are of have Maybe have something coming these do your your some selective about question balance right on Good additions, at the just sheets, curious, the some being balances that you're more cash SPL just opportunities Hi, is be way seem to this recent companies, decent happen a they to stronger or end thanks.

Doug Doerfler

of our know, lot it's path - with before we're have think these some programs. get Commercial time we finding Operation down negotiations. I do Yes, you lot more what we of that more a we're folks as check, to Obviously advanced is of the a says, spending far of too Head

a think recognize combination. So really of it's whole year of deals in to I cell I these terms did the the this are we kind some therapies. just, of want that, But engineered also field pushing of envelope

And, obviously, forefront is the of of this one at prime last an whole us example area. being the

comes treating more, maybe So curing and diseases. into of of companies more capital some with that these novel for maybe more these ways they're moving that as new potentially

Jacob Johnson

for of one for Doug, in customers maybe just in on OpEx of DJ, than environment, Thanks this of kind more and a environment, the Are to year. revenue are? expenses that Okay. you manage bit like this little and lighter a obviously, all OpEx you start the your outlook managing kind trying

Douglas Swirsky

XXX%, we're guidance, revenue short still of investments. here, maintaining ending in equivalents, with and cash our term goal a we $XXX moderating and have, although we're million year the

growth a cash we're but that that So, to as - strategic asset. grow operating sure expenses, mindful I going to year-on-year for And make we they we we the of have that the to second did are treat quarter, hard continue is work slowing. think

the time, going really in this still same by that model. our the of to viability spending. we're our we of and business being And believe long-term protect we're At industry that supporting mindful

in in want and I to advantage we'll in G&A that items because to continue perhaps, we we of are in the and And to of sales of need investing opportunity mindful but those so take the us. side, front R&D, invest fully terms in again, marketing, be think on

Jacob Johnson

sense. it the Thanks makes for questions. Got taking

Douglas Swirsky

Thank you.

Operator

Thank you.

line Our of the of next question Larew William Blair. comes from Matt

Madeline Mollman

down versus margin I ramping gross costs increased This ask Hi. facility it margin. year-on-year. Mollman little year, how much that bit lower is that. new just like tied for this up And new I about actually of is in costs.? the additional to from wondering a things sits facility to the just into Madeline to was Matt. how is on tied and the for the you said gross know moving much and revenue I volumes wanted

Douglas Swirsky

to to bulk absolute a facility. PA in in decline related ramping that The up of the margins relates manufacturing

Madeline Mollman

to Great. half the you back the Thank of over the then margin you. And how gross do year? cadence that of anticipate

Douglas Swirsky

I think obviously heavily to dependent margin be gross mix. is on going product

additional cost We also revenue some which to anxiously no are us. additional milestone awaiting comes at

be of the So gross I by influenced to is overall think those achievement the milestones. margin, heavily

get automation which, operating over of margins worked up terms time as through that. expect and investing on PAs, In running, those we'd the the like higher we facility to things in sort of and getting

Madeline Mollman

you. thank Great,

Operator

you. Thank

line BTIG. question next Our comes from Mark of of the Massaro

Vidyun Bais

Thanks Hi the on year guys. for there. on signing the end your I'm This to taking questions. is I beat outlook per of sorry. Vidyun Mark. SPLs high three already for of four

looking you've generally the any or guess the think will I SPL is I candidates. So beyond therapeutic impact there core in funnel? visibility SPL the that revenue past your dynamic the talked to guide, about

So wondering many comment under maybe in clinic new the could active programs I'm SPL the if you during into Thanks. factoring quarter? how additions are on also

Doug Doerfler

the around of on lead those SPL assets? asking Well we are which the signed, question, question. relationships of you repeat could revenues and are which Is the SPL I of didn't part so that you

Vidyun Bais

just guess. cadence core there's deciding Yes asking years? was I good three the year, any impact, guide about was four coming in to just feeling on but the I Yes, SPL. revenue, And want if obviously, the down per I to broadly, still you're

Doug Doerfler

we And see [indiscernible] we guess. about about later, absolutely. Yes, I let's that - also talked make

these I these think they're tough, with. tough the that majority So assets yes, are of programs, And working there are companies. lead no,

prospects the this and prospect the year next about for year. excited quite we're So,

Vidyun Bais

out then event rate, digit mid-single closer topic, about to and Okay, in years, but we'd right partner if the your first kind get there? milestone low your we obviously as upcoming difficult a I key royalty payment, the end, guess, to and contribution model I it's, mid-single we maybe But ballpark quantify digit of to know, be key a to thinking yes, approval, a And here. it's from perfect. were

Doug Doerfler

digits said of always to of would the partner. mid-single the the percentage we've be No, low top line

that, that So would leases, the I the include low mid to and would disposable revenue. appropriate single think number total, use when model be royalties, more of instrument you for that and

Vidyun Bais

Okay, perfect. Thank you question. the taking for

Doug Doerfler

you. Thank

Operator

question from [Operator the Mah you. of comes Cowen. Steven line next of And TD Instructions] Thank

Steven Mah

Hi guy.

So, A taking thanks already. for the of lot questions. ground covered

just So questions. follow-up some

follow-up guide. So on the question

Given that at sales the cycles, revenue was gives SPL softness given maintained longer guys on what some million, that, and macro X the confidence you you guys have mentioned?

Doug Doerfler

big we as how guide the the as for maintaining $X It question, them? we're confident that are million in about

Steven Mah

right. Yes, that's

Doug Doerfler

confident mean, number. I we're very in that

and modelled that and scenarios, we on, pretty we've So or feel come that would influence you a that. have with not. of imagine And can that good few eyes out we particular that risk approval and about our heavily that up there's adjusted a achievement how

Douglas Swirsky

or we're I to their working think asset, their not And generally, to partners, with again, that, them also which from prioritizing well, they're we're us. first investment going well add right is we're backing so off pretty these working the we're SPL seeing financed. where companies, second with now,

Steven Mah

in-house manufacturing normalizing? the PAs gross Okay, of assuming a impacted great. scale that's that case, If were just see follow-up costs when on number should question to on due the over we smaller the to the start that Thank a amortizing I'm that's on in-house based products. the you. fixed impact And on gross then margins margin manufacturing. the you that

Douglas Swirsky

don't think timetable. a we I Again, have

number trail influenced I moving I up. I into that expect can't specifics by on think give to of think And we'd sort volume. it cross back margins. you historical is

it's in-house items such to of other but related a of of some and controlling destiny, is as these in think did able some our of the partners I being reasons, it and bring support a costs, manufacturing lot to particular. of which own lot PAs, to related our for

Operator

you. the to this At Doug turn closing for remarks. I'd back time, call Doerfler Sir? like to Thank over

Doug Doerfler

update the you participating. and for And all providing forward you, Thank on year. thank thanks, our today for to we third look earnings quarter Okay. operator later much. an call you joining everyone and very Well, thank this

Operator

This concludes today's Thank conference participating. for call. you

disconnect. now may You

MaxCyte (MXCT) 9 Aug 232023 Q2 Earnings call transcript