MaxCyte Inc

MaxCyte Inc (LON: MXCT) is an AIM listed Pharmaceuticals & Biotechnology Company having focus on cell-based medicines. The Company will release trading update on 18 January 2021.

Investment Highlights - MaxCyte Inc – Expensive at GBX 540.00

• Despite the good progress made with cell therapies and growth in commercial license partnerships, the Company might face liquidity risk if fail to raise adequate liquidity and obtain funding.
• As per valuation metrics, EV/Sales, EV/EBITDA and Price/Cash Flow multiples of the MaxCyte Inc are currently higher as compared to the corresponding multiples of the Biotechnology & Medical Research industry, reflecting overstretched valuations.
• The Company’s Profitability margins and ROE (return on equity) stood in negative zone from past 5 years.
• From the technical standpoint, 14-day RSI is in overbought zone and is currently supporting downward movement (around 78 level), which means the stock price could decline in the short term.

Key Risks

• Significant competition in the industry could affect the revenue and profitability of the Company.
• Any change in regulations and government policies could affect the overall business of the Company.

Trading Update (released on 23 December 2020)

• The Company expects full-year performance to be ahead of market expectations, driven by a strong momentum witnessed in transformational cell therapies.
• MXCT witnessed growth in clinical and commercial license partnerships, which resulted in milestone payments.
• The Company along with Locust Walk, continues to work on future funding and strategy of CARMA business.

One Year Share Price Chart

(Source: Refinitiv, chart created by Kalkine Group)

Valuation Methodology: EV/Sales (NTM) (Illustrative)

Conclusion

The Company has shown improvement in financial performance in the first half of the financial year 2020. Both the top-line and the bottom-line performance increased, while profitability remained in the negative zone. MaxCyte expects FY2020 financial performance form core life sciences business to be ahead of  market expectations. Overall, MXCT is well positioned to capitalise on cell therapy market. Despite the impact of the covid-19 crisis, the Company continues to expand operations globally. The stock made a 52-week low and high of GBX 116.00 and GBX 555.00, respectively.

Based on the factors as highlighted above, we believe the stock of MaxCyte Inc is “Expensive” at the current price of GBX 540.00 (as on 4 January 2021, before the market close at 8:00 AM GMT), with support from increased demand for cell therapy and next generation gene therapy needs to be evaluated at a later stage.

*All forecasted figures and Peer information have been taken from Refinitiv, Thomson Reuters.

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