Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- MaxCyte Inc (MXCT, Financial) reported a 15% increase in total revenue for the second quarter of 2024 compared to the same period in 2023.
- The company signed five new Strategic Platform Licenses (SPLs) in 2024, including a significant partnership with Legend Biotech.
- MaxCyte Inc (MXCT) achieved $6 million in SPL Program-related revenue in the first half of 2024, surpassing initial expectations.
- The company maintains a strong gross margin of 86% in the second quarter of 2024, slightly higher than the previous year.
- MaxCyte Inc (MXCT) has a robust cash position with $199.8 million in cash, cash equivalents, and investments, and no debt.
Negative Points
- Core revenue declined by 9% year-over-year, with specific declines in cell therapy and drug discovery revenues.
- Instrument revenue continues to be impacted by cautious capital spending from customers, reflecting a challenging market environment.
- The company has moderated its expectations for the VLX product, reducing investment in this area.
- MaxCyte Inc (MXCT) does not anticipate additional SPL Program-related revenue milestones for the remainder of 2024.
- The funding environment for cell therapy developers remains stable but has not significantly improved, affecting customer spending behavior.
Q & A Highlights
Q: Have you seen any benefit from commercial volumes on the PA or leased instrument side of things?
A: Maher Masoud, President and CEO, explained that while they do not break out CASGEVY's impact separately, the commercialization of the product could potentially include incremental lease revenue and PAs used in a commercial setting. However, due to confidentiality and having only one commercial stage partner, they do not provide specific details.
Q: Cell therapy and drug discovery both declined sequentially. Was this just seasonality?
A: Maher Masoud noted that while there was a year-over-year decline, sales have been consistent from Q1 to Q2. Drug discovery is a smaller revenue line and can be lumpy due to customer order timing. Overall, they are pleased with the solid quarter, consistent with Q1.
Q: Are there plans for more SPL agreements this year, given five have already been signed?
A: Douglas Swirsky, CFO, stated that while they aim to sign 3 to 5 SPLs regularly, the sales cycle can vary. They have a healthy SPL funnel and are confident in continuing to grow their SPL portfolio, but cannot promise additional agreements within the year.
Q: The gross margin on the core business is lower than historically. Is this due to in-house manufacturing?
A: Douglas Swirsky confirmed that excess capacity and changes in absorption rates due to in-house manufacturing impact margins. However, they believe this short-term hit is worth the long-term benefits of quality and capacity control.
Q: With VLX being de-prioritized, what are the future R&D priorities?
A: Maher Masoud emphasized a focus on developing complementary workflows and solutions for cell therapy customers. They have hired a new Head of Engineering to drive product development and maintain a healthy financial profile while focusing on R&D.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
