MaxCyte, Inc. (MXCT) is a cell-based therapies and life sciences company that licenses and sells products, instruments, and technology to drug developers and biopharmaceutical companies. MXCT made its stock market debut on July 30, 2021, through an upsized initial public offering (IPO) of 23.50 million shares, priced at $13 per share. The stock is also listed on the alternative investment market (AIM) of the London Stock Exchange.

The company raised $175.50 million in gross proceeds through this offering, which it plans to utilize to fund its research and development expenses, expand its manufacturing capabilities and sales, and business development and general corporate purposes.

MXCT opened at $16.99 on its first trading day, 30.7% higher than its IPO price. However, the stock declined 36.2% since then to close yesterday’s trading session at $10.84.

Here’s what could shape MXCT’s performance in the near term:

Impressive Growth Prospects

MXCT has been leveraging the rapidly growing cell therapy industry to boost its product portfolio. According to the American Society of Gene and Cell Therapy, more than 3,400 gene, cell, and RNA therapies are in development globally as of July 2021. MXCT’s intellectual property portfolio consists of 50 granted U.S. and foreign patents and 76 pending patent applications worldwide, as stated in its IPO prospectus.

Out of the over 75 clinical program licenses associated with our existing special platform license (SPL) partnerships, more than 15% are in the clinic, meaning they have at least an FDA-cleared investigational new drug application. 13 of MXCT’s SPLs have the potential to generate over $950 million in pre-commercial milestone payments, provided they achieve regulatory approvals. The company’s customer base includes all of the top 10 biopharmaceutical companies and 20 of the top 25 biopharmaceutical companies in terms of 2020 global revenue.

Risk Factors

MXCT has been incurring losses since its inception in 1998, and it expects to remain unprofitable for the foreseeable future. Analysts expect the company’s EPS to remain negative until at least this year. As of March 31, 2021, MXCT's accumulated deficit stands at $102.30 million. Its limited product offerings and rising expenses are expected to keep its profit margins low. Moreover, several MXCT products are yet to receive full FDA approval, without which they cannot be commercialized.

In addition, as an emerging growth company, MXCT is focused on strengthening its product portfolio and has stated its plans to reinvest its revenues to fund its research and development expenses. Thus, MXCT’s return on equity might remain negative in the foreseeable future.

POWR Ratings Reflect Uncertainty

MXCT has an overall rating of C, which equates to Neutral in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.

MXCT has a grade of C for Value, Stability, and Quality. The stock’s negative forward non-GAAP P/E and relatively high 1.18 beta are in sync with the Value and Stability grades. In addition, the company’s negative net income margin and ROA justify the Quality grade.

Of the 58 stocks in the Medical – Diagnostics/Research industry, MXCT is ranked #27.

Beyond what I’ve stated above, you can view MXCT ratings for Growth, Sentiment, and Momentum here.

Bottom Line

MXCT’s strategic partnerships and product portfolio should allow it to become a leading player in the life sciences industry. However, the company’s continued negative profit margins are a cause for concern. Moreover, the stock is currently trading below its 50-day and 200-day moving averages of $10.72 and $12.49, respectively, indicating a death cross downtrend. Thus, investors should wait until MXCT becomes profitable before investing in it.

How Does MaxCyte, Inc. (MXCT) Stack Up Against its Peers?

While MXCT has a C rating in our proprietary rating system, one might want to consider looking at its industry peers, Global Cord Blood Corporation (CO), Bruker Corporation (BRKR), and Agilent Technologies, Inc. (A), which have an A (Strong Buy) rating.

MXCT shares were trading at $10.10 per share on Tuesday afternoon, down $0.74 (-6.83%). Year-to-date, MXCT has declined -0.88%, versus a 0.61% rise in the benchmark S&P 500 index during the same period.

Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities.

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