MaxCyte: Powering Ex-Vivo Gene Editing $mxct
Casgevy, Allogeneic CAR-T, and Electroporation Technology
Investing in the picks and shovels behind the biotech gold rush sounds good in theory. Instead of taking a lot of science risk by investing in individual companies developing therapeutics, one can instead invest in the players providing equipment, consumables, and services for those developers. In practice, investing in these picks and shovels has been a challenge as of late. Maravai’s mRNA capping technology powered Pfizer/BioNTech’s Covid vaccine, but there are real questions as to how the business will fare if mRNA applications move away from infectious diseases. Danaher is a genuinely great business, but if you bought the stock after it dropped ~30% from late 2021 to the summer of 2022, you’d be about flat over a three year period.
MaxCyte ($MXCT), a supplier of electroporation instruments/consumables that enable ex-vivo non-viral cell therapies, would also fit into the biotech picks and shovels category. As with quite a few other small cap life science tools businesses, its stock price has cratered 90% since going public in 2021. Even better, if you’d bought at the beginning of 2025 you’d have lost over 60% of your money.1
Ex-vivo non-viral cell therapies refer to treatments where:
Cells are treated outside the body
Whatever alters those cells is delivered using a method that doesn’t involve containing that alternation mechanism within a virus
The most immediate applications of this approach are for treating genetic diseases. Casgevy, a treatment for sickle-cell/beta thalassemia, takes a patient’s blood stem cells, modifies those stem cells using CRISPR-Cas9 to knockout the BCL11A gene, and then reinfuses blood cells back into the patient. This is the only FDA approved CRISPR therapy, and MaxCyte powers the electroporation process. Less immediately, companies are working on ex-vivo non-viral treatments for certain blood cancers, B-cell mediated autoimmune diseases, and solid tumors. Of these three, blood cancers have FDA approved, ex-vivo, viral treatments as a template.
FDA approved ex-vivo cell treatments for blood cancers (CAR-T therapies) share two commonalities:
They use a patient’s own T-cells.
They deliver the CAR (chimeric antigen receptor) to the patient’s T-cells using a virus (and so don’t use electroporation technology).
I’ve written previously about the challenges with existing CAR-T treatments and the promise of allogeneic (meaning donor-derived, rather than patient derived) approaches. Put briefly, autologous (patient-derived) treatments are costly, take weeks to manufacture, entail further weakening a cancer patient’s immune system, and require that a patient’s T-cells are sufficiently healthy. The last part isn’t a given when one’s already undergone rounds of heavy cancer treatment.
Allogeneic CAR-T treatments instead use donor cells, but this has its own set of challenges. Again put briefly, the donor T-cells are unhappy to be in a foreign environment, and so attack the patient (this dynamic is termed graft vs host disease); the patient’s T-cells and NK cells are unhappy that foreign T-cells have entered the body, and so attack the donor T-cells.23
The hope is that we can leverage gene-editing to dampen these host and donor immune responses. This dampening happens in two ways. The first is by using a double-stranded break to knock-out one or many genes in the donor T-cells, much as Casgevy does with autologous blood cells. The second has to do with where the chimeric antigen receptor DNA is actually inserted within the donor T-cell.
As said above, among FDA approved CAR-T therapies the CAR is delivered to T-cells via a modified virus. The virus then integrates into the T-cell DNA, and the chimeric antigen receptor is successfully expressed. Importantly, delivering the CAR inside a virus means we have very little control over where in the T-cell DNA the virus and CAR integrate. In the case of allogeneic CAR-T therapies, there’s a preference for non-viral delivery. Moreover, gene-editing tools mean we can actually be picky about where the CAR integrates.4 The CAR is typically inserted into the T-cells’ TRAC locus, knocking out TCR expression and thus limiting graft-vs-host disease.
MaxCyte’s electroporation instruments/consumables can enable this non-viral delivery. There’s a lot of complexity here, but crudely speaking these instruments deliver an electric pulse to the cell, temporarily opening up the cell membrane and allowing the gene-editing complex to enter. Using a viral vector to deliver the gene-editing package isn’t a good option, as that requires delivering the complex in the form of DNA and so increases the risk of off-target effects.5 Consequently, developers prefer to deliver the complex as either mRNA or as an already formed protein. Both of these will be cleared out relatively quickly by the cell, thus diminishing the risk of off-target effects.6
MaxCyte’s business model is straightforward to understand. The company provides instruments as well as the consumables required to run these instruments. MaxCyte sells instruments to academic customers, but rents them out to any customers developing a therapeutic. With these customers it also negotiates a Strategic Platform License (SPL) agreement; these agreements include milestone payments and, most of the time, a royalty agreement should a therapeutic be commercialized. SPLs are a vital part of the business and represent a real strength when compared to a company like Maravai. The challenge with existing as a supplier for a one-time sickle-cell treatment is that the addressable patient population isn’t that large. This doesn’t matter as much when you’re Vertex and are collecting a hefty sum per dose, but it does matter if you’re a small Vertex supplier like MaxCyte. Royalty agreements ensure that MaxCyte can keep its own business economical even when powering one-time treatments for genetic diseases and refractory cancers. As one would expect, instrument and consumables usage grows as clinical programs progress from early-stage to (hopefully) commercial availability.
MaxCyte’s focus on leasing out instruments, in combination with its SPL agreements, explains why margins have historically averaged over 80%. While margins are strong, revenue has not grown as expected. After peaking at ~44mm in 2022, the top-end revenue estimates for this year (32.5mm) are actually modestly below where revenue was in 2021 (33.9m). This weakness has been driven by what one would expect given the biotech market generally: lower than expected consumables sales, longer than typical instrument sales cycles, and rationalization of customer clinical programs. Interestingly, the installed instrument base has still grown nicely since its Nasdaq IPO, from over 500 in 2021 to 814 as of Q22025. The challenge has really been around weaker customer usage of these instruments.
MaxCyte could be a compelling buy here, for the following reasons:
It’s a supplier for a lot of the flagship gene editing companies, including CRISPR Therapeutics, Beam Therapeutics, and Sana Biotechnology. As mentioned above, it’s a supplier for Casgevy, the only FDA approved CRISPR therapy.
It’s not a perfect index on the success of allogeneic CAR-T therapies taking off, but it’s a pretty good one. Its electroporation devices enable cell therapies leveraging a wide variety of gene-editing technologies (TALEN, ARCUS, etc), not only CRISPR.
Its price to book ratio is ~0.75. The company does not carry any debt.
There are of course risks:
Allogeneic CAR-T treatments could end up not living up to the hype. Maybe it’s just too difficult to get donor T-cell persistence in a patient. If these treatments don’t work, it’s very unlikely that any B-cell mediated autoimmune disease or solid tumor approaches would still hold any kind of promise.
Allogeneic CAR-T treatments could end up working, but only those developed by a company like Intellia, which explicitly doesn’t use electroporation to deliver the gene-editing complex. Again, this would in turn have implications for autoimmune disease/solid tumor clinical programs.
In vivo gene-editing therapies end up taking off but ex-vivo therapies do not. MaxCyte’s electroporation technology isn’t needed for in vivo treatments.
Competitors in the space, such as Lonza and Thermo Fisher Scientific, start taking a lot of market share.
The end market could continue to deteriorate as it has since 2022.
These are all real risks, and ultimately if allogeneic CAR-T treatments don’t succeed in clinical trials then MaxCyte probably isn’t going to be worth much. Intellia’s decision to not use electroporation for its CAR-T treatments is a fascinating one and may lead to good outcomes, but Casgevy’s efficacy at least indicates that using electroporation is unlikely to render a treatment unsafe or ineffective. Additionally, Intellia is in the minority with its approach; MaxCyte is a better way to bet broadly on the success of the allogeneic space. It would be a little strange if in vivo gene-editing therapies took off while ex vivo didn’t, but it’s not a totally implausible scenario. AbbVie recently bought Capstan Therapeutics, whose lead asset is an in vivo CAR-T therapy for B-cell mediated autoimmune disease. A successful in vivo approach would pose a real threat to alternative ex-vivo approaches as well as ex-vivo CAR-T treatments for blood cancer. In my view it’s difficult to be overly concerned about competitors: the quality of customer logos make it clear MaxCyte offers a compelling product, and unlike Thermo Fisher/Lonza the company’s success is almost totally dependent on winning in this space. A lot of the thesis here does come down to valuation: MaxCyte’s powering key players in an emerging space where investor hype got out over its skis too early. Now things have gone in the entirely opposite direction, and I think MaxCyte is a way to bet on things reversing.
Disclaimer: The information in this post is not intended to be and does not constitute investment or financial advice. You should not make any decision based on the information presented without conducting independent due diligence. There is very real science risk here!
Disclosure: I hold a small position in MaxCyte.
MaxCyte actually initially went public on the LSE back in 2016, raising 14.4mm USD. The company recently delisted from the LSE and now only trades on the Nasdaq.
For a fascinating example of where this dynamic can actually be helpful, I’d recommend the ILTB interview with Oscar Health CEO Mark Bertolini. Skip to the section on his son’s bone marrow transplant.
MaxCyte’s technology can also be used in the development of autologous therapies, but no current commercial CAR-T therapy uses a non-viral method. The real excitement about non-viral approaches is really when it comes to editing donor cells.
I’m saying gene-editing tools rather than CRISPR-Cas9 because companies are using more than just CRISPR to edit cells. Eg. Allogene is using TALEN, Imugene is using ARCUS.
Off-target effects occur when a non-target strand of DNA is also edited by the gene-editing complex. This can happen when the gRNA comes across a DNA sequence that’s substantially similar to the target DNA strand. As one might imagine, it can cause real issues if a non-target gene is inadvertently knocked out of commission.
From the transcript of the FDA Cellular, Tissue, and Gene Therapies Advisory Committee meeting that covered Casgevy: “the RNP, Ribonucleo Protein Delivery Method is generally the shortest pulse that can be achieved with Cas9 gene editing and is expected to have, thereby, the shortest degree of off-target risk.”