It sounds like science fiction — the ability to engineer a patient’s own blood cells to fight diseases such as cancer.
However, such technology has spawned a growing field of new drugs that can have extraordinary results. They work by removing cells from the body, genetically editing them, and then reinserting them into the patient.
This process,which involves injecting DNA instructions into billions of cells, is complex and can take many days. But a firm called MaxCyte, dual listed on Aim and Nasdaq, has built machines that can complete the process within a day.
It makes money by striking deals with developers researching cell therapy drugs. These deals include milestone payments once drugs progress through clinical trials, and then royalties once any medicines have been approved. The company is a way to invest in cell therapy without taking a bet on a single drug.
MaxCyte’s patented machines have attracted the interest of big drug-makers: it counts many of the world’s top 25 pharma companies as clients. After listing on Aim in 2016, it raised $201.8 million (£148.2 million) in July when it listed its shares on Nasdaq. So far, so good.
But the shares fell 15 per cent in America on Friday after the US Food and Drug Administration put on hold all the clinical trials being run by one of its partners, Allogene. The FDA wanted to carry out more investigations into an abnormality that had occurred with one patient in the trials. The delay could last up to six months.
Supporters of the company suggest this drop represents a buying opportunity; Allogene’s programmes represent just a small proportion of the 140 cell therapy targets that MaxCyte is working on with 14 partners.
At Friday’s Aim closing price of 722p, about half of MaxCyte’s £728.4 million market value is accounted for by cash on its balance sheet and by royalty payouts it is likely to receive over the coming years just from existing partnerships. That’s before the rest of its business has been accounted for.
MaxCyte reported revenues of $13.6 million for the first half of 2021, against $10.9 million for the same period a year earlier — representing growth of 25 per cent. It reported a loss of $11.5 million, compared to $6.1 million for the same period in 2020.
Panmure Gordon, MaxCyte’s nominated adviser and joint corporate broker, has a £12.60 target on the stock — which is hard to justify in light of the current performance.
However, up to about £10, the shares look cheap. Buy.
