Upcoming Cell And Gene Therapy Milestones Are Expected To Transform Long Term Royalty Prospects

Catalysts

About MaxCyte

MaxCyte provides electroporation-based cell engineering platforms and related services that enable the development and commercialization of advanced cell and gene therapies.

What are the underlying business or industry changes driving this perspective?

• The advancement of 5 SPL partner programs into anticipated pivotal studies over the next 6 to 18 months, alongside expectations for commercial launches in 2027 and 2028, should convert today’s under-monetized clinical footprint into higher milestone and royalty revenue. This would support faster top line growth and improved operating leverage.
• The growing pipeline of 32 SPL partners, 18 active clinical programs and roughly 20 preclinical programs targeting launch potential into the next decade increases the probability of multiple commercial winners and creates a long duration royalty stream. This can compound revenue and earnings beyond what current valuation implies.
• The industry wide shift toward curative cell and gene therapies, reinforced by supportive FDA leadership and increasing payer and investor acceptance, positions MaxCyte’s Expert platform and SeQure DX assays as core enabling technologies. This should sustain premium pricing and high gross margins as volumes scale.
• The restructuring that reduced headcount by 34% and is expected to deliver $17 million to $19 million in annualized cash savings from 2026 materially lowers the operating expense base. As a result, even modest revenue reacceleration can translate into improved net margins and a quicker path to profitability.
• The planned 2026 commercial launch of a new Expert platform line extension, already in beta use, together with rising SeQure DX assay demand as off target testing becomes a standard regulatory expectation, should diversify revenue sources and increase recurring consumables and services mix. This would support higher earnings quality and margin expansion.

Assumptions

How have these above catalysts been quantified?

• Analysts are assuming MaxCyte's revenue will grow by 22.4% annually over the next 3 years.
• Analysts are not forecasting that MaxCyte will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate MaxCyte's profit margin will increase from -132.6% to the average GB Life Sciences industry of 15.5% in 3 years.
• If MaxCyte's profit margin were to converge on the industry average, you could expect earnings to reach $9.8 million (and earnings per share of $0.09) by about December 2028, up from $-45.6 million today.
• In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 93.3x on those 2028 earnings, up from -3.6x today. This future PE is greater than the current PE for the GB Life Sciences industry at 34.6x.
• Analysts expect the number of shares outstanding to grow by 0.61% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.96%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• The funding environment for ex vivo cell and gene therapy has been depressed for longer than management anticipated and commercial adoption has been slower than expected. If this persists it could limit customers' ability to buy instruments and run programs, pressuring core revenue and delaying the path to positive earnings.
• Several large SPL and clinical customers are consolidating or rationalizing programs, creating a known drag into at least the first half of next year. If more programs are cut or delayed, the expected milestone and royalty ramp from the SPL portfolio may not materialize, weighing on long-term revenue growth and net margins.
• Third-quarter core revenue declined year on year despite high gross margins, and even after a 34 percent workforce reduction management still expects cash burn of roughly $10 million to $15 million in 2026. If revenue does not reaccelerate, this operating deleverage could sustain losses and delay earnings inflection.
• The growth thesis relies heavily on long-dated milestones such as SeQure DX assays becoming an industry standard, a 2026 Expert platform launch, and multiple SPL programs reaching commercialization from 2027 onward. Any technological displacement by competing tools, regulatory shifts in off-target testing requirements, or clinical setbacks in partner pipelines could reduce expected royalty and services revenue and cap margin expansion.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The analysts have a consensus price target of $6.68 for MaxCyte based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $9.0, and the most bearish reporting a price target of just $5.0.
  
• In order for you to agree with the analysts, you'd need to believe that by 2028, revenues will be $63.2 million, earnings will come to $9.8 million, and it would be trading on a PE ratio of 93.3x, assuming you use a discount rate of 8.0%.
  
• Given the current share price of $1.54, the analyst price target of $6.68 is 76.9% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.