STIFEL 2026 HEALTHCARE CONFERENCE - MAXCYTE INC

Financial Performance:

• Announced acquisition of Akron Bio for $150 million; Akron contributes $28M in revenue with 13% CAGR growth since 2018 and is EBITDA positive with strong free cash flow.
• Combined entity expected to generate $60M+ in revenue next year; current gross margins are 80% (MaxCyte) vs. 60% (Akron), projected to settle in the high 60s to early 70s for the combined group.
• Anticipating $3M–$4M in cost synergies (primarily G&A) by H2 next year; full-year cash burn expected to decline to < $17M, with projections to drop below $10M next year as Akron revenue and organic growth scale.
• Q3 results showed 100% YoY growth in instrumentation and 20% in consumables; Q3 revenue beat expectations, driving a shift to low single-digit H2 growth (15% annualized) rather than previous low single-digit expectations.
• Customer concentration remains moderate, with the top customer representing ~27% of revenue; exposure to small biotech is estimated at <30% of total revenue and <25% of SPL pipeline.

Guidance and Future Outlook:

• Management expects full-year growth for next year, driven by a robust instrument funnel across research, GMP, and commercial sectors, and the resolution of prior inventory drawdowns.
• Revenue growth projections for Akron are conservative (early-to-mid teens) for the next year, with acceleration expected as commercial programs ramp and synergies from cross-selling mature.
• The 2026 funding environment is viewed as stable ($3.5B in 2025), with a shift toward later-stage and commercial programs, signaling an end to the "program culling" period of 2025.
• 2027 guidance is withheld as management remains prudent, avoiding over-promising following 2025 lessons; focus remains on executing Q4 and realizing organic growth momentum.

Business Segments and Product Lines:

• Akron Bio Acquisition: Strategic addition of best-in-class cytokine/growth factor reagents for ex vivo cell therapy (viral and non-viral), complementing MaxCyte's electroporation platforms; reagents are stable in liquid form at refrigerated temperatures and possess referenced Drug Master Files.
• Genentech Deal: A major non-SPL "Pharma Model" win after an 18-month competitive displacement process; involves upfront hardware sales across multiple pre-clinical and clinical programs without backend royalties, differing from standard biotech licensing.
• Instrumentation: Strong uptake in the Genentech deployment and broad-based pipeline; expect further instrument installations in Q4 and next year, with revenue ticking up as Field Application Scientists (FAS) begin support.
• Consumables: Growth expected due to resolved inventory drawdowns and stability in SPL pipelines; consumable-to-box (pull-through) rates anticipated to increase year-over-year.

Market and Competitive Landscape:

• Market shift remains heavily skewed toward ex vivo therapies (>90% of clinical/commercial assets), with in vivo programs (<10%) still largely pre-clinical due to safety and complexity concerns.
• MaxCyte and Akron are positioning as consolidators in the cell therapy ancillary market; Akron's reagents are described as ubiquitous in cell engineering, out-competing larger legacy players on stability and quality.
• The "Pharma Model" represents a new commercial avenue to monetize large pharma upfront purchases, contrasting with the royalty-heavy SPL model used for smaller biotechs.
• Funding trends show stability with 19% growth in funded clinical programs in 2025, but capital is increasingly selective toward late-stage and commercial-ready assets.

Risks and Challenges:

• Integration Risk: Acknowledged but deemed low due to Akron's established leadership team (Ezekiel Zilberberg, Dave Smith) and complementary sales forces rather than overlapping roles.
• Program Rationalization: While deemed largely behind, the risk of customer pipeline closures remains inherent to the industry, particularly for small biotech clients.
• Cash Burn Management: While reducing, the company still relies on reaching specific cash flow milestones (<$10M burn) to ensure long-term financial stability alongside growth.
• Market Volatility: Dependence on the biotech funding cycle remains a factor, though management notes a shift in funding toward more commercial, less volatile programs.

Management Commentary and Tone:

• Tone is confident and optimistic, emphasizing the "hand in glove" nature of the Akron deal and the strategic advantage of having scale.
• Executives (CEO Meher Masood, CFO Parmeet Ahuja) highlighted the successful commercial transition of MaxCyte and the immediate financial stability Akron brings.
• Management stressed a "no surprises" approach regarding guidance, prioritizing prudence and execution over aggressive forward projections.
• Emphasis was placed on the stability of the commercial team, citing recent hiring from key competitors (Sartorius, Thermo, etc.) as a driver for the current funnel health.

Analyst Questions and Answers:

• Akron Growth Rate: Analysts questioned why Akron wouldn't grow faster than its 13% historical rate given synergies; management clarified that initial growth will remain in the mid-teens until commercial ramp-up accelerates.
• Genentech Economics: Clarified that the Genentech deal is lucrative upfront but lacks royalties; it serves as a "proof of concept" for a repeatable enterprise sales model with large pharma.
• Customer Concentration: Addressed concerns about biotech exposure; confirmed large pharma now represents a significant portion of revenue, reducing vulnerability to small biotech cash constraints.
• 2027 Outlook: When pressed for 2027 numbers, management declined to provide specific figures, reiterating the commitment to stability and learning from 2025 guidance errors.
• Inventory Issues: Confirmed that inventory drawdowns, particularly with the largest customer, are resolved, paving the way for consistent consumable growth.

Other Key Points:

• The Akron acquisition transforms MaxCyte from a platform provider to a comprehensive solution provider for ex vivo cell therapy, covering both engineering (MaxCyte) and reagents (Akron).
• Integration of sales teams is planned as a slow, complementary process rather than a disruptive consolidation, with MaxCyte's US/Asia/Europe teams expanding Akron's non-US reach.
• The Genentech deal marks a strategic pivot to penetrate large pharma through upfront hardware sales, a model distinct from the royalty-based licensing typical of biotech clients.
• Management highlighted that the industry's "program rationalization" phase appears to have bottomed, with a stable environment now favoring growth for established players like MaxCyte.