RGA Investment Advisors Considers MaxCyte (MXCT)’s Business Model To Be High-Quality

Investment management company RGA Investment Advisors recently released its second-quarter 2022 investor letter. A copy of the same can be downloaded here. The fund is not happy with its portfolio’s relative performance in the second quarter. High inflation and actions of the Federal Reserve to manage the inflation affected the market’s performance in the second quarter. You can check the top 5 holdings of the fund to know its best picks in 2022.

RGA Investment Advisors discussed stocks like MaxCyte, Inc. (NASDAQ:MXCT) in the second quarter investor letter. MaxCyte, Inc. (NASDAQ:MXCT) is a commercial cell engineering company headquartered in Rockville, Maryland. On August 22, 2022, MaxCyte, Inc. (NASDAQ:MXCT) stock closed at $5.29 per share. One-month return of MaxCyte, Inc. (NASDAQ:MXCT) was 9.68% and its shares lost 41.34% of their value over the last 52 weeks. MaxCyte, Inc. (NASDAQ:MXCT) has a market capitalization of $561.581 million.

Here is what RGA Investment Advisors specifically said about MaxCyte, Inc. (NASDAQ:MXCT):

“MaxCyte, Inc. (NASDAQ:MXCT)– Cell and gene therapies are the frontier of innovation in biotech. MaxCyte is uniquely well positioned to benefit, irrespective of who the precise winners are, as a pick and shovel provider to the industry. MaxCyte develops and sells electroporation instruments, that possess “unparalleled consistency and minimal cell disturbance.” Like Cytek, Maxcyte boasts a razor and blade business model, with high gross margins on both the instrument and consumable piece. The instrument is mission critical to edit the DNA of a cell outside of the body and it cannot be used without MaxCyte’s proprietary consumables. In research, customers use a single instrument, but as a study moves to the formal FDA clinical process more instruments are deployed and on an approval down the line, far more. Beyond the razor and blade revenue pools, MaxCyte’s tools are so valuable that their customers sign on for “Strategic Platform License” (or “SPLs”) arrangements. SPLs offer MaxCyte licensing revenues as milestones are achieved and a percent of revenues once a treatment is approved for use. The company is partnered with 17 leading cell and gene therapy companies for these SPLs. Not only would a single approval from one of their 95+ partner programs justify the current valuation, but significantly more than one approval is plausible. On top of this, we purchased MaxCyte at a price where over half of their market cap is pure cash and at their present rate of burn, the company has over a decade of cash needs covered. As such, the market is giving very little credit to a high quality business model with unique optionality.”

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MaxCyte, Inc. (NASDAQ:MXCT) is not on the list of 30 Most Popular Stocks Among Hedge Funds. As per our database, MaxCyte, Inc. (NASDAQ:MXCT) was held by 10 hedge fund portfolios at the end of the first quarter, which was 12 in the previous quarter.

We discussed MaxCyte, Inc. (NASDAQ:MXCT) in another article and shared Casdin Capital’s top stock picks. You can check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other prominent investors.

Disclosure: None. This article is originally published at Insider Monkey.