RGAIA Investment Advisors, an independent, privately owned asset management firm recently published its second-quarter 2022 investor letter – a copy of which can be downloaded here. RGAIA Investment Advisors believe over the long run, letting winners ride is critical to exceptional results, and letting companies intrinsically compound is critical for optimizing after-tax results. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, RGAIA Investment Advisors mentioned MaxCyte, Inc. (NASDAQ:MXCT) and explained its insights for the company. Founded in 1998, MaxCyte, Inc. (NASDAQ:MXCT) is a Gaithersburg, Maryland-based commercial cell-engineering company with a $498.1 million market capitalization. MaxCyte, Inc. (NASDAQ:MXCT) delivered a -50.34% return since the beginning of the year, while its 12-month returns are down by -70.58%. The stock closed at $5.06 per share on September 05, 2022.
Here is what RGAIA Investment Advisors has to say about MaxCyte, Inc. (NASDAQ:MXCT) in its Q2 2022 investor letter:
“MacCyte, 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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Our calculations show that MaxCyte, Inc. (NASDAQ:MXCT) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. MaxCyte, Inc. (NASDAQ:MXCT) was in 10 hedge fund portfolios at the end of the second quarter of 2022, compared to 12 funds in the previous quarter. MaxCyte, Inc. (NASDAQ:MXCT) delivered a 21.34% return in the past 3 months.
In August 2022, we also shared another hedge fund’s views on MaxCyte, Inc. (NASDAQ:MXCT) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
