Cell therapy is all the rage in medical circles. Cells are taken out of a patient’s body, modified and reinstated. In their new, souped-up state, they can fight the disease from which a person is suffering. The idea has been hailed as revolutionary, expected to help treat a wide range of conditions, particularly certain types of cancer.
In many cases, the process involves using specially engineered viruses to introduce the new material in the patient’s existing cells. However, viruses can be hard to control and people can develop immunity to them.
MaxCyte, an Aim-listed company based in Maryland, on America’s East Coast, has pioneered a different approach, using electric pulses to deliver disease-fighting molecules, such as proteins, into a patient’s cells.
Healthy: MaxCyte has signed 70 agreements with the world’s top drug firms
The group was floated on London’s junior market in March 2016 at 70p a share. The stock had shot up to more than £3 by April 2017, but has since drifted down to £1.61, with a fall of more than 20 per cent this year alone. This is unjustified and the shares should rebound.
MaxCyte chief executive Doug Doerfler founded the company in 1999 and the business has spent the past 20 years perfecting its techniques, working with deep-pocketed partners to turn theory into practice and practice into commercial treatments.
The business is now working with every one of the world’s top ten pharmaceutical groups on a range of applications using its proprietary ‘electroporation’ technology.
More than 70 agreements have been signed with big drug firms, half of which involve trials with actual patients. Under this partnership approach, MaxCyte’s partners fund most of the tests, trials, marketing and sales, but they also pay Doerfler as programmes develop.
This means that MaxCyte is making money, even though only one of its products has been launched commercially in a programme to treat kidney cancer in Japan.
In the past four years, turnover has almost doubled from $9.3 million (£7.4 million) in 2015 to $16.7 million last year.
Further increases are expected this year and next, as the business gains new partners and existing trials pass particular milestones. Even more importantly, the company’s technology could revolutionise treatments for diseases such as ovarian, pancreatic and brain cancers, as well as certain hereditary illnesses, including sickle-cell anaemia and haemophilia.
Approval for new products and techniques can take years, but regulators recognise that cell-based therapy has enormous potential – particularly with hard-to-treat cancers – so certain therapies are moving through the regulatory process at an accelerated pace.
Doerfler hopes that some of MaxCyte’s programmes will benefit from this approach.
The company is also addressing two key concerns around cell therapy – cost and time. Many processes are hugely expensive and can take weeks to engineer.
MaxCyte aims to reduce costs and speed up care – and trials are highly encouraging. If even one of its partnership programmes reaches the commercial stage, the company’s value would almost certainly rocket.
With 70 programmes up and running, the chance of at least one succeeding are high, especially as the firm is working with big and well-respected names in the industry.
In America, companies operating in this field have been taken over for several billion dollars. However, MaxCyte is valued on London’s stock market at less than £100 million.
Midas verdict: MaxCyte is working with top drug groups and its shareholders include established names in finance such as Legal & General, BlackRock, Jupiter and Hargreave Hale. The shares deserve to be considerably higher than where they are now. At £1.61, the stock is a buy.