MaxCyte, Inc.

Good day, everyone, and welcome to MaxSight's fourth quarter earnings conference call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question and answer session. To participate, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 1-1 again. Please note, this conference is being recorded. Now we'll turn the call over to Eric Apto with Investor Relations. Please proceed.

Good afternoon, everyone. Thank you for participating in today's conference call. Joining me on the call from MacSite, we have Meher Masood, President and Chief Executive Officer, Doug Sworsky, Chief Financial Officer, and Sean Menardez, Senior Director of Business Development. Earlier today, MaxSight released financial results for the fourth quarter and full year ended December 31st, 2025. A copy of the press release is available on the company's website. Before we begin, I need to read the following statement. Statements or comments made during this call may be forward-looking statements within the meaning of federal securities laws. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. Actual results may differ materially from those expressed or implied in any forward-looking statements due to a variety of factors which are discussed in detail in our SEC filings. Except as required by applicable law, the company has no obligation to publicly update any forward-looking statements, whether because of new information, future events, or otherwise. And with that, I will turn the call over to Mehar.

Thank you, Eric. Good afternoon, everyone, and thank you for joining MaxSight's fourth quarter and full year 2025 earnings call. 2025 presented a challenging operating environment, but it was also a year of meaningful progress for MaxSight. We continued to sign new strategic platform licenses, SPLs as we call them, and support customers in advancing drugs through the clinic. We acquired SecureDX and successfully integrated the business into MaxSight. We made meaningful changes to right-side spending and strategically improved our operations. And most recently, we launched a new product into ExpertDTX. that will allow us to work with developers earlier in research and development discovery. Let me start by reviewing our financial results. Consistent with the preliminary financials we announced in January, MagSci reported $33 million of total revenue for the full year, which included $29.6 million of core revenue and $3.4 million of strategic platform license program-related revenue. We grew our instrument install base to 857, up from 760 at the end of 2024. Doug will discuss fourth quarter and full year performance in greater detail. The MaxSite's results were within the range of expectations that we had updated you with in August. As previously discussed, the business was impacted by program consolidation and rationalization across some of our SKL customers, which included a 15% decline in purchases and leases from our largest customer, reorganizing manufacturing, and managing inventory. Now let me give you a little more detail on the launch of our new Expert DTX, which I mentioned earlier and I'm very excited to discuss. Even as we faced headwinds in 2025, our focus remained on innovation and leading the market with groundbreaking platforms. In February, we announced the launch of the Axford DTX, a modular 96-well electroporation platform designed for research and drug discovery applications. We are very excited about what this product represents for MaxSight. The DTX enables labs to transfect primary cells and cell lines across up to 96 samples in a single three-minute run. with consistent well-to-well performance that effectively eliminates transfection as an experimental variable. It is one of the most cost-effective 9-6-well electropression solutions on the market, with detachable 8-well strips that can be processed with unique parameters, giving researchers the flexibility to test different cell and cargo combinations in parallel while reducing waste. This software is also differentiated. DTF Designer allows users to design experiments remotely and upload workflows when the system is available, maximizing the instrument pipeline. That is a real practical advantage for labs running multiple back-to-back experiments. What makes the DTX strategically important is its full compatibility with the rest of the expert platform. A researcher can optimize a process on the DTX in discovery and transfer it directly to MaxSight's larger-scale electroporation instruments, the SCX or GTX, for scale-up into CGMP-compliant manufacturing without re-optimization. That is a powerful value proposition which allows us to engage with customers at the very earliest stage of their workflow and provide a seamless path from discovery through to the clinic and commercialization, all on a single platform, which is an epitome of a therapeutic platform. We built this product around our customers' needs, and we believe it will be added to both instrument and processing assembly, PAs, revenue in 2026 and beyond, as well as allow us to grow our SPL customers. We have built years of electric creation know-how and expertise into DTX, and I am confident we launched a product that will allow researchers to seamlessly progress from discovery to the clinic onto our GMP expert platform. Turning to our guidance, as we enter 2026, the challenges that impacted growth in 2025 will have an impact on the first half of 2026. For our 2026 guidance, we expect total revenue to be in the range of $30 to $32 million, consisting of $25 to $27 million of core revenue and $5 million of SGL program-related revenue. Given the timing of purchases and leases, we expect Q1 to be our lightest quarter for core revenue with a back half-weighted year. Included in our guidance is the impact of a recent notice received from an SPL customer terminating their license for reasons unrelated to our platform's performance, along with approximately $4 million in core revenue headwinds from select SPL customers, which began to impact for revenue in the second half of 2025, which I will provide further detail on. We continue to believe that the headwinds facing our business are a result of the conservation of capital by buying techs in the cell therapy space, rationalization of customer programs in ex-people cell therapy, and inventory management in our largest customer, which we expect to stabilize in the second half of 2026 and grow from that new base. There has been no fundamental change in the demand for our technology and the differentiation of our technology competitively. While these short-term headwinds influenced our revenues last year and the first half of this year, We are more excited than ever of our SPL programs and the business model, which is seeing multiple programs progressing deep into the clinic and much closer potential commercialization. As I mentioned, embedded within the core revenue guidance, we expect revenue from SPL customers, including our largest customer, to be a $4 million headwind relative to 2025. This is about half from processing assemblies and half from leases and a result of two factors. First, our largest customer reorganized our supply chain in 2025, impacting inventory management of PAs. Additionally, in 2025, due to manufacturing site reorganization, there was a reduction in leases mid-year, so the full-year lease revenue for this customer has a difficult comparison to last year. Following in-depth conversations with this customer, we expect both PAs and leases will stabilize during the first half of 2026. Second, other SPL customers rationalized programs in 2025. On a net basis, we lost six SPL clinical programs during the year. The annualized revenue from the discontinued programs, including leases and PAs, will not recur in 2026, reflecting the headwind mentioned earlier. The 12 clinical programs we currently support are across 11 SPL partners, highlighting continued investment on the lead asset. This rationalization is part of our business model, as we expect a certain number of biotech programs to discontinue, but we are consistently signing new SPLs and supporting later-stage clinical programs, which will eventually be commercialized utilizing our platform. In the last 24 months, we signed 10 new SPLs and are now supporting more later stage programs than ever. Also embedded within our core revenue guidance, we expect revenue growth from non-SPL customers, which is inclusive of growth from SecureDS. With regards to SPL program-related revenue, as I shared, we are guiding to $5 million in 2026. Note, we received a seven-figure milestone payment from a clinical customer that began dosing patients in a pivotal study in the first quarter. The balance of DSPAL program-related revenue guidance includes approximately $2 million of expected royalty revenue from a commercial-stage customer as the therapy ramps throughout the year. Despite these near-term headwinds, we are very encouraged by the medium-term opportunity for five clinical programs to enter pivotal studies over the next 18 months and potentially receive commercial approval in 2027 or 2028. As I mentioned, one of these five programs began dosing patients in its pivotal study in the first quarter of 2026 triggering the muscle attainment I referenced earlier. These programs include ZugoCell from CRISPR Therapeutics for B-cell malignancies, WooCAR-T007 from Woojin for hematologic malignancies, AsiaCell from Imogene for hematologic malignancies, and two programs from undisclosed SPL partners. I believe up to four of these programs will be pivotal by the end of the year. Outside the wave two programs I just covered, There are another seven active clinical programs in earlier stages of development that continue to pursue FTA approval beyond 2028 and can represent meaningful core revenue and SPL program-related revenue for MaxSight over time. Across these programs, the total milestone opportunity exceeds $110 million. To date, we have received over $30 million in total milestone payments from our SPL customers, highlighting the strength of our portfolio-based, program-driven business model. We have 31 SPL agreements, including four new SPLs, in 2025. 11 Estelle customers we work with have current clinical or commercial programs, while another eight are active on pre-clinical development, most of which we believe will become clinical Estelle customers. However, 12 of the Estelle agreements are with biotechs that are no longer active, having exited ex vivo or ceased operations. The 12 that are no longer active is part of our business model, as we don't expect every Estelle we sign to result in a commercial program. There is meaningful revenue opportunity from newer SPL customers advancing toward and entering the clinic. As I mentioned earlier, despite significant consolidation in 2025, SPL customers continue to advance assets on our platform, including up to six programs in late-stage pre-clinical development expected to enter the clinic within the next six to 18 months. This reflects continued expansion of our SPL portfolio beyond our current later-stage programs. Today, we support one commercial therapy, cash jetting, and we remain very encouraged by the opportunity for the drug to continue to scale, with both Vertex and CRISPR recently reiterating Cashervy's multi-billion dollar potential. During Vertex's most recent earnings call, they reported $116 million in Cashervy revenue for 2025, including $54 million in the fourth quarter. Vertex noted that 147 patients with sickle cell disease or transfusion-dependent beta-thalassemia globally had their first cell collections in 2025, and 64 patients received cash chevy infusions, with very those occurring in the fourth quarter. The momentum in patient collections is notable, and Vertex has indicated that they expect a meaningful cash chevy ramp into 2026 versus 2025. Despite the possibility of short-term quarter-to-quarter variability as the drug scales, we are optimistic about where this therapy is headed and truly believe in its transformative potential for patients around the world. To wrap up on the ESCO portfolio, While any individual program carries risk, the multiple shots on goal we have across the same indications and across many different indications gives us a high probability of generating meaningful core revenue, regulatory milestones, and commercial revenues over time. We are now seeing the growth in commercial royalties starting to materialize in our revenue line. This reflects the strength of our innovative business model, and we expect this trend to continue in the coming years as additional therapies are commercialized by our SDL customers. That conviction is what drives the decisions we make about how to operate this business. Moving to SecureDX, I believe 2026 is the year where the secure opportunity starts to become more visible. We spent 2025 integrating the business, building the commercial pipeline, and working with early customers. The regulatory environment continues to evolve in our favor. Off-target risk assessment is becoming increasingly important to the FDA and other global regulatory agencies when reviewing gene-edited therapy. Our three assays, screening, nomination, and confirmation, serve both ex vivo and in vivo developers, which means Secure's addressable market extends well beyond our legacy of exploration customer base. We acquired a relatively new startup with an emerging and leading technology. Despite 2025 coming in lower than expectations, we expect year-over-year growth for Secure assay services and licenses in 2026.