MaxCyte, Inc.

Good day. Thank you for standing by. Welcome to the MaxCyte Second Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message device when your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Eric Abdel of Investor Relations. Please go ahead.

Good afternoon, everyone. Thank you for participating in today's conference call. Joining me on the call from MacCyte, we have Maher Masoud, President and Chief Executive Officer, Parmeet Ahuja, Chief Financial Officer, and Sean Menorquez, Senior Director of Business Development. Earlier today, MacCyte released financial results for the second quarter ended June 30, 2026. A copy of the press release is available on the company's website. Before we begin, I need to read the following statement. Statement or comments made during this call may be forward-looking statements within the meaning of federal securities laws. Any statements contained in this call, other than statements of historical fact, including those 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. Acceptance 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 Maher.

Thank you, Eric. Good afternoon, everyone. And thank you for joining MagSight's second quarter 2026 earnings call. Maxi reported $7.3 million of total revenue in the second quarter, including $6.5 million of core revenue and $0.8 million of SPL program-related revenue, which consists of milestones and royalties. Results were ahead of our expectations and consistent with the framework we laid out coming into the year. As expected, we entered 2026 facing several headwinds, including inventory drawdown by our largest customer and headwinds resulting from the discontinuation of a few partner clinical programs last year. Despite those challenges, our objective was clear. Stabilized revenue in the first half and return to growth in the second half. Our first half results reflect the stabilization, where both our Q1 and Q2 revenues were ahead of our expectations, and we remain confident in our ability to achieve our goal of returning to growth in the back half of the year. We achieved sequential revenue growth in Q2 compared to Q1, primarily driven by instrument placements across our portfolio, including our recently launched DTX platform. We also continue to see GTX placement across biotech and academic customers, reflecting ongoing program advancement. Processing assembly revenue remains stable, sequentially, supported by our SPL portfolio. The second quarter reflected disciplined execution against our operating plan, resulting in improved first half financial results. We delivered a meaningful reduction in net loss year over year, despite the revenue headwinds we faced heading into 2026, and we expect to build on that progress as we execute against our plan and return to revenue growth. Furthermore, we have continued to invest in R&D priorities that expand our platform and strengthen our long-term growth opportunities. Investments in expert DTX, secure, and newer strategic collaborations are designed to broaden how we engage with customers from early discovery through clinical development and commercial manufacturing while further diversifying MagSight's revenue streams over time. Additionally, I want to highlight a significant milestone for the company as we recently announced our multi-platform technology license partnership with Genentech. which we believe reflects the growing recognition of MagSight's technology across the ecosystem from early research all the way through commercial manufacturing. Under the agreement, MagSight provides Genentech with access to our expert GTX platform and additional platform technologies, including our electroporation and analytical assessment capabilities across research, clinical development, and manufacturing workflows. The partnership is structured to support multiple programs and to enable Genentech's ex vivo cell engineering activities from early discovery through CGMP manufacturing. I want to be clear about why I believe this agreement is so important for MaxCyte. It is an evolution in how we partner with the largest players in our industry. Rather than licensing our technology on a single program basis, we have established an enterprise-level relationship with Genentech that supports multiple cell therapy programs under a single framework. We believe this structure reflects how large pharmaceutical organizations increasingly want to deploy enabling technologies as enterprise-wide platforms that support multiple programs. We expect this trend will allow MagScyte to participate more broadly across the development lifecycle of a customer's portfolio, not just one product at a time. The result is multiple platforms being used across a portfolio of programs rather than just for one program. We structure the partnership with Genentech with the goal of creating long-term value for MagScyte. while shifting a greater proportion of that value earlier in the customer lifecycle. We expect that will mean greater revenue capture during research and clinical development across many of our platforms, durable recurring license and platform access revenue, complemented by milestone-based opportunities, and continued demand for our instruments, processing assemblies, and analytical technologies. The agreement also provides participation in commercial manufacturing through annual licensing and platform realizations. While the structure differs from a traditional SPL, we believe the risk-adjusted economics are more favorable on a partnership level given the enterprise portfolio-based relationship across the entire development lifecycle. This enterprise-based model monetizes multiple revenue streams across the customer relationship while reducing our dependence on the outcome of any single clinical program. Disagreement structure complements our SPL model. It does not replace it. We believe SPL has remained the right commercial solution for many of our biotech customers who are developing individual therapeutic programs and we expect to continue signing SPLs going forward. Over the past several years, we have consistently maintained strong royalty-based economics across our SPL partnerships, and our current pipeline gives us confidence in our ability to continue doing so, reflecting the value of our offering to cell and gene therapy developers. Our existing SPL agreements continue under the contractual terms, including acquired entity provisions where applicable. Our pipeline continues to support attractive royalty-based SPL opportunities and we expect both commercial models to coexist, each serving different customer needs. Beyond our relationship with Genentech, we believe this partnership establishes a commercial framework that can be applied with other large pharmaceutical organizations over time. It helps validate the breadth and strength of MaxCyte's technology portfolio, expand our addressable market within large pharma, and demonstrate our ability to engage a leading global biopharmaceutical company at an enterprise level. Overall, I am very excited about what this partnership represents for MaxCyte and about the opportunities it creates for the future. On the instrument side, expert DTX adoption continues to build with encouraging early traction across discovery and early optimization workflows in both ex vivo and in vivo cell and gene therapy. As I've discussed on prior calls, the DTX is fully compatible with the rest of our expert platform, which gives customers who adopt the instrument in discovery a seamless path to scale on our STX and GTX instruments for CGMP manufacturing and ultimately into a partnership agreement. We expect DTX adoption to build through the balance of 2026 and into next year. We also continue to see steady progress with secure in the quarter. The regulatory environment continues to evolve in our favor, and we continue to expect year-over-year growth for secure assay services and licenses in 2026. We firmly believe that secure assays will become part of the industry standard for off-target risk assessment and gene editing. Turning to SPL program-related revenue, we recognized $0.8 million in the second quarter, which was comprised of nearly all royalties. Vertex reported approximately $76 million of cash chevy revenue for the second quarter of 2026, reflecting approximately 75% sequential growth versus Q1 2026 and 150% year-over-year growth. On its earnings call, Vertex noted that more cash chevy infusions were completed in the first half of 2026 than in all of 2025. Additionally, Vertex also indicated that more than 100 patients initiated their treatment journey for cash chevy during the second quarter, which marked the third consecutive quarter with more than 100 patient initiations They also noted that regulatory submissions for Cashevy are now complete in Saudi Arabia and the UK in the 5-11 age group, and they are seeing continuing strong uptake in the UK, Italy, and Middle East. Overall, we remain very encouraged by Cashevy's continued commercial trajectory, and we truly believe in its long-term transformative potential for patients. Turning to our customers, we have 30 total licensed partnerships, which includes 29 SPL partners, and our recently announced multi-platform enterprise partnership with Genentech. We continue to see encouraging progression across our partner pipeline with multiple clinical stage programs moving towards late stage development. Importantly, we have five partner programs with the potential to begin commercial launches in the next couple of years, including as early as next year. While any individual program carries clinical or commercial risk, we believe the breadth and diversification of our multiple shots on goal give us a high probability of generating meaningful core revenue, regulatory milestones, and commercial royalties over time. Our SPL portfolio remains a key driver of long-term value, as is evident by the growing commercial royalty revenue and the advancement of a significant number of SPL programs through the clinic. Looking to the second half of the year, we remain confident in our return to revenue growth. We expect growth to be driven primarily by instrument placements, supported by stable license revenue, and processing assembly demand from our SPL partners, including our recently announced partnerships. the continued rollout of expert DTX, and a healthy commercial funnel across both new and existing customers. On the processing assembly side, a significant portion of the inventory drawdown from the largest customer is now behind us. We expect stable processing assembly demand as the SPL-related program headwinds we experienced in the first half also have largely subsided. Taken together, these factors give us strong confidence in our outlook for 2026. To close, I am pleased with the execution of our team in the second quarter. The Genentech Partnership Agreement represents a meaningful step forward in how we engage with our customers and reinforces the growing role our platform plays across the cell and gene therapy ecosystem. We are proud of our accomplishments and our positioning for long-term growth and plan to continue to invest in the business with financial and commercial discipline as we execute in the second half of 2026 and beyond. I will now turn the call over to Parmeet. Parmeet?