Good day. Thank you for standing by. Welcome to the MaxCyte first quarter earnings conference call. At this time, all participants are on a listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised today's conference is being recorded. I would now like to turn the conference to your speaker today. Sean Menarguez, please go ahead. Good afternoon, everyone. My name is Sean Menarguez, and I'm the Head of Investor Relations here at MaxCyte. Thank you all for participating in today's conference call. On the call from MaxCyte, we have Doug Doerfler, President and Chief Executive Officer, and Douglas Swirsky, Chief Financial Officer. Earlier today, MaxCyte released financial results for the first quarter ending March 31, 2023. 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. The company undertakes no obligation to publicly update any forward-looking statements, whether because of new information, future events, or otherwise. With that, I'll turn the call over to Doug. Thank you, Sean. Good afternoon, everyone, and thank you for joining MaxCyte's first quarter 2023 earnings call. I will begin with a discussion of our business and operational highlights during the quarter, followed by a detailed financial review from Douglas Swirsky, known as DJ at MaxCyte, our recently appointed CFO. We will then open the call for questions. I would like to start off by extending a warm welcome to DJ, who joined MaxCyte's leadership team as our Chief Financial Officer in March. He is a seasoned financial leader with over two decades of experience in the healthcare sector. He brings financial, strategic, and operational expertise across multiple life science companies, including Nasdaq-listed public organizations. We look forward to the pivotal role he will play in MaxCyte's continued growth as an industry-leading cell engineering company. I also thank Ron Holtz, who served as our interim CFO for the past year, as well as MaxCyte CFO from 2005 to September 2020, for his dedication and contributions to MaxCyte. Ron is supporting DJ's transition to CFO as he moves into a new role as EVP of administration for the company. MaxCyte began 2023 with the first quarter financial results were in line with our expectations. Given some of the challenges in the cell therapy industry that I will discuss, we have determined that it is appropriate to lower our revenue expectations for the remainder of the year. DJ will talk more about this in his results. Despite those challenges, I remain extremely excited about the prospects for MaxCyte's platform as the premier cell engineering technology for the industry, enabling the development of a growing set of advanced cell-based therapeutics. I am confident on our team's ability to deliver against our long-term strategic plan. You'll note that our first quarter revenues, including our core business revenues, are down from the same quarter last year. As discussed on last quarter's call, we are expecting a return to more typical seasonality in our financial performance in 2023 than we had in 2022. It's important to note that in the first half of 2022, laboratories came back to near full capacity following COVID-19 related disruptions, which resulted in elevated spending on instruments and PAs in that six-month period and has created a more difficult year-over-year comparison for the first half of 2023. With regard to PA purchasing among customers with advanced clinical programs, we believe some purchases were accelerated into 2022 in anticipation of potential product approvals, which is resulting in lower levels of PA purchases in 2023. Outside of our core business, we generated $800,000 in milestone revenue during the first quarter. Our partners continue to make progress in their development programs, with several progressing into and through clinical development over the course of the year. As discussed on last quarter's call, 2023 shows signs of being a challenging year for the industry. In the face of a challenging capital markets environment, companies are prioritizing pipeline assets for research and development, which is having some impact on timing of projects in 2023, especially for smaller cell therapy biotech companies with late-stage preclinical and early-stage clinical programs. We also have seen numerous restructurings and ex-expense cutting measures being undertaking at cell therapy companies in recent months, including several such announcements coming within our customer base. Within this environment, we are also seeing increased hesitancy and therefore extended timelines for capital investments from our customers. We felt the impact of that macro environment impacting the timing of instruments and PA purchases as 2023 has progressed, increasing the caution we discussed in March and as DJ will describe in more detail. Despite those evolving headwinds, in the near term, our opportunity pipeline remains healthy and our confidence in the value our offerings remain strong for the longer term. Cell therapy companies continue to move toward non-viral approaches and/or focus and invest in more complex engineered cell therapies, including multiple molecules-In editing formats across a variety of disease types that play to the strengths of our platform. Our customers are narrowing and focusing their investments, but we do not see weakness in our core clinical SPL partners as they continue to focus development on their lead assets. As a reminder, most of MaxCyte's partner programs are tied to the partner's lead and/or second clinical program asset, where investment is continuing and progress through the clinic remains well-funded. Importantly, even in this challenging near-term environment, our non-SPL customers continue to progress toward SPL partnerships. We have signed 2 partnerships so far in 2023, and we anticipate continued momentum toward announcing more this year. In January, we announced a partnership with Catamaran Bio to support its CAR NK cell therapy programs to treat a variety of solid tumor types. Just last week, we were excited to announce a partnership with Walking Fish Therapeutics to support its innovative B-cell platform. The partnership with Walking Fish further expands our SPL program portfolio into B cells and rare diseases. Additionally, this partnership expands the application of the MaxCyte platform as Walking Fish is developing an innovative B-cell platform to serve as in vivo protein factories that produce the deficient enzyme in Fabry disease. The additions of Catamaran Bio and Walking Fish Therapeutics bring the total number of our partnerships to 20. With continued high level of engagement with potential partners, we remain confident in MaxCyte's position as a partner of choice to cell and gene innovators. We look forward to a potentially first commercially approved product enabled by our platform, Vertex and CRISPR's exa-cel program, which recently announced completion of the rolling Biologics License Application, BLA, to the US Food and Drug Administration for sickle cell disease and transfusion-dependent beta thalassemia with request for priority review. This application approval would be the first non-viral engineered cell therapy product granted by the FDA and would further validate the utility of MaxCyte's platform technology as the premier enabler of non-viral cell therapies. So far in 2023, we continue to position ourselves strongly with targeted investments to support our future growth as well as our customers' and partners' success. We are focusing on growing our commercial teams, implementing automation in our recently expanded manufacturing capabilities, enhancing our process development capabilities, and ongoing product and technology development. In addition, we continue to make investments in our applications lab, which will enhance our ability to support next-generation cell therapy innovators. We believe these are the right investments to ensure long-term success for MaxCyte and the cell therapy sector. Late last year, we took key steps to formalize our approach to environmental, social, and governance disclosures. Earlier this week, we issued our inaugural ESG report, which can be found on our investor relations website. In this report, we highlight our ongoing efforts in all areas of ESG, including our Value for Patients initiative launched in 2021, which establishes our efforts to better understand the differential challenges that discrete patient populations face. In the time since launching this initiative, we are developing an understanding of the potential social, racial, economic, and bioethical challenges relating to developing gene and cell therapies. We are taking these findings and partnered with key opinion leaders to proactively participate in efforts that support the novel treatments we enable as they move toward reaching the patients who need them the most. We are pleased to share this first ESG report with our shareholders and to share our commitment to understanding, managing, and monitoring our business' support for sustainability, our responsibilities as a corporate citizen, and our role in creating value for patient communities more broadly. In summary, we expect a more challenging operating environment in 2023, which will impact the timing of our customers' development programs and capital investments. However, we see these developments as short-term in the therapeutic space with great promise over the long term. Importantly, we continue to have confidence in the value our enablement provides to our industry and in the strength of our SPL partnerships and pipeline opportunities, which remains as robust as ever. We have made critical strategic investments positioning MaxCyte to execute on long-term goals. We are honored to support our partners and believe we remain the partner of choice for non-viral cell engineering technology to support critical programs through development to commercialization. The cell and gene therapy industry is in the early innings of a significant global opportunity to deliver therapies to patients, and we remain very optimistic about the medium to long-term growth for MaxCyte. With that, I will now turn the call over to DJ to discuss our financial results. DJ? Thanks, Doug. Hello, everyone. I'm very excited to have joined the MaxCyte team. I appreciate the opportunity to support our mission, driving the next generation of cell-based therapies. During my short time with the company, I've continued to be impressed by the quality of our team at all levels in the organization. It is an honor to work with all of them as we support our partners as they develop innovative therapies for patients who need them most. I will now discuss MaxCyte's financial results for the first quarter. Total revenue in the first quarter of 2023 was $8.6 million compared to $11.6 million in the first quarter of 2022, representing a 26% decline. In the first quarter, we reported core revenue of $7.8 million compared to $9.6 million in the comparable prior year quarter, representing a 19% decline. This includes revenue from cell therapeutic companies of $6 million, which declined 19% year-over-year, and revenue from drug discovery customers of $1.8 million, which declined 17% year-over-year. The year-over-year decrease in revenues were driven by an unusually strong first half of 2022, which did not see our typical seasonality and was strongly impacted by the purchasing patterns of late-stage pre-approval programs and laboratories coming back to near full capacity following COVID-19 related disruptions. As discussed on last quarter's call, we expect about 40% of 2023 core revenue to occur in the first half of this year, consistent with our historical experience outside of last year's less typical seasonality. We recognized $0.8 million of SPL program-related revenue in the first quarter of 2023 compared to $2 million in the first quarter of 2022. We will not be able to discuss further details on our SPL program-related revenue or our partner's progress due to confidentiality agreements. Moving down the P&L, gross margin was 88% in the first quarter of 2023 compared to 91% in the first quarter of the prior year. Margins were influenced by highly variable milestone revenues as well as a mix of products and customer types, and we saw those effects in the first quarter. Total operating expenses for the first quarter of 2023 were $20.8 million compared to $14.7 million in the first quarter of 2022. The overall increase in operating expenses was primarily driven by increases in R&D, sales and marketing, headcount, and strategic consulting expenses as the company continues to invest in the expansion of commercial sales and marketing, as well as in business and corporate development and innovation and product offerings for long-term growth. We finished the first quarter with combined total cash and cash equivalents and short-term investments of $224.7 million as of March 31st, 2023, and of course, no debt. Moving to our updated full year 2023 guidance, we now expect total revenue for 2023 to grow between 8%-12% compared to 2022, including core revenue growth of between 5%-10% and SPL program-related revenue expectations remaining unchanged at approximately $6 million for the year. Our updated guidance incorporates the challenging macro environment and the timing of purchasing patterns from our customers and partners, which Doug discussed. As we have discussed previously, the timing of partnership revenue is predicated on our customers' clinical and regulatory progress and therefore is fundamentally more difficult to predict than core revenues. Our program-related revenue expectation is a risk-adjusted forecast achievable under various potential outcomes across our 20 announced partnerships and their planned clinical progress. As I mentioned, we continue to expect a back-half weighted seasonality split of roughly 40%-60% first half and second half core revenues in 2023, which would be consistent with our historical experience before 2022. Finally, I want to note our strong financial position as we expect to end this year with approximately $200 million in cash equivalents, and short-term investments and no debt. Our cash position allows us to focus on realizing the long-term potential of our business model. Let me close by saying that overall, we are confident in our updated 2023 revenue outlook, and we believe that our modest cash burn and debt-free balance sheet will support our future plans for profitable growth. Now I'll turn the call back over to Doug. Thank you, DJ. In summary, we're optimistic about the long-term outlook of MaxCyte and the depth of our partnership pipeline. We're committed to strengthening our opportunity to lead the industry as the premier cell engineering platform technology, supporting the development of advanced cell-based therapeutics for patients who may not otherwise have treatment options. As always, we thank our MaxCyte team as well as our board, suppliers, investors, partners in the amazing industry that we have the honor of serving to enable the development and commercialization of therapies for patients and their families. With that, I will turn the call back over to the operator for the Q&A. Operator? Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered and you wish to remove yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Julie Simmonds with Panmure Gordon. Your line is open. Thank you. Good evening. Just a couple of quick questions on the split between cell therapy and drug discovery and whether there is any difference in the guidance as far as sort of the effect of this slowdown on the two separate divisions. Clearly, one's more capital and one's more recurring into revenue. We take a look at our revenue expectations across the entire business and developed our projection based on that. I think some of these sectors are hit more than others. Obviously, we're very comfortable with what's happening with our SPL partners. People are focused very heavily on, you know, their late-stage programs. As capital is constrained a little bit within the industry, people are focusing on, you know, their product 1 or product 2 in the pipeline. I think in terms of how we thought about This reduction in guidance is as a result of looking at the business across, you know, all of our opportunities, and I hesitate to break it down further. Thank you. Then just on sort of the cost side of things, the fact you're taking down the top line, does that change the investment plans at all in terms of the scale-up of sales and marketing or R&D? Or are you expecting that to continue at a similar run rate as now? We said last time that we thought we'd have $200 million at the end of the year. We still are saying that, even though that the revenue expectations are being moderated. We're being mindful of costs. However, we're continuing to invest in our business, and we're not going to let, you know, what we consider, you know, temporary, you know, market conditions, you know, take away from our long-term strategy. Excellent. Thank you very much. One moment for our next question. Our next question comes from Dan Arias with Stifel. Your line is open. Good afternoon, guys. Thanks for the questions. Doug or DJ, on the outlook here, can you just maybe clarify for us how much of what you're doing is due to lower instrument purchase expectations versus lower utilizations of the installed systems? Then, you know, how much of what you're doing is also due to sort of an explicit forecast from your customers or what you're hearing from your customers versus more of just an assumption that things will be tough and a naturally more prudent outlook on the space, just given the industry headwinds that we're talking about. I think it's a combination of factors. You know, we're very close to our customers and potential customers with our sales team and our field applications team. A lot of this is direct feedback that's factoring into our thinking. In terms of, you know, where we see this, again, you know, we're not gonna break this out in terms of, you know, where we see the softness in the markets. We feel very good about, you know, the book of business in front of us, and we're, you know, we're optimistic about executing against the goals we set for ourselves. Again, we're not gonna break it out in fine detail, in terms of instrument sales versus PAs and things like that. In terms of, you know, you know, where we have installed base, are we seeing, you know, softness? You know, I think people are very excited to be working with MaxCyte and, you know, but people are scaling back on where they're making capital investments right now, and there's been just a general slowdown in, you know, capital being deployed in this space, and that's why we're just moderating our expectations for the year. Okay. I'm not trying to beat a dead horse. I think most people can understand the placement dynamic and why instruments going out the door might be doing so at a lower clip. By our math, the utilization came way in this quarter. You have a business that is hard for people to sort of dig into and understand just given the nature of it. Is there anything that you can offer us when it comes to the usage of the systems by those that have them that give you comfort that this is a temporary thing and that, you know, maybe there is something going on in one corner that's not going on in the other corner? You know, again, there's not a lot to work with in general when you're modeling this company, and right now it does seem to be particularly in flux. Thanks. Hey, Dan, it's Doug. I think one area I do wanna focus in on is our SPL partners. You know, they continue to progress their programs through the clinic and toward commercialization. We're not seeing, you know, any weakness in that part of the business, frankly. That continues to be very, very strong for us, both in placements and in utilization. Also wanna point out that, first of all, Q1 was sort of inconsistent with management's expectations. We do recognize that, you know, year-over-year, this quarter it isn't as strong as last year's Q1. I think there was a lot of things that went into that. You know, people coming back again after COVID-related disruptions. You know, people, you know, laboratories are sort of getting back out and ordering and things like that. This is a little bit of a drop from first quarter of last year, but it met our expectations. We don't really believe that there's any real read-through for the rest of the year beyond what we're guiding here now. Okay, thank you. One moment for our next question. Our next question comes from Jacob Johnson with Stephens. Your line is... Hey, good afternoon. This is Hannah on for Jacob. Thanks for taking the questions. In your investor presentation, you highlighted the potential for 50 total SPL pre-commercial milestone events over the next 3 years. How many of these are 2023 events and, or are these more weighted towards 2025? I think that's a three year total, Hannah. I think when we talked at the last quarterly meeting, we guided towards $6 million in milestone revenues, and we're still sticking by that. We've built that plan from really the bottom up. We've looked at a number of different scenarios, and we feel really comfortable with that $6 million number. Thanks. I'll leave it there. One moment for our next question. Our next question comes from Steven Mah with TD Cowen. You're on. Oh, great. Thanks for taking the questions. maybe just to dig in a little bit more on the guide revision, I'm not sure if you guys disclosed this or not, but could you give us a sense for the customer breakdown that you have? you know, how, you know, just rough and tough, you know, how many are small or emerging biotech versus medium-sized versus large pharma? if you can't, if you can't give that breakdown, you know, on the guide revision, you mentioned it was impacted by customer feedback. Was that customer feedback across the board, across your? Whole customer base or was it weighted to one particular demographic? No. As I did mention, it's, you know, we're very strong in the SPL partners, Steven. Thanks for the question. What we're hearing We, you know, we have a pretty Well, for a small company, we have a pretty good number of people in the field application scientists and salespeople who are in the field every day. We're getting that feedback from them collectively. We're monitoring this, you know, basically on a daily basis. We're looking at, you know, macro numbers, and frankly, I think we may be seeing some stuff that haven't yet showed up in some of the macro numbers. I still think that there's kind of across the board, some belt-tightening. I think that you're seeing a situation where, you know, larger dollar amounts, capital items are getting a little bit more scrutinized. In some cases, we're seeing companies establish higher levels of authority to approve certain capital purchases. I think that the, you know, the dwell time, the cycle time is being a little bit elongated as well and just basically across the board. Okay, that's helpful. I can sneak one last question in. You know, yeah, appreciate you guys are guiding to, you know, $200 million of cash at year-end. You know, given that cash, you know, the capital markets outlook and, generally reduced valuations, you know, how should we think about your M&A appetite? Could you give us a sense of what an ideal target would be for you guys? Would it be like a technology bolt-on or, you know, any color would be helpful. Thanks. Yeah, it's very active. There's we have a lot of sensing going on right now in the marketplace. We've identified a handful of opportunities for the company. As I mentioned before, these aren't gonna be, you know, I'll call them commodity bolt-ons. They're gonna be more, we've identified a handful of problems. I've talked about process analytical technology. I've talked about some other adjacent technologies to our, you know, our platform, which we think would be very attractive for adding into the portfolio. Again, it's gonna be driven by, you know, issues facing the industry. I think that we continue to believe that those issues are product characterization and the ability to adequately identify product potency. Those are two main areas that we're taking a hard look at. Anything we can do to accelerate the manufacturing time and provide more consistent manufacture for these cell therapy drugs. Great. Thank you. One moment for our next question. Our next question comes from Matt Larew with William Blair. Your line is open. Hi, this is actually Madeline Mullen on for Matt. Just thinking about some of the pressures you've talked about with longer capital equipment purchase cycles, more approvals needed, things like that. Are you seeing the discussion of some of your clients moving into SPLs, SPL partnerships or SPL agreements taking longer by any because of that? Or do you think that's impacting people moving sort of through your process at all or taking a longer time there? Yeah. We're seeing a lot of really good. Thanks for the question, Madeline. We're seeing really good progress in the SPL partners, and we have something that's really important for these companies to move forward. We've just signed two deals this year already, and we expect to, you know, keep the pace we've historically had, which is somewhere between 3 and 5 deals. We're not seeing any, you know, major slowdown of those deals. Typically these companies are driving toward value-generating events, and moving something to the clinic is clearly a value-generating event in this environment. Great. Thank you. Sort of tagging off of that, thinking about your Rockville facility, can you talk about where you see utilization trending this year? I know in the past you said it has the ability to support multiple commercial products when fully scaled. What would you consider like a utilization level that would be considered fully scaled? Good question. What we have talked about is that we, you know, we built out our manufacturing here, and I don't think we really have a capacity in terms of instrument manufacturing, and we've also dramatically increased our manufacturing for disposables. We've also are continuing to make major investments on automation. Automation will translate into more flexibility and more capacity. We're monitoring our partners' progress. We're monitoring their potential commercial, their commercial success, and we're staying well ahead of that. Frankly, we can make those automation investments well ahead of the demands of the partners. We feel very comfortable we have the capacity to support all of our SPL partners as they move into commercialization. Great. Thank you. One moment for our next question. Our next question comes from Mark Massaro with BTIG. Your line is open. Hey, guys, this is Viviane on for Mark. Thanks for taking the question. Maybe one for DJ. I guess I was curious on the decision to keep the SPL revenue guidance at $6 million. I would've thought that that revenue would tend to be a little more lumpy as opposed to the core business. I guess, could you just walk us through what's giving you confidence there? And in the past, I think, you guys have talked about, you know, some degree of inclusion of approval milestone revenue. Just curious if you're able to break out what that contribution might be? Thanks. Sure. Thanks for the question. You know, our expectations regarding milestone revenues remain unchanged at $6 million for the year. The way we think about that is we've got, you know, 20 SPLs. We're modeling out multiple scenarios that, you know, that helps us generate a number that we can get comfortable with. I can assure you it's probably not a normal distribution curve. We're just looking at it many different ways, how we, you know, what the year could look like. When we do that, you know, the number that was, that came out of that process, you know, at, on our last call was $6 million, and it's still $6 million now. Certainly we do think about some of the later stage milestones being a component of that. You know, with or without that, there are many different ways and many different combinations of potential payments, that get us to $6 million. It is lumpy and, you know, we, you know, something tells me the number, you know, will hopefully center around $6 million so that we look smart, but I think it's probably not gonna be that number exactly. Okay. Perfect. Understood. Just a quick one. How should we think about gross margin cadence from here, just given the step down in the guide? I think I also heard you talk about, you know, more targeted investments, just any comments you have there? Yeah. Just as a reminder in terms of our, how the gross margin is determined, we've got different things that, different types of revenue, one of which is milestone revenue. The lumpiness in that also sort of contributes to the lumpiness or the fluctuations of the milestone revenue as well as the mix of instruments, et cetera. We feel very good about our margins. We're getting, we've got margins in the high 80s, and we think it's gonna continue to be at that level. All right. Awesome. Thanks for taking the question. Thank you. Ladies and gentlemen, this conclude the Q&A portion of today's conference. I'd like to turn the call back over to Doug for any closing remarks. Well, thanks operator. Thanks everyone for joining today's call. You know, this is our first quarter 2023 earnings call, and I'd like to thank DJ for joining the team and you know, supporting the great work we're doing and look forward to providing an update on the second quarter later this year. Thank you all very much. Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful- Goodbye