Good day and thank you for standing by and welcome to MaxCyte’s Fourth Quarter Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Sean Menarguez of Investor Relations. You may begin.

Thank you, Justin. Good afternoon, everyone. My name is Sean Menarguez and I am 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 Ron Holtz, Interim Chief Financial Officer. Earlier today, MaxCyte released financial results for the fourth quarter and full year ended December 31, 2022. 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 maybe 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. Now with that, I will turn the call over to Doug.

Thank you, Sean and good afternoon and good evening, everyone and thank you for joining MaxCyte’s fourth quarter and full year 2022 earnings call. I will begin with a discussion of our business and operational highlights during the quarter followed by a detailed financial review from Ron. We will then open the call for questions. 2022 was an exciting year for MaxCyte and our team performed excellently in our first full year as a NASDAQ-listed company. Ron will provide more details during the call regarding our financial results, including strong full year revenue, total revenue of $44.3 million representing a year-over-year growth of 31% in 2022. Core business revenue grew 26% in 2022 year-over-year, driven by 33% growth in revenue from cell therapy customers and 8% growth in revenue from drug discovery customers. For the fourth quarter, core revenues increased 4% compared to the fourth quarter of 2021, with revenue from cell therapy and drug discovery customers growing at 4% to 5% year-over-year. Fourth quarter growth was primarily driven by continued strength in instrument sales and was offset by PA sales below expectations as compared to the prior year. As our partners progress through the clinic and approach commercialization, we are experiencing some lumpiness in PA purchasing patterns. We saw strong growth in PA sales in 2022 over 2021, supporting our confidence in the trajectory of the business overall. We generated $1.9 million of milestone revenue during the fourth quarter and $4.6 million of milestone revenue for the full year in 2022, exceeding our full year milestone revenue guidance of approximately $4 million. Our partners programs continue to make exciting progress with several entering and/or progressing through the clinic and we continue to see a path toward a first commercially approved partnered product with the exa-cel program, which is currently…

Thank you, Doug. I want to start by addressing a question that I expect may be top of mind due to recent events. MaxCyte did have a small foreign currency transactions account at Silicon Valley Bank. That account held an immaterial amount of capital and the events of the past few days represent no material risk to the company or its assets. Turning to our financial results. Full year total revenue was $44.3 million, representing growth of 31% over 2021. Total revenue in the fourth quarter of 2022 was $12.4 million compared to $10.2 million in the fourth quarter of 2021 or 22% growth. In the fourth quarter, we reported core revenue of $10.6 million compared to $10.1 million in the fourth quarter of 2021 or 4% growth, this includes revenue from cell therapy customers of $7.5 million, growing 4% year-over-year and revenue from drug discovery of $3 million, up 5% year-over-year. Core revenue growth for the fourth quarter was driven by continued strength in instrument sales, although somewhat offset by timing of PA sales as compared to the prior year quarter. As Doug explained, we saw some lumpiness in PCLs late in the year. However, overall, in 2022, PA sales was a key revenue growth driver that supports our confidence in the trajectory of the business overall. For the full year 2022, we reported core revenue of $39.6 million compared to $31.4 million in 2021 or 26% growth. This includes revenue from cell therapy customers growing 33% year-over-year and drug discovery revenue growing 8%. We recognized $1.9 million of SPL program-related revenue on strong partner clinical progress in the fourth quarter of 2022 as compared to immaterial milestone revenue in the fourth quarter of 2021. For the full year, we recognized $4.6 million in milestone revenues as compared to…

Thanks Rob. So in summary, we are encouraged by our full year achievements and remain optimistic about our growth opportunities in 2023 and beyond. We’re excited about the opportunity to lead the industry forward as the premier cell engineering platform technology supporting the development of advanced cell-based therapeutics for patients who may otherwise have treatment options. We are fully aware of the challenges in our industry and are working hard to support and enable the industry’s success. As always, we think our MaxCyte team as well as our Board, suppliers, investors, partners and 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 our Q&A. Operator?

[Operator Instructions] And our first question comes from Julie Simmonds from Panmure Gordon. Your line is now open.

Thank you. And congratulations on a good set of results, guys. In terms of – just one question, I suppose the sort of one particularly on my mind at this point is obviously looking for potentially your first commercial product potentially by the end of this year. Does that mean that this year has more sort of regulatory risk to it from your perspective, having moved into the new site and are you comfortable that you are up to speed with what is required there because I’m assuming that’s part of your process as part of the process as a whole?

Well, thanks for the question, Julie. And we are, I mean, this is something that we’ve been hopeful and now anticipating for the last several years. It’s one of the reasons why we’ve been making the investments in quality systems. Our new regulatory Vice President is on board. And we work very closely with all of our partners to ensure that we’re in line with their expectations and the agency’s expectations in terms of how we operate and control our manufacturing and supply chains to our customers. So we’re very confident that we’re going to be able to continue to support them through this final – at least one product’s final regulatory path and into commercialization. So we’re very comfortable with our investments and our position.

Thank you.

And thank you. [Operator Instructions] And our next question comes from Dan Arias from Stifel. Your line is now open.

Good afternoon, guys. Thanks for the questions. Doug, I appreciate the comment on the outlook. It seems like you feel pretty good about the business, but I am sensing some increased cautiousness just on the dynamics that you’re seeing in the market. Can you just talk a bit about the view out the window and the extent to which some of the things that you mentioned are related to your customers specifically or more just across the industry or the landscape? Thanks.

Dan, this is a general thought. I mean it’s – obviously, we had a bit of a hiccup – more than a hiccup last week. I think that’s going to – I think it’s going to encourage everyone to take a harder look at expenses next year. Focus on the assets that are bringing value to the company, our partners. As we’ve said many times, that we typically are working with their lead or second asset. So I think in large part, that’s going to not have a negative impact on us. But we also know that there is some rationalization going on. We’ve called that with some of the sickle cell programs in the last couple of weeks. I think you’re going to also – my view is we are going to probably start seeing that with some of the other allogeneic programs. As some of these lead assets that we are developing and others are developing, our partners are developing start to show some pretty remarkable clinical data. And my sense – our sense is that, that rationalization is going to happen. You’re going to end up having some culling of programs. So my sense, again, personally, I think that’s part of what we’re involved with, with this early stage – let’s not forget, we’re still involved with a number of very early stage therapeutic development assets, and there is going to have to be some rationalization. So it’s more of an overall view. We’re being cautious, but I also think that we have been able to build in with our investment recently, our ability to cover more of the global market and to be a more effective partner and a more effective supplier.

Okay, thanks very much.

And thank you. [Operator Instructions] And our next question comes from Matt Larew from William Blair. Your line is now open.

Hey, good afternoon and thanks for taking my questions. Sort of a two-parter on your partnership programs that numbers continue to progress, not to over 125 programs, the number in the clinic went from 15 to 16 and just by nature of the growth in the size of the programs, I guess I would have thought that might have moved up a bit more with – and has assumed that wouldn’t be an area where you see pipeline rationalization in terms of assets getting closer to the clinic. So was that just a function of timing? And then maybe the second part would be, within that $125 million programs signed into SPL at the end of the year. Are all of those actively progressing? And has that always been the case, or are there programs that are part of these partnerships that perhaps fit into this bucket of being paused or rationalized?

So, to answer your – the first part of your question, there has been some in and out of the programs with our partners. We don’t get involved in that decision. Most of them are based on strategy or data. But there has been some people – programs dropping out and programs coming in. So, the net effect has been an increase in the number of programs in the clinics. And I think we said 16 right now. And that – those 16 would be directly affecting our ability to develop milestone payments and eventually commercial revenues for the company. So, it’s good that it’s going in that direction. Of the 125, we typically a deal, let’s say, a deal, let’s just assume for a minute, 10 programs for deal. Many of those had are actually named programs within a few other views, they could be a named target and that targeted an indication. And some of the other programs would be unnamed what they would be within a general field of views. Some of them are being worked on pre-clinically in early-stage clinic. But a number of those I mentioned 125, we have got 15 in the clinic. So, 15 are in the clinic moving along and there is a more than a handful pre-clinically. And then there are some that are – they have options on. Does that answer your question, Matt?

Yes, I think so. I was taken curious notes to go back and read them again, but I think that helps. Thank you.

Thank you. And one moment for our next question. And our next question comes from Jacob Johnson from Stephens. Your line is now open.

Hey. Thanks. Good evening. Maybe, Doug, just circling back on the comments around process assemblies. It sounds like this was largely in cell therapy. Is this related to rationalization of programs or just lumpiness? And then maybe if you could just comment on kind of what’s assumed in the guide for FY ‘23 as it relates to the consumable side of things. Thanks.

Jacob, let me – thanks for the question. Let me turn it over to Ron.

Yes. So, the pull-through generally has been quite consistent across many years. The key thing that’s happening last year is as a late-stage partner moves towards preparations for commercialization and into commercialization. As you would expect, their purchasing gets larger and that’s part of the long-term growth of a customer moving from clinical stage into commercial stage. And so the big picture is strong growth. Closer in, if you are looking on a quarterly basis, that’s quite lumpy. And so, we saw strong PAs early in the year, and that’s part of why we ended up with 50-50 split and lighter PA sales, particularly in the fourth quarter. And most of that is associated with a large customer, which is sort of a poster child for what can happen when you have those later-stage companies approaching commercialization.

Okay. Got it. Thanks for that Ron.

Thank you.

Thank you. And one moment for our next question. And our next question comes from Mark Massaro from BTIG. Your line is now open.

Hi guys. This is Vidyun on for Mark. Thanks for taking the question. Just a quick clarifying one, on the 2023 guide, just to confirm, are you excluding any material economics from SPL partnerships with respect to regulatory approvals, such as the FDA or other agencies?

Yes. That’s a very good question. So, if you look at the $6 million guide for SPL program-related revenues. We come to that number by doing a broad and as scenario analysis, risk-adjusted numbers looking at all the potential milestones that may occur in 2023 based on what our partners were saying about their progress for all the programs that they have in the clinic. And we do that analysis and we come looking for a number that we can feel confident that the company can achieve. It does include some approval milestone revenues, but there has been multiple scenarios that would allow us to get to that number. If you look back at where we started in January of 2021, and when we guided to $4 million, I would have told you I was very confident that we would hit that number. And if you ask me how we would get there are really – that was not – it wasn’t something that was predictable because there were many ways to achieve it. And I think we are in the same position here. We have a $6 million guide. There are multiple ways for us to get there. We expect that some approval milestone revenue is a part of our achieving that $6 million number. And the challenge here is you have a small number of large dollar events and coming up with a straightforward way to communicate what our expectations of that is involved that scenario analysis.

Thanks for taking the questions.

[Operator Instructions] And one moment for our next question. And our next question comes from Max Masucci from Cowen. Your line is now open.

Hi. This is Stephanie on for Max. Thanks for taking my questions and congrats on a great year. It would be great to get some color around your VLx, early access contracts and the structure of those agreements. Did you realize material revenues from those early access contracts in Q4? And what are you assuming for VLx revenues in your guide?

Yes. So, we are early with VLx with the launch just in November. There was VLx revenue in 2022, and we expect to grow that this year. We are pleased with how the pipeline has developed in the short time that’s been in place. Developing the business model is something that we are very focused on and we are taking a similar approach that we took with the SPL revenue. So, when we did our first SPL, we sat down and came together with a clear understanding of what we believe the value was. We shared that with customers. And then we modified that approach as we learn more about what customer need – customers needed in a structure that would suit them that still delivered that value to us. We have an approach in the market now, and we are going through that process of massaging that, if you will, as we learn more from customers about what suits them for this particular offering.

Got it. That’s helpful. Thanks for taking my question.

Thanks Stephanie.

Thank you. And I am showing no further questions. I would now like to turn the call back over to Doug Doerfler for closing remarks.

Well, thank you, operator and thanks everyone for joining us today for our earnings call. We look forward to providing an update on the first quarter later this spring. Thank you very much. Look forward to subsequent discussions.

This concludes today’s conference call. Thank you for participating. You may now disconnect.