Maravai LifeSciences Reports First Quarter 2024 Financial Results

Continued Focus on Product Portfolio Expansion, Market Leadership and Scientific Innovation

SAN DIEGO, May 08, 2024 (GLOBE NEWSWIRE) -- Maravai LifeSciences Holdings, Inc. (Maravai) (NASDAQ: MRVI), a global provider of life science reagents and services to researchers and biotech innovators, today reported financial results for the first quarter ended March 31, 2024, together with other business updates.

Financial Highlights:

• Quarterly revenue of $64.2 million, Net loss of $(22.7) million, and Adjusted EBITDA of $7.8 million; and
• Reaffirmed financial guidance for the full year 2024 including a revenue range of $265.0 million to $285.0 million.

Partnerships and Innovation:

• TriLink BioTechnologies and Lonza entered into a Non-exclusive License and Supply Agreement for CleanCap® M6, CleanCap® AG 3’OMe, CleanCap® AG, and CleanCap® AU cap analogs for use in Lonza’s global mRNA development and manufacturing services;
• TriLink BioTechnologies recently launched 21 new catalog mRNA products, incorporating CleanCap® M6, N1-methyl-pseudouridine, and our CleanScript® mRNA production process, enabling researchers to easily access the newest and most differentiated chemistries for their mRNA development programs;
• Announced Alphazyme collaboration with Applied DNA for scale up manufacturing, enabling the scaling of Linea™ RNA Polymerase enabling the scaling of Linea rNAP manufacturing from its current research scale to the commercial scale necessary to empower Applied DNA’s growing demand for their Linea™ IVT platform; and
• Cygnus Technologies ELISA kits now support all FDA approved CAR-T cell and gene therapies.

Facilities Update:

• Celebrated the grand opening of the TriLink BioTechnologies Late Phase mRNA Drug Substance Production facility in San Diego, specifically designed for ​​mRNA manufacturing to support late-phase drug developers from Phase II to commercialization.
  

Awards and Recognitions:

• Maravai was recognized in Fast Company’s most innovative companies in biotech list for the Cygnus Technologies MockV® RVLP Kit; and
• TriLink BioTechnologies CleanCap® M6 was named runner up for the Medicine Maker Innovation Award for 2023.

“We had a solid start to the year, and I am proud of the drive and intensity from our strengthened commercial team, which delivered additional wins and expanded relationships among biotech, biopharma, CDMO, and academic customers,” said Trey Martin, Chief Executive Officer of Maravai. “We are executing on our return to growth strategy, bringing new innovations, and increased manufacturing capacity to our customers, moving us closer to our goal of long-term sustainable growth.”

"We are thrilled to add Lonza to our growing network of top-tier global providers to bring CleanCap and all our technologies to the global mRNA therapeutics market. We remain confident in our long-term opportunities, the fundamental strength of our end markets, and the value we provide our customers for life-changing development of drug therapies, diagnostics and novel vaccines," Martin concluded.

Revenue for the First Quarter 2024

First Quarter 2024 Financial Results

Revenue for the first quarter was $64.2 million, representing a 19% decrease over the same period in the prior year and was driven by the following:

• Nucleic Acid Production revenue was $46.0 million for the first quarter, representing a 25% decrease year-over-year. The revenue decline was primarily driven by lower demand for CleanCap analogs from COVID-19 vaccine manufacturers, and large GMP services projects that did not repeat in the current quarter.
• Biologics Safety Testing revenue was $18.2 million for the first quarter, representing a 3% increase year-over-year.

Net loss and Adjusted EBITDA (non-GAAP) were $(22.7) million and $7.8 million, respectively, for the first quarter of 2024, compared to net loss and Adjusted EBITDA (non-GAAP) of $(1.3) million and $23.8 million, respectively, for the first quarter of 2023.

Financial Guidance for 2024

Maravai’s financial guidance for the full year 2024 is based on expectations for its existing business and does not include the financial impact of potential new acquisitions, if any, or items that have not yet been identified or quantified. This guidance is subject to a number of risks, uncertainties and other factors, including those identified in “Forward-looking Statements” below.

Revenue expectations for 2024 remain in the range of $265.0 million to $285.0 million.

Adjusted EBITDA (non-GAAP) margins are expected to be in the range of 23% to 25%.

As it relates to forward-looking Adjusted EBITDA margin, Maravai cannot provide guidance for the most directly comparable GAAP measure or a reconciliation of this non-GAAP financial measure because it is unable to provide a meaningful or accurate calculation or estimation of certain significant reconciling items without unreasonable effort.

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Explanatory Notes to Reconciliations

Non-GAAP Financial Information

This press release contains financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. (GAAP). These non-GAAP measures include: Adjusted EBITDA and Adjusted fully diluted Earnings Per Share (EPS).

Maravai defines Adjusted EBITDA as net (loss) income before interest, taxes, depreciation and amortization and adjustments to exclude, as applicable: (i) incremental costs incurred to execute and integrate completed acquisitions, and associated retention payments; (ii) non-cash expenses related to share-based compensation; (iii) expenses incurred for acquisitions that were pursued but not consummated (including legal, accounting and professional consulting services); (iv) non-cash expense associated with adjustments to the carrying value of the indemnification asset recorded in connection with completed acquisitions; (v) loss or (income) recognized during the applicable period due to changes in the tax receivable agreement liability; (vi) restructuring costs; (vii) severance payments; (viii) legal settlement amounts; and (ix) inventory step-up charges in connection with completed acquisitions. Maravai defines Adjusted Net (Loss) Income as tax-effected earnings before the adjustments described above, and the tax effects of those adjustments. Maravai defines Adjusted Diluted EPS as Adjusted Net (Loss) Income divided by the diluted weighted average number of shares of Class A common stock outstanding for the applicable period, which assumes the proforma exchange of all outstanding units of Maravai Topco Holdings, LLC (paired with shares of Class B common stock) for shares of Class A common stock.

These non-GAAP measures are supplemental measures of operating performance that are not prepared in accordance with GAAP and that do not represent, and should not be considered as, an alternative to net (loss) income, as determined in accordance with GAAP.

Management uses these non-GAAP measures to understand and evaluate Maravai’s core operating performance and trends and to develop short-term and long-term operating plans. Management believes the measures facilitate comparison of Maravai’s operating performance on a consistent basis between periods and, when viewed in combination with its results prepared in accordance with GAAP, helps provide a broader picture of factors and trends affecting Maravai’s results of operations.

These non-GAAP financial measures have limitations as an analytical tool, and you should not consider them in isolation, or as a substitute for analysis of Maravai’s results as reported under GAAP. Because of these limitations, they should not be considered as a replacement for net (loss) income, as determined by GAAP, or as a measure of Maravai’s profitability. Management compensates for these limitations by relying primarily on Maravai’s GAAP results and using non-GAAP measures only for supplemental purposes. The non-GAAP financial measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP.

Conference Call and Webcast

Maravai’s management will host a conference call today at 2:00 p.m. PT/ 5:00 p.m. ET to discuss its financial results for the first quarter of fiscal year 2024. Approximately 10 minutes before the call, dial (888) 596-4144 or (646) 968-2525 and reference Maravai LifeSciences, Conference ID 6629752. The call will also be available via live or archived webcast on the "Investors" section of the Maravai web site at https://investors.maravai.com/.

About Maravai

Maravai is a leading life sciences company providing critical products to enable the development of drug therapies, diagnostics and novel vaccines and to support research on human diseases. Maravai’s companies are leaders in providing products and services in the fields of nucleic acid synthesis and biologics safety testing to many of the world's leading biopharmaceutical, vaccine, diagnostics, and cell and gene therapy companies.

For more information about Maravai LifeSciences, visit www.maravai.com.

Forward-looking Statements

This press release contains, and Maravai’s officers and representatives may from time-to-time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Investors are cautioned that statements in this press release which are not strictly historical statements constitute forward-looking statements, including, without limitation, statements regarding Maravai’s financial guidance for 2024; actions taken to position Maravai for sustained growth; Maravai’s long-term opportunities; the strength of Maravai’s end markets; Maravai’s expectations for growth and profitability; growth opportunities, including inorganic growth; and future innovations, constitute forward-looking statements and are identified by words like “believe,” “expect,” “see,” “project,” “may,” “will,” “should,” “seek,” “anticipate,” or “could” and similar expressions.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on management’s current beliefs, expectations and assumptions regarding the future of Maravai’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of management’s control. Maravai’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause Maravai’s actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

• The level of Maravai’s customers’ spending on and demand for outsourced nucleic acid production and biologics safety testing products and services.
• The impact of ongoing macroeconomic challenges and changes in economic conditions, including adverse developments affecting banks and financial institutions, follow-on effects of those events and related systemic pressures, on Maravai and Maravai’s customers’ current and future business operations.
• The effects of Maravai’s recent reduction in force, including on Maravai’s ability to attract and/or retain qualified key personnel.
• Use of Maravai’s products by customers in the production of vaccines and therapies, some of which represent relatively new and still-developing modes of treatment, and the impact of unforeseen adverse events, negative clinical outcomes, development of alternative therapies, or increased regulatory scrutiny of these modes of treatment and their financial cost on Maravai’s customers’ use of its products and services.
• Competition with life science, pharmaceutical and biotechnology companies who are substantially larger than Maravai and potentially capable of developing new approaches that could make Maravai’s products, services and technology obsolete.
• The potential failure of Maravai’s products and services to not perform as expected and the reliability of the technology on which Maravai’s products and services are based.
• The risk that Maravai’s products do not comply with required quality standards.
• Market acceptance of Maravai’s life science reagents.
• Significant fluctuations and unpredictability in Maravai’s quarterly and annual operating results, which make Maravai’s future operating results difficult to predict and could cause Maravai’s operating results to fall below expectations or any guidance Maravai may provide.
• Maravai’s ability to implement its strategic plan successfully.
• Natural disasters, geopolitical instability (including the ongoing military conflicts in Ukraine and the Gaza Strip) and other catastrophic events.
• Risks related to Maravai’s acquisitions, including whether Maravai achieves the anticipated benefits of acquisitions of businesses or technologies.
• Product liability lawsuits.
• Maravai’s dependency on a limited number of customers for a high percentage of its revenue and Maravai’s ability to maintain its current relationships with such customers.
• Maravai’s reliance on a limited number of suppliers or, in some cases, sole suppliers, for some of Maravai’s raw materials and the risk that Maravai may not be able to find replacements or immediately transition to alternative suppliers.
• The risk that Maravai’s products become subject to more onerous regulation by the FDA or other regulatory agencies in the future.
• Maravai’s ability to obtain, maintain and enforce sufficient intellectual property protection for Maravai’s current or future products.
• The risk that a future cyber-attack or security breach cannot be prevented.
• Maravai’s ability to protect the confidentiality of Maravai’s proprietary information.
• The risk that one of Maravai’s products may be alleged (or found) to infringe on the intellectual property rights of third parties.
• Compliance with Maravai’s obligations under intellectual property license agreements.
• Maravai’s or Maravai’s licensors’ failure to maintain the patents or patent applications in-licensed from a third party.
• Maravai’s ability to adequately protect Maravai’s intellectual property and proprietary rights throughout the world.
• Maravai’s existing level of indebtedness and Maravai’s ability to raise additional capital on favorable terms.
• Maravai’s ability to generate sufficient cash flow to service all of Maravai’s indebtedness.
• Maravai’s potential failure to meet Maravai’s debt service obligations.
• Restrictions on Maravai’s current and future operations under the terms applicable to Maravai’s Credit Agreement.
• Maravai’s dependence, by virtue of Maravai’s principal asset being its interest in Maravai Topco Holdings, LLC (“Topco LLC”), on distributions from Topco LLC to pay Maravai’s taxes and expenses, including payments under a tax receivable agreement with the former owners of Topco LLC (the “Tax Receivable Agreement” or “TRA”) together with various limitations and restrictions that impact Topco LLC’s ability to make such distributions.
• The risk that conflicts of interest could arise between Maravai’s shareholders and Maravai Life Sciences Holdings, LLC (“MLSH 1”), the only other member of Topco LLC, and impede business decisions that could benefit Maravai’s shareholders.
• The substantial future cash payments Maravai may be required to make under the Tax Receivable Agreement to MLSH 1 and Maravai Life Sciences Holdings 2, LLC (“MLSH 2”), an entity through which certain of Maravai’s former owners hold their interests in the Company and the negative effect of such payments.
• The fact that Maravai’s organizational structure, including the TRA, confers certain benefits upon MLSH 1 and MLSH 2 that will not benefit Maravai’s other common shareholders to the same extent as they will benefit MLSH 1 and MLSH 2.
• Maravai’s ability to realize all or a portion of the tax benefits that are expected to result from the tax attributes covered by the Tax Receivable Agreement.
• The possibility that Maravai will receive distributions from Topco LLC significantly in excess of Maravai’s tax liabilities and obligations to make to make payments under the Tax Receivable Agreement.
• Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of Maravai’s income or other tax returns.
• Risks related to Maravai’s annual assessment of the effectiveness of Maravai’s internal control over financial reporting, including the potential existence of any material weakness or significant deficiency.
• The fact that investment entities affiliated with GTCR, LLC (“GTCR”) currently control a majority of the voting power of Maravai’s outstanding common stock, and it may have interests that conflict with Maravai’s or yours in the future.
• Risks related to Maravai’s “controlled company” status within the meaning of the corporate governance standards of NASDAQ.
• The potential anti-takeover effects of certain provisions in Maravai’s corporate organizational documents.
• Potential sales of a significant portion of Maravai’s outstanding shares of Class A common stock.
• Potential preferred stock issuances and the anti-takeover impacts of any such issuances.
• Such other factors as discussed throughout the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Maravai’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, as well as other documents Maravai files with the Securities and Exchange Commission.
  

Any forward-looking statements made in this release are based only on information currently available to management and speak only as of the date on which it is made. Maravai undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Contact Information: Investor Contact: Deb Hart Maravai LifeSciences + 1 858-988-5917 ir@maravai.com Media Contact: Chelsea Rule MacDougall Advisors +1 781-235-3060 maravai@macdougall.bio