Amidst a slowing macroeconomy, Maravai LifeSciences Holdings, Inc. ended FY2022 by beating expectations and posting record revenues and profits.
Maravai (NASDAQ:MRVI) released its FY2022 and Q4 earnings report on Feb. 22, showing exceptional growth in all its business, with the exception of its COVID-19 related CleanCap product.
For Q4, the company saw 67% revenue growth in its base businesses and 17% growth for the full year.
“Maravai produced another solid quarter with total revenues reaching $204.7 million, capping off an exceptional year of record revenues and profits,” said Carl Hull, executive chairman and interim CEO of Maravai.
Maravai is a global provider of life science reagents and services to researchers and biotech innovators. Its core businesses include nucleic acid production and biologics safety testing. Revenue for both in 2022 was $883 million, representing a 10% increase over the same period in the prior year.
“In early November of 2021, we provided our initial views for 2022 revenue expectations setting that range at $840 million to $880 million,” said Kevin Herde, executive vice president and chief financial officer of Maravai. “Our strong fourth quarter resulted in a full year revenue total of $883 million, performing in excess of that initial guidance for 2022.”
Maravai’s net income for 2022 totaled $490.7 million up from $469.3 million in 2021.
Core Business Growth
Nucleic acid production comprised the bulk of Maravai’s revenue with $813.1 million for the year – a 14% increase year-over-year. The nucleic acid production revenue was bolstered by an estimated $599.8 million of COVID-19 related CleanCap revenue, driven by demand for the company’s proprietary analogs as COVID-19 vaccine manufacturers scaled production earlier in the year, and for its modified RNA products and services as the technology becomes incorporated into more therapeutic and vaccine development programs.
While the year revenue increased year-over-year, the Q4 revenue was down 11% compared to Q4 in 2021, mostly due to decreasing demand for CleanCap, resulting in $56.2 million less revenue for CleanCap compared to Q4 in 2021.
While COVID-related business revenue receded in Q4, revenue from Maravai’s non-COVID nucleic acid production was up 101% over the same period in the prior year, driven by increased demand for the company’s mRNA raw materials and services.
“We are very encouraged by last year’s base business growth and continue to see strong demand for both CleanCap reagents and our messenger RNA GMP manufacturing services and mRNA constructs,” Hull said, adding that the company will have a “unique opportunity” for CleanCap by driving its inclusion across its early-stage messenger RNA customer base.
Revenue from Maravai’s biologics safety testing business was $69.9 million for the year – up 2% over 2021. The company cited growth in markets supporting cell and gene therapies, biosimilar and other biologic programs and growing adoption of its viral clearance prediction technology for biopharmaceutical manufacturing as drivers of the increase.
Although the overall year showed growth for Maravai’s biologics safety testing, Q4 revenue was down 3% over 2021’s fourth quarter, which the company attributed to a slow return to work in China, which impacted demand for HCP ELISA test kits.
“Entering 2023, we believe that we are incredibly well positioned to drive robust base business growth by innovating in ways that support our mRNA and cell and gene therapy customers’ discovery and clinical development programs,” Hull said.
In 2023, Maravai is anticipating its base business, excluding CleanCap sales related to COVID, to continue to grow at around 20%, Hull said.
“The reason this base business continues to deliver is simply the accelerating demand for our core products and services,” he added. “We offer the market the exact technologies and advanced manufacturing services that enable cell and gene therapy development.”
Although Maravai is expecting robust growth in its base business, it is also expecting a drastic decline in revenue from its COVID-related CleanCap business, down from 2022’s nearly $600 million to an estimated $100 million for 2023.
Maravai’s total revenue for 2023 is projected to be in the range of $420 million to $460 million.
“Even though our financial performance will face a headwind in 2023 via comparison to the phenomenal years of 2021 and 2022, we remain fully committed to building Maravai this year for growth and the opportunity we see ahead,” Herde said.
Alphazyme Acquisition Completed
In addition to reporting financials, Maravai used its Feb. 22 earnings call to share it had completed its acquisition of enzyme development and production company Alphazyme LLC.
Early last year, the company used $70 million of its cash position for the upfront consideration to acquire Alphazyme, Herde said.
“However, since the end of the year, we’ve also collected over half of the $139 million in year-end accounts receivable that reflected the strong fourth quarter revenues,” he added. “Thus, we have added another great asset to the Maravai family while still remaining in a strong net cash position.”
Maravai completed its acquisition of Alphazyme on Jan. 19 with a 1.27 million purchase of Dyadic International Inc.’s 1.99% stake in the company.
Hull said the Alphazyme acquisition adds a third unit to Maravai’s nucleic acid production (NAP) business – the first two being nucleic acid products and nucleic acid services.
“Their enzyme development and production expertise adds complementary capabilities to our nucleic acid production portfolio and provides a broader range of solutions for our shared customers,” he said. “Alphazyme will continue to support molecular biology innovators to develop and produce enzymes for DNA and RNA molecules, genomic medicines and genetic tests.”
In December 2022, Maravai appointed William “Trey” Martin, III to serve as President of Maravai’s Biologics Safety Testing Segment. The company said in a release at the time that it “expects that Martin will assume the role of Chief Executive Officer of Maravai LifeSciences on July 27, 2023.”
Martin was named Maravai’s CEO earlier in 2022 but that appointment was put on hold after Martin’s former employer, Danaher, said he had violated a non-compete clause by accepting the position at Maravai.
Hull, Maravai’s co-founder, will continue to serve as Maravai’s Executive Chairman and Interim CEO.
CEO: Carl Hull
HEADQUARTERS: San Diego
REVENUE: $883 million (2022)
STOCK: MRVI (NASDAQ)
NOTABLE: Maravai provides 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 therapies companies.