Maravai LifeSciences, the Properly Fallen Princess

Maravai LifeSciences Holdings, Inc. (code: MRVI) is a leading life sciences company that provides critical products to support drug treatments, diagnostics, and the development of novel vaccines, and support research on human diseases. The company is inIt has outstanding advantages in the two major fields of nucleic acid synthesis and biosafety testing.

On February 25, 2022, Bloomberg reported that Sartorius AG (Sartorius) proposed to acquire Maravai LifeSciences (MRVI) for $11 billion.

Sartorius is one of the most famous life science group companies in the industry that continues to grow bigger and stronger through continuous acquisitions. This bid must have been well thought out. At the time, MRVI's board of directors believed that the bid seriously underestimated the company's value, so it rejected Sartorius' merger and acquisition request. Time has changed, and since then MRVI's market value has been falling all the way down. Today, it is less than 1 billion US dollars.

Does MRVI have a future?

1. Nucleic Acid Synthesis Business Line (Nucleic Acid Production, NAP)

It provides highly modified and complex nucleic acids and related enzymes for use in fields such as molecular diagnosis, vaccines, and treatments.

Clean Cap Technology (CleanCap®) is the company's key product in the mRNA field.

The business contributed 77% of the company's total revenue in the third quarter of 2022.

Biosafety Testing Business Line (Biologics Safety Testing)

It mainly provides impurity detection kits and services in the biological product production process.

The products are widely used in various fields such as monoclonal antibodies, cell and gene therapy.

The business contributed 23% of the company's total revenue in the third quarter of 2022.

1. Nucleic acid synthesis technology: Through its subsidiaries, such as TriLink BioTechnologies, Maravai LifeSciences provides high-quality customized nucleic acid synthesis services, including the production of oligonucleotides, mRNA, and other nucleic acid products that are widely used in research, diagnosis, and treatment.

2. Nucleic acid modification and labeling: The company also focuses on providing various modified and labeled nucleic acids for scientific research and clinical applications.

3. Key reagents for biopharmaceutical production: Maravai LifeSciences provides key reagents for biopharmaceutical production, such as those used in vaccine developmentHigh purity nucleic acid。

4. GMP production capacity: The company has the ability to provide products that meet GMP standards (Good Manufacturing Practice), which is particularly important for clinical applications and commercial production.

The company mainly targets high-growth market segments such as biopharmaceuticals, cell and gene therapy, and mRNA vaccines and therapeutics, which are currently growing faster than the overall market.

1. Nucleic acid synthesis market: According to industry consultant statistics, the annual sales volume of this market in 2022 is about 150 billion US dollars. The company estimates its addressable market to be around $37 billion.

2. Biosafety testing market: According to industry consultant statistics, the annual sales volume of this market in 2022 was approximately US$15.2 billion. The company estimates its addressable market to be around $3.3 billion.

Overall, the company-addressed market segments of nucleic acid synthesis and biosafety testing will total about US$152 billion in 2022. The company estimates its overall addressable market to be around $37 billion.

Maravai LifeSciences atThe field of nucleic acid synthesis and biosafety testingIt has some of the following exclusive competitive advantages:

Expertise in synthesizing highly modified and complex nucleic acidsIt can meet requirements from R&D to GMP levels. The company's expertise in complex chemistry has led customers to seek partnerships with the company to design complex products that meet high performance requirements.

CleanCap® enables highly efficient mRNA capping and is more suitable for large-scale production than other methods. Some of the company's products, such as CleanCap technology, have been protected by intellectual property rights.

Proprietary products and superior product performance. For example, the antibodies in the company's HCP products are proprietary and can only be provided by the company. The company's products provide better solutions than competitors while ensuring reliability. For example, the yield, stability, and safety of CleanCap technology are superior to alternative technologies.

The biosafety test kits manufactured by the company are widely used to detect impurities in the production process of different biological products.

Long-term partnerships have been established with over 96% of the world's top 25 biopharmaceutical companies.

The product line covers all stages from R&D to clinical and commercialization.

World-classLaboratory facilities for nucleic acid synthesis and analysis.

Innovative capabilities in key materials and technologies for mRNA, cell, and gene therapy.

As customer projects continue to grow, we can provide large-scale service support.

The experienced management team ensures the continuous improvement of technical advantages.

The explosive growth and decline of COVID-19 mRNA vaccines has led to a sharp rise and fall in the company's performance over the past 3 years. Revenue increased 181% to US$799 million in 2021, and continued to grow 10.4% to US$883 million in 2022. As demand for mRNA declined, revenue began to decline sharply in 2023, but it also returned to close to the historical growth trend value.

The company estimates that revenue from COVID-19 vaccine-related products and services in 2022 and 2021 will account for 67.9% and 69.7% of total revenue, respectively.

The company's revenue for the first three quarters of 2023 was US$215 million, the adjusted EBITDA was US$44.8 million, and the corresponding EBITDA margin was 21%.

Third-quarter revenue of $67 million, adjusted EBITDA of USD 12 million, corresponding EBITDA margin of 17.9%. Adjusted free cash flow for the quarter was $400,000. Adjusted free cash flow is what we define as a non-GAAP measure of adjusted EBITDA minus capital expenditure.

Fourth quarter guidance:The forecast for the fourth quarter is that total revenue will be between $60 million and $70 million. The NAP Division (Nucleic Acid Production) guidance range is about $51 million, including CleanCap's estimate of COVID vaccine revenue of $18 million; the midpoint of the BST Division (Biologics Safety Testing) guidance range is around $14 million. Revenue for the full year of 2023 is expected to reach US$275 million to US$285 million, while 2020 revenue was US$284 million (the year the COVID-19 pandemic began, driving the company's revenue up 98% year over year).

Revenue of US$280 million and a net adjusted EBITDA of US$89.6 million will be a new starting point for the company. Achieving a compound annual growth rate of 15% by 2030 is very likely.

The current valuation is simply the price of cabbage.