As pockets fill with cash, Maravai spends $240M to ensure pure mRNA production - Endpoints News

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A San Diego-based life sci­ences com­pa­ny is tak­ing over a long­time sup­pli­er and Cal­i­for­nia neigh­bor to boost the pu­ri­ty of its nu­cleotides and im­prove the man­u­fac­tur­ing process of mR­NA, as the boom calls for more de­mand.

Mar­a­vai Life­Sciences ac­quired My­Chem for $240 mil­lion cash in a move that CEO Carl Hull says will help ex­pand the com­pa­ny’s of­fer­ing of ther­a­peu­tics and vac­cines.

“The great thing for us is that it al­lows us to have bet­ter con­trol over our sup­ply chain, so that’s a ben­e­fit for us and for our cus­tomers, but it al­so al­lows us to of­fer more com­po­nents, more dif­fer­en­ti­at­ed prod­ucts to our cus­tomers,” he said.

My­Chem pro­vides its cus­tomer base with ul­tra-pure nu­cleotides, for use in drugs, di­ag­nos­tics, ge­nomics and re­search. Most preva­lent is its mar­ket for mR­NA syn­the­sis. The deal adds to Mar­a­vai’s abil­i­ty to re­duce im­pu­ri­ties and prob­lems in the man­u­fac­tur­ing process that arise fur­ther down the line, Hull said in a call with End­points News.

Mar­a­vai went pub­lic in No­vem­ber 2020, with a $1.62 bil­lion raise in its ini­tial pub­lic of­fer­ing. The com­pa­ny’s quar­ter­ly rev­enue has since more than dou­bled to just over $200 mil­lion.

In Sep­tem­ber, Vec­tor Lab­o­ra­to­ries sep­a­rat­ed it­self from Mar­a­vai for the first time since it was ac­quired in 2016, with a $124 mil­lion cash buy­out from Thomp­son Street Cap­i­tal to help fund its pro­tein de­tec­tion op­er­a­tions. The sale pro­vid­ed Mar­a­vai with some mon­ey to in­vest more in its two fo­cus ar­eas: bi­o­log­ics safe­ty test­ing and nu­cle­ic acid pro­duc­tion.

“As our busi­ness grew in the nu­cle­ic acid field, Vec­tor be­came less strate­gi­cal­ly im­por­tant or rel­e­vant for us,” Hull said in a call.

In an earn­ings call with in­vestors, Mar­a­vai ex­ec­u­tives re­vealed that its nu­cle­ic acid pro­duc­tion busi­ness in­creased about 40%. A lot of that comes from the de­mand for its Clean­Cap tech­nol­o­gy, a pro­pri­etary cap­ping so­lu­tion that is crit­i­cal to the pro­duc­tion of mR­NA, that has noth­ing to do with COVID-19. CFO Kevin Herde said in the call that it showed “re­al­ly nice growth across the port­fo­lio.” When asked about the large amount of cash — around $550 mil­lion, be­fore the My­Chem deal — the com­pa­ny had, Hull said:

We con­tin­ue to want to bring some­thing mean­ing­ful across the line, and we’re fo­cused in the Nu­cle­ic Acid Pro­duc­tion seg­ment pre­dom­i­nant­ly first and then cer­tain­ly Bi­o­log­ic Safe­ty Test­ing as well. There are just few­er as­sets in which we’re track­ing in that space. So that is cer­tain­ly a big fo­cus of ours as well.

Be­fore the My­Chem deal, Hull said that the com­pa­ny was close to debt-free. This deal will leave them with about $310 mil­lion in cash.

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As pockets fill with cash, Maravai spends $240M to ensure pure mRNA production - Endpoints News
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