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Maravai IPO: another biopharmaceutical company worth considering

By Alexandra Pankratyeva

14:52, 19 November 2020

Maravai IPO

In 2020, the year severely beaten by the Covid-19, healthcare and biopharmaceutical companies have become the major drivers of the positive market sentiment. People are closely watching and waiting for an effective coronavirus vaccine, which can drag the world out of crisis and help it get back to normality.

While investors were reaching towards Prizer and BioNTech on the news of 90 per cent effectiveness of their vaccine, another drugmaker Moderna reported even more encouraging results with a 94.5 per cent effective vaccine.

The news can definitely build a positive ground for Maravai LifeSciences going public on November 20, 2020. The company, which focuses on mRNA research and produces products for the development of vaccines, including the Covid-19 vaccines, announced the terms of its initial public offering.

Let’s find out everything you should know about the Maravai LifeSciences Holdings IPO and the prospects of the MRVI stock to become another favourite among investors and traders.

Quick take on the Maravai IPO

Maravai LifeSciences (MRVI) filed the registration statement, planning to raise $1.275bn (€1.07bn, £0.97bn) by offering 50 million MRVI stocks at a price range from $24 to $27. Taking a midpoint of the proposed range, this would make the Maravai IPO value of around $6.6bn (€5.56, £4.98). Maravai LifeSciences IPO date is set on November 20, 2020.

Maravai specialises in the development of nucleic acids, protein detection reagents and provides biologics safety-testing services. The company’s products and services are used by more than 50,000 customers worldwide, including the top 20 global biopharmaceutical businesses.

In support of their IPO filing, Maravai LifeSciences revealed strong growth results across all the major metrics. It booked $185.7m in revenue for the nine months ended September 30, 2020. The net income was $64m, compared to just $249,000 in 2019.

The MRVI stock will be listed and traded on the Nasdaq stock exchange. Bookrunners on the deal include famous names such as Morgan Stanley, Goldman Sachs, Jefferies, Credit Suisse, BofA Securities, UBS Investment Bank, KeyBank Capital Markets, William Blair and Stifel.

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What do we know about Maravai?

Maravai LifeSciences provides complex nucleic acids for diagnostic and therapeutic applications, products to detect the expression of proteins and antibody-based products to detect impurities during the production of biopharmaceuticals.

The major Maravai’s product lines include:

The company participates in three major market segments, including nucleic acid production, biological safety and protein detection. According to Maravai’s registration statement, its addressable segments, adjusted for the mix of products they offer, are expected to grow at an average rate of 20 per cent per annum through 2023.

It is believed that the company will benefit from favourable industry dynamics, as the biopharma space remains well-funded. Additionally, the level of capital markets activity in this sphere over recent years underscores the increasing cost of drug development and the rapid pace of biopharmaceutical innovation.

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According to Dealogic, biotechnology companies have raised more than $195bn during the initial public offerings between 2015 and 2020.

Maravai is an expert in RNA and mRNA products, which make the core of its capabilities. The first clinical trial for an mRNA therapeutic agent CleanCap®

took place in 2016. Since then it underwent more than 30 clinical trials, particularly focused on vaccines against viruses and cancer.

As of September 30, 2020, CleanCap® was used by more than 100 customers and incorporated into several programmes targeting immunisation against coronavirus, including the one from Pfizer and BioNtech. Around 39 per cent of the company’s revenue for the nine months ended September 30, 2020 came from products that support mRNA research.

According to MarketsAndMarkets’ research, the international gene therapy market is expected to grow from $2.8bn in 2019 to $13bn by 2024. This makes a very impressive combined market growth rate (CAGR) of 27.8 per cent from 2019 to 2024.

The major drivers for such a fast growth are the continuous high frequency of cancer and more investments in treatment options and innovation. However, high cost of gene therapies may slow down the adoption within the market.

Maravai financial performance

Strong financial performance is one of the major arguments for the Maravai LifeSciences stock success and popularity among traders. The company’s financial results so far can be outlined as follows:

  • Significant growth in revenue

  • Gross profit and gross margin growth

  • Growing operating profit

  • Increasing cash flow from operations

  • Swing to net income

The detailed financial data, shared on the verge of the offering, can contribute to MRVI IPO stock price upward movement post-IPO.

50 million Maravai LifeSciences shares of Class A are going to start trading at a midpoint price of $25.50 for gross proceeds of around $1.275bn. After the IPO, GTCR, Maravai’s equity sponsor, will get 81 per cent of voting power through the ownership of Class A and Class B shares.

What makes the Maravai IPO so unusual is that it is a rare case when a private equity-owned company has such high revenue growth numbers. Besides, the firm has a relatively low debt, proving the company’s solid financial performance.

Once Maravai goes public, MRVI shares will be available for trading through CFDs at Capital.com. The excellent growth prospects, backed by strong company’s fundamentals makes the Maravai IPO worth your attention.

Markets in this article

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Moderna Inc (Extended Hours)
110.84 USD
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