Cytek Biosciences Stock – A Play on Flow Cytometry

Physicist Richard Feynman’s famous talk “There’s Plenty of Room at the Bottom” proposed that mankind would eventually get around to creating things at a cellular level, and it looks like we’ve started down that path. The single-cell revolution is here, with about a dozen life sciences companies offering technology platforms for working with cells. Today, we’re going to look at another firm doing cool things at a cellular level – Cytek Biosciences (CTKB).

About Cytek Biosciences Stock

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We previously discussed the “single-cell revolution” and looked at a handful of companies offering pick-and-shovel platforms for manipulating and analyzing cells. For whatever reason, Cytek Biosciences wasn’t on that list, perhaps because their underlying technology has been around since the 1970s. The company dabbles in something called flow cytometry, a technique for analyzing the physical and chemical characteristics of a population of cells. Using lasers and fluorescent tags, cells can be studied by researchers in fields such as molecular biology, pathology, immunology, virology, and medicine – transplantation, hematology, tumor immunology and chemotherapy, prenatal diagnosis, and genetics.

Cytek has developed a first of its kind full spectrum flow cytometer that allows for full spectrum profiling (FSP). Their FSP platform addresses the inherent limitations of other flow cytometry technologies by providing a higher density of information with greater sensitivity, more flexibility, increased efficiency, and all at a lower cost for performance. Since their first commercial launch in mid-2017, they’ve sold around 750 instruments to over 620 customers.

Credit: Cytek Biosciences

In June of this year, they released a cell sorting instrument, something that should be of interest to investors in Berkeley Lights.

The Cytek Biosciences S-1 filing details some of the 210 peer-reviewed publications that utilize the platform to do interesting things, with a fair number involving The Rona. One use case mentioned is in the area of nanobiotechnology or nanobiology as the company calls it. (Every few years, it’s important to give an old technology a new name to spruce it up a bit.) While other flow cytometers struggle to detect biological particles below 150 nanometers, Cytek’s sensitive system enables researchers to peer down to the 100-nanometer level. This can come in handy when studying how nanoparticles like those used in Moderna’s COVID vaccine interact with cells.

Cytek Biosciences Revenues

One thing Cytek Biosciences has going for it is revenue growth. From 2019 to 2020, revenues increased by 60%. Take that, coronavirus.

Credit: Cytek Biosciences

Around half of 2020 revenues came from sales to academic and government-owned institutions, which means they’re subject to R&D budgets that can change based on the whims of the economy. Over 80% of revenues come from direct sales, something that’s not easy in a highly competitive industry.

In looking at revenue segmentation, the majority of Cytek’s revenues come from the sale of instruments and a small percentage from “services.” Most companies we see selling life sciences platforms break out consumables because they’re a key component of a highly profitable razor and blades model down the road. Cytek doesn’t do that, instead stating:

Although we expect sales of our core instruments to continue to represent the largest percentage of our revenue in the future, we expect reagent sales to increase as a percentage of our total revenue.

The statement “increase as a percentage” doesn’t tell us much about what percentage of revenues they’re expecting from their proprietary reagents in the future (reagents is a fancy word for the main ingredients of any chemical-based test). This unknown is one of the reasons we don’t see this stock joining our portfolio anytime soon.

To Buy or Not to Buy

When assessing the “investability” of any given technology, we always want to know how formidable the competition is. Plenty of big names are listed in the area of flow cytometry, one of those being dividend champion Becton Dickinson (BDX) which MarketsandMarkets names a global leader. They cite “its broad portfolio of flow cytometry products and well-established presence across the globe” as the reasons for its large market share in flow cytometry.

In 2018, BDX sued Cytek Biosciences claiming, “trade secret misappropriation and copyright infringement.” The companies settled last year with BD granting Cytek non-exclusive access to certain patents in exchange for a number of financial considerations – about $8 million in cash payments, some shares, low single-digit royalties, and a payment for an undisclosed amount should Cytek be acquired. This tells us the market leader is well aware of what technologies are being developed and will always be able to leverage their size and strength when needed to thwart the competition.

The large number of applications for flow cytometry means there’s room for more than one player, but Cytek will likely need to displace existing platforms from large providers who are well entrenched and aware of what direction the technology is taking. Large medical device companies spend billions of dollars developing their technologies, and one never knows what’s around the corner in a highly competitive market.

We’ve already placed our bets for the single-cell theme with positions in 10X Genomics and Berkeley Lights, and don’t see the need to add another name to that list.


Companies that build better substitutes for existing technology platforms always need to worry about leading providers of the platforms they’re trying to displace. For Cytek Biosciences, that happens to be major medical device companies with vast amounts of resources. That could mean an acquisition is in their future, or it could spell tough times ahead, but it’s not something we’re interested in. We’ll stick with our current bets in hopes they come out ahead in the single cell revolution.

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