Neogenomics, Inc. · NASDAQ:NEO
Neogenomics — Investor Presentation (May 2019)
31 slides from Neogenomics's investor presentation, May 2, 2019
Slide 1: Investor Presentation April 2019
INVESTOR PRESENTATION April 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation has been prepared by NeoGenomics, Inc. (“we,” ”us,” “our,” “NeoGenomics” or the “Company”) and is made for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy securities, nor shall there be any sale of
Slide 3: Who We Are
Who We Are COMMON PURPOSE We save lives by improving patient care. VISION By providing uncompromising quality, exceptional service and innovative solutions, we will be the World’s leading cancer testing and information company. VALUES − Quality − Integrity − Accountability − Teamwork − Innovation We
Slide 4: Investment Highlights
Investment Highlights Leading pure-play oncology testing company Significant market growth tailwinds Extensive molecular/oncology test menu Leader in immuno-oncology testing Market share gains driven by customer satisfaction Rapidly growing Pharma Services business Track record of profitable growth
Slide 5: US Oncology Lab Market
US Oncology Lab Market Clinical Reference Labs Pure Play Oncology Reference Labs Niche Oncology Players (with oncology divisions) (comprehensive test menus) (limited test menus) 5
Slide 6: Net Promoter Score
Net Promoter Score How likely is it that you would recommend this company to a friend or colleague? (Scale of 1 to 10): • Promoters: 9-10 • Passives: 7-8 • Detractors: 0-6 • Net Promoter Score = (Promoters – Detractors) X 100 (Respondents) 500 452 Q4 2018 Clinical Client Survey 400 300 216 By The Nu
Slide 7: Track Record of Growth – Clinical Services
Track Record of Growth – Clinical Services **Clinical Testing Annual Revenue Clinical Tests Performed ($, MMs) 749,902 657,394 $242 563,132 $210 $203 $88 222,744 $79 $63 175,688 $56 135,580 $40 112,434 $32 56,710 75,576 $27 31,868 44,924 $18 20,998 $6 $10 4,082 12,838 $0.6 $2 1,152 2004 2005 2006 20
Slide 8: Rapidly Growing Pharma Services Business
Rapidly Growing Pharma Services Business $MMs $120.0 41% YoY Backlog 100.8 98.9 Growth $100.0 97.2 89.6 $80.0 71.7 $60.0 $40.0 26.7 21.2 21.2 45% YoY 17.8 $20.0 14.7 Revenue 9.6 10.6 9.4 6.5 8.2 Growth (4.2) (1.0) (0.3) (0.2) (2.1) (1.9) (1.9) (3.7) (1.5) (8.4) $0.0 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 -$2
Slide 9: Track Record of Improvement In Cost Per Test
Track Record of Improvement In Cost Per Test $350 $328 $325 $318 $300 $294 $275 $256 $250 $243 $225 $221 $201 $200 $179 $175 $171 $150 2010 2011 2012 2013 2014 2015 2016 2017 2018 Average Cost of Good Sold / Clinical Test 9
Slide 10: A New Standard in Oncology Testing
A New Standard in Oncology Testing NeoGenomics Well established as a leading provider of oncology testing for pathologists and hospitals Genoptix Unprecedented reach to all customer segments Broadest and deepest test menu in the Industry Outstanding reputation Deep knowledge of community oncol
Slide 11: Significant Near-Term Growth Drivers
Significant Near-Term Growth Drivers 6 Integrate Genoptix 5 Proactively address revenue 4 per test New managed care and GPO 3 contracts Pursue FDA- Approved multi- 2 gene NGS panel Global strategic alliance with PPD 1 Large backlog of signed Pharma contracts 11
Slide 12: Oncology Market Tailwinds
Oncology Market Tailwinds Aging population driving cancer incidence Increased survival driving follow-on testing Growing number of therapeutic options Increased therapeutic complexity Burgeoning oncology drug pipeline Emerging platforms and tests (NGS, TMB, MSI, etc.) 12
Slide 13: Appendix
Appendix (NEO
Slide 14: Balance Sheet, March 31, 2019
Balance Sheet, March 31, 2019 (unaudited, in thousands) ASSETS March 31, 2019 December 31, 2018 Cash and cash equivalents $ 13,195 $ 9,811 Accounts receivable 82,585 76,919 Inventory 9,670 8,650 Other current assets 10,495 8,288 Total current assets 115,945 103,668 Property and equipment (net of acc
Slide 15: Income Statement, March 31, 2019
Income Statement, March 31, 2019 (unaudited, in thousands) Three Months Ended March 31, 2019 2018 Net Revenue: Clinical Services $ 86,210 $ 56,971 Pharma Services 9,367 6,452 Total Revenue 95,577 63,423 COST OF REVENUE 48,462 36,120 GROSS PROFIT 47,115 27,303 Operating expenses: General and administ
Slide 16: Statements of Cash Flows, March 31, 2019
Statements of Cash Flows, March 31, 2019 (unaudited, in thousands) Three Months Ended March 31, CASH FLOWS FROM OPERATING ACTIVITIES 2019 2018 Net income (loss) $ (2,424) $ 644 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,271 3,633
Slide 17: Segment Results, March 31, 2019
Segment Results, March 31, 2019 (unaudited, in thousands) Three Months Ended March 31, 2018 % Change Pharma Operations: 2019 (as adjusted) Pharma Revenue $ 9,367 $ 6,452 45.2 % Cost of Revenue $ 5,811 $ 5,078 14.4 % Gross Profit $ 3,556 $ 1,374 158.8 % Three Months Ended March 31, 2018 % Change Clin
Slide 18: Adjusted EBITDA, March 31, 2019
Adjusted EBITDA, March 31, 2019 (unaudited, in thousands) Three Months Ended March 31, 2019 2018 Net Income (Loss) (GAAP) $ (2,424) $ 644 Adjustments to Net Income: Interest expense, net 1,826 1,486 Income tax (benefit) expense (2,023) 438 Amortization of intangibles 2,559 1,413 Depreciation 5,271 3
Slide 19: 2019 Guidance
2019 Guidance (unaudited, in thousands) For the Year Ended December 31, 2019 Low Range High Range Net income (loss) (GAAP) $ (3,000) $ 1,000 Amortization of intangibles 11,000 11,000 Non-cash, stock-based compensation (4) 8,000 8,000 Acquisition and integration related expenses 2,000 2,000 Other one
Slide 20: Company Overview
Company Overview Comprehensive, oncology-focused test menu • Extensive molecular-oncology offering, with 150+ tests • A leader in immuno-oncology testing • In-house digital pathology expertise Extensive clinical expertise • 80+ pathologists and PhDs Global Pharma Services offering • $101 million bac
Slide 21: Our Competitive Advantage
Our Competitive Advantage • Comprehensive, multi-modality “one-stop-shop” • Large and advanced somatic cancer test menu • Unparalleled reach into all customer segments, including hospitals, pathologists, and community oncology practices • National footprint and extensive payer contracts • Outstandin
Slide 22: Multi-modality One-stop-shop
Multi-modality One-stop-shop Complementary and Comprehensive Anatomic Flow Cytometry Cytogenetics FISH Molecular Pathology • Sanger Sequencing • Extensive • Robust Library of • Consultation Pathology • State-of-Art • Next-Gen Sequencing technology automation for High Validated Probes • Immunohistoch
Slide 23: Molecular Assays
Molecular Assays NeoGenomics offers a wide breadth of technology platforms • Broad menu • 150+ different tests • More than 30 multi-gene tumor tests WGS, WES, RNA-Seq, NeoAg • TMB, MSI, other immuno-oncology assays 1000’s Targeted genomic/RNA-Seq. & Cancer Panels 100’s Ion Torrent™ < 10 Illumina® No
Slide 24: Our Pharma Services Offering
Our Pharma Services Offering FDA Filing, Pre-Clinical Research & Phase Phase Phase Approval & Launch Discovery I II III Preparation Biomarker Discovery Analytical Validation Dx Development Clinical Validation Assay Design & Development Rx Development Track Dx Development Track Pharma Services Divisi
Slide 25: Revenue per test stabilized in 2018
Revenue per test stabilized in 2018 $600 $575 558 $550 535 $525 498 $500 $475 464 451 $450 $425 396 $400 $375 361 $350 323 $325 319 $300 $275 $250 $225 $200 $175 $150 2010 2011 2012 2013 2014 2015 2016 2017 2018 Avg. Clinical Testing Revenue/Test 25
Slide 26: Global Strategic Alliance With PPD
Global Strategic Alliance With PPD PPD’s preferred lab for oncology testing Significant revenue opportunity Expands global client base Expansion into Asia Collaborations for companion diagnostics Opportunities to leverage laboratory data for trials 26
Slide 27: Expands Reach into Oncology Practices
Expands Reach into Oncology Practices Significant opportunity Genoptix is well established in for growth this market segment $2.5 billion revenue Doubles existing sales force allowing opportunity for more territories and greater penetration >2,000 independent, Customized reports specifically communi
Slide 28: Leverages Best Offerings
Leverages Best Offerings MANAGED CARE CUSTOMIZED EXTENSIVE PHARMA NATIONAL AND GPO REPORTING TEST MENU SERVICES FOOTPRINT CONTRACTS NeoGenomics’ test Synergistic With operations on NeoGenomics Genoptix has a menu includes many pharma services both coasts, has a broad suite of tests that Genoptix bus
Slide 29: COMPASS® and CHART®
COMPASS® and CHART® COMPASS: comprehensive, hematopathologist-directed, integrated assessment report • Customized workflow on each patient case to provide a disease-specific evaluation based on up-to-date guidelines • Actionable diagnosis in a one-page correlation report • Consultation with assigned
Slide 30: Genoptix Bends the Curve
Genoptix Bends the Curve Potential Revenue $500 • Incremental revenue of $80-85M • ~$25 million of cost synergies $400 • ~25% EBITDA on incremental revenue by end of year three $300 $200 2018 2019 2020 2021 Pre Post Potential EBITDA $110 $90 $70 Note: graphs and estimates are for illustrative purpos
Slide 31: NeoGenomics
(NEO GENOMICS