Neogenomics, Inc. · NASDAQ:NEO
Neogenomics — Merger or Acquisition (December 2015)
26 slides from Neogenomics's merger presentation, Dec 17, 2015
Slide 1: Special Investor Presentation: Acquisition of Clarient
Special Investor Presentation December 14, 2015 Acquisition of Exhibit 99.1
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation contains statements which constitute forward-looking statements within the meaning of Section 27A of the Securities Act, as amended; Section 21E of the Securities Exchange Act of 1934; and the Private Securities Litigation Reform Act of 1995. The words “m
Slide 3: Investment Highlights
Investment Highlights Fast growing cancer genetics lab servicing Oncologists, Pathologists and Hospitals Strategic client partnerships created by “Tech-Only” model Dynamic, rapidly- growing and consolidating industry Industry-leading revenue & test volume growth Most Comprehensive Cancer Testing Men
Slide 4: Experienced Management Team
Experienced Management Team Douglas VanOort, Chairman & CEO Chief Operating Officer, Quest Diagnostics Executive Vice President, Corning Life Sciences, Inc. Maher Albitar, M.D., Chief Medical Officer & Director of R&D Med. Dir. for Hematopathology & Oncology and Chief of R&D, Quest Nichols Institute
Slide 5: NEO's Proven Track Record of Consistent Growth
NEO’s Proven Track Record of Consistent Growth Base NEO* Annual Revenue Base NEO* Tests Performed ($, 000s) CAGR = 65% CAGR = 65% * Base NEO represents organic revenue and test volume growth from legacy business and excludes the impacts from the PathLogic acquisition.
Slide 6: Rapidly Growing Market Opportunity
Rapidly Growing Market Opportunity The exploding cost of cancer care offers extraordinary opportunities for those labs that can deliver innovative and value-based solutions to the healthcare system. Source: National Institute of Health (NIH)
Slide 7: 2020 Market Opportunity - Value & Cost Effective Testing
2020 Market Opportunity-Value & Cost Effective Testing Clearly, the lab industry is approaching a tipping point: Growth in ACO’s Currently > 750 ACO’s approved by CMS. Growth in ObamaCare plans – with very high deductibles. Growth in Medicaid plans – Medi-Cal now >12mm covered lives. Growth in “bund
Slide 8: Clarient Transaction Background
Clarient Transaction Background NeoGenomics’ has had a long-standing Vision to become the leading cancer testing and Information company Key Strategic Elements of Strategy High-quality and low-cost provider. Growth by market share gains as “one-stop-shop” for cancer genetic testing. Innovate aggress
Slide 9: Consistent with NEO's Acquisition Strategy
Consistent with NEO’s Acquisition Strategy NEO Focus – Upper right hand quadrant Synergistic Deals High High Low Market Growth Technologies Clarient Attributes Technology leader High growth (clinical trials) Revenue scale Nationwide presence Complementary footprint Geographic proximity Ongoing GE af
Slide 10: Strategic Rationale
Strategic Rationale Lab scale allows opportunity to be the low-cost provider in each key laboratory discipline. Better balance of clinical products to reduce concentration risk. Significantly enhanced Clinical Trials capability. Create greater economies of scale in IT, Regulatory, Billing, Complianc
Slide 11: Key Benefits
Key Benefits Synergy potential of $20mm - $30mm/year within 3-5 year Laboratory, Purchasing, Cross-selling, etc. East Coast/West Coast labs Combine Irvine and Aliso Viejo Low cost position in every testing discipline FISH, Flow, Cytogenetics, IHC, Digital Pathology, Molecular Leadership in hematolog
Slide 12: Clinical Trials - BioPharma
Clinical Trials - BioPharma A rapidly growing part of Clarient’s business and a fantastic opportunity . . . Over $20mm/yr. in current business Strong relationships with several leading Pharmaceutical firms PDL1 22C3 – FDA Approved companion diagnostic for Keytruda Continued push into Companion Dx an
Slide 13: Revenue Synergies – Cross Selling
Revenue Synergies – Cross Selling - World Class Molecular Testing Menu - NeoTYPE Panels - Extensive Tech-only Service Offering - Excellence in Heme Laboratory Testing - Leading growth-oriented Sales & Mkting Team - Industry Leading Digital Pathology Platform - Strong capabilities in IHC/Histology -
Slide 14: Growth – Expanded Geographic Coverage
Growth – Expanded Geographic Coverage NEO Field Sales Representation (27) Clarient Field Sales Representation (27) Does Not Include Sales Management or Managed Care
Slide 15: Organic Growth through Market Demand
Organic Growth through Market Demand Core Growth 10 – 15% Demographic Changes Market Share Gains Innovation Driven Growth 5 – 10% Constant Test Development Liquid Biopsies “plasma tests” “Smart Medicine” BioPharma Growth 20-25% Clinical Trials Companion Dx We have very real opportunity to grow volum
Slide 16: Transaction Consideration
Transaction Consideration $80 MM Cash $15 MM – NEO cash from balance sheet $10 MM – New, 5-year $25mm revolver $55 MM – New, 5-year Term Loan $110 MM of Series A Redeemable Preferred Stock Issued at $7.50 per share Redeemable by NEO at any time at the issue price plus accrued PIK dividends Up to $10
Slide 17: Implied Transaction Valuation & Revenue Multiple
Implied Transaction Valuation & Revenue Multiple
Slide 18: Recent Financial Information
Recent Financial Information * Excludes intangible impairments Pro Forma Adjusted EBITDA includes adjustments to reflect the business being acquired. (Dollars in Millions)
Slide 19: 2016 Combined Pro Forma Revenue Bridge
2016 - Combined Pro Forma Revenue Bridge(1) (1) Preliminary Estimate - Subject to further refinements after close We estimate combined revenue of approx. $240 – $250 mm in 2016… NEO estimates net positive price adjustments of $4mm plus at least $15mm of growth in core business. We estimate Revenue D
Slide 20: 2016 Pro Forma Adjusted EBITDA Bridge
2016 Pro Forma Adjusted EBITDA Bridge (1) NEO expects to realize significant EBITDA growth and cost synergies in 2016 and beyond as a result of efficiencies gained through the combination with Clarient The 2016 PF Adjusted EBITDA bridge conservatively estimates a $3mm reduction to Adjusted EBITDA as
Slide 21: NeoGenomics Vision and Goals
NeoGenomics Vision and Goals Leadership Goals: To be the leading oncology-focused testing and information company in the World. Competencies: Outstanding Scientific, Medical and Informatics expertise. Partnerships for efficiency/effectiveness across health-care care continuum Disciplined process man
Slide 22: Matters To Be Voted Upon at Shareholder's Meeting
Matters To Be Voted Upon at Shareholder’s Meeting Issue 15 MM shares of Common Stock and 14.667 MM shares of Series A Preferred Stock, as may be adjusted, to GE Medical Holdings AB Increase authorized shares of Common Stock to 250 MM Increase authorized share of preferred stock to 50 MM Approval of
Slide 23: Appendix
oe Appendix & § NeoGenomics, Inc. S32 CLARIENT GE Healthcare Company Appendix ($)Neocenomics Inc. 23 20
Slide 24: Clarient Overview
Core business focused on IHC, Flow, FISH, Cytogenetics and Molecular tests National reach with focus on both independent and hospital pathologists Consistently strong growth - early development to late stage testing > 90 projects in process for >30 customers Clarient Overview IHC/Digital Pathology:
Slide 25: Clarient Test Volume and Average Unit Price
Clarient Test Volume and Average Unit Price 2015 data is a preliminary estimate. AUP data is for clinical tests only.
Slide 26: Clarient Revenue and Payer Mix in 2014
Clarient Revenue and Payer Mix in 2014