Neogenomics, Inc. · NASDAQ:NEO
Neogenomics — Investor Day (April 2023)
79 slides from Neogenomics's investor day presentation, Apr 4, 2023
Slide 1: Exhibit 99.1
Exhibit 99.1
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure 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 any
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains financial measures, such as adjusted EBITDA, adjusted gross margin and adjusted net income, which are considered non- GAAP financial measures under applicable U.S. Securities and Exchange Commission rules and regulations. These non-GAAP financia
Slide 4: Building a Foundation for Long-Term, Sustainable Growth
Building a Foundation for Long-Term, Sustainable Growth Chris Smith Chief Executive Officer
Slide 5: Today's Agenda
5 Today’s Agenda Q&A Financial Overview and Outlook The Role of MRD in Clinical Practice with Dr. Peter Beitsch Innovating for the Future Transitioning to an Integrated Enterprise Operating Model Delivering Operational & Commercial Excellence Market Leader in Oncology Diagnostics Testing
Slide 6: Mission and Vision
Mission We save lives by improving patient care. Vision We are becoming the world's leading cancer testing, information, and decision- support company by providing uncompromising quality, exceptional service, and innovative solutions. 6
Slide 7: We Are a World-leading Oncology Diagnostics Company
We Are a World-leading Oncology Diagnostics Company We Are a World-leading Oncology Diagnostics Company 7 We have a comprehensive oncology menu offering of over 600 tests We are oncology experts focused on developing innovative oncology diagnostic solutions We have one of the largest oncology patien
Slide 8: World-Class Team of Experienced Professionals
8 World-Class Team of Experienced Professionals Today’s Speakers Shashikant Kulkarni, MS, PhD, MBA, FACMG Chief Scientific Officer Marcus Silva, JD, MBA SVP, Oncology Diagnostics Greg Sparks Chief Technology Officer Ali Olivo General Counsel and Corporate Secretary Gary Passman Chief Culture Officer
Slide 9: Cancer Testing Is a Large, Underserved, & Growing Market
Sources: NHS, NSF, NIH, UN, WHO, primary market research, Precision for Medicine analysis, NEO internal estimates. Christel, M. (2022, June 9). 2022 Pharm Exec Top 50 Companies. PharmExec. https://www.pharmexec.com/2022-pharm-exec-top-50-companies. 9 Cancer Testing Is a Large, Underserved, & Growing
Slide 10: We Have a Unique Position in the Cancer Diagnostics Market
We Have a Unique Position in the Cancer Diagnostics Market Any other trademarks, registered marks and trade names appearing in this slide are the property of their respective holders. Large Clinical Reference Labs • Profitable • Slow growth • Thousands of tests • Diversified focus Niche Oncology Com
Slide 11: Moving into 2023
11 Moving into 2023
Slide 12: Building Momentum Into 2023
Reference non-GAAP reconciliation slides in Appendix for details. Building Momentum Into 2023 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Revenue Growth Rate 1.4% 2.8% 6.1% 10.3% Adj Gross Profit Margin 36.8% 39.0% 41.7% 44.5% $54M $129M $43M $117M -$19M $125M -$1M -$16M $49M -$12M $139M $62M Adj EBITDA Revenue
Slide 13: Organizational Model Supports Long-Term, Sustainable Growth
Demand Cycle • Own end-to-end workflow of patient samples to improve outcomes and TAT for clinicians and patients • Enhance data infrastructure and strategy • Decrease costs by increasing operational leverage across all facets of enterprise • Minimal residual disease (MRD), liquid biopsy and therapy
Slide 14: NeoGenomics Strategic Pillars
TODAY ~540K Patients served annually On our way to serving patients annually 1 million 2028 NeoGenomics Strategic Pillars Mission, Vision, & Building Long-Term Sustainable Growth Profitably Grow Our Core Business Enhance Our People & Culture Drive Value Creation Accelerate Advanced Diagnostics 14
Slide 15: Our 2023 Strategic Priorities
Drive Value Creation • Increase Productivity & Efficiency • Manage G&A Spend; Re-Invest in Strategic initiatives • Enhance Automation & Digital Implementation • Drive Revenue Cycle Management Accelerate Advanced Diagnostics • Launch New Innovative Products • RaDaR (MRD) • Neo Comprehensive (NGS) • C
Slide 16: Q1 2023 Highlights
16 Q1 2023 Highlights • Improved Q1 TAT by 17% YoY (following a 36% improvement in Q4 YoY) • Generated $25 million in annualized cost savings from reorganization activities, much of this is being reinvested in growth initiatives • Successful commercial launch of four new assays – RaDaR, Neo Comprehe
Slide 17: Key Takeaways
Key Takeaways We have a world-class leadership team now in place, and 2,200 teammates committed to our mission We have a winning strategy and unique value proposition to capture a large share of a growing underserved market NeoGenomics is well positioned to win as a pure-play comprehensive oncology
Slide 18: Delivering Operational & Commercial Excellence
Delivering Operational & Commercial Excellence Warren Stone President, Clinical Services Division
Slide 19: 2023 Key Priorities
Revenue Cycle Management 19 Customer Experience Portfolio Optimization Commercial Execution 2023 Key Priorities
Slide 20: Clinical Services Division Customer Segmentation and Sales Resource Summary
20 Clinical Services Division Customer Segmentation and Sales Resource Summary Commercial Execution Hospitals & Academic Centers (Clinicians, Labs) • ~6,000 total hospitals in the US1 • ~1,000 teaching hospitals or academic centers in the US1 Community Practices (Oncologists, Pathologists) • ~950 on
Slide 21: Commercial Growth Strategy
21 Commercial Execution Protect Expand Win Commercial Growth Strategy
Slide 22: Commercial Execution
Downstream Marketing Establishing campaigns, demand, and lead-generation capabilities to drive increased awareness and a rich pipeline of marketing-qualified leads 22 32% Increase in Commercial Resources to Expand Coverage and Enhance Execution Commercial Execution CUSTOMER Sales Investing in additi
Slide 23: Portfolio Segmentation & NGS Focus
* Based on market definition data on file, 2016-2021. 23 Portfolio Segmentation & NGS Focus Drive Growth Portfolio Optimization Market Dynamics* • Neo is the market leader in overall heme testing based on strong relationships with heme oncologists and hospital pathology • Neo is the heme NGS market
Slide 24: Portfolio Optimization: New Competitive Products
24 Portfolio Optimization Easy to Order With NeoAccess Streamlined Report Interrogate Data With NeoSeek NeoType DNA & RNA – Lung • 10-day TAT • Reduced specimen (10 slides) • CNV by NGS 2 New Competitive Products Neo Comprehensive • 10-day TAT • Pan-cancer • 517 genes • DNA & RNA • CNVs, MSI, TMB FA
Slide 25: Portfolio Optimization Offers Significant Growth Potential
25 Portfolio Optimization Portfolio Optimization Offers Significant Growth Potential Targeted Opportunities Portfolio, new markets, business model innovation Concepts Being Evaluated • International sponsored testing programs • Enhanced germline testing • Pediatric oncology Rationalize Low-margin, n
Slide 26: 360° NeoExperience Customer Experience
360° NeoExperience 26 Customer Experience Market Dynamics • World-class customer experience is yet to be defined • Neo has always gone above and beyond for clients, but expectations have changed • Turnaround time and ease of ordering are table stakes Ongoing Tactical Actions • Improve turnaround tim
Slide 27: Enhancing our RCM Approach Offers a Significant Opportunity
27 Revenue Cycle Management • Move billing review process up-front • Partner with providers to ensure prior authorizations are secured • Enhance online ordering functionality and ensure complete patient information at the time of requisition • Partner with third-party payers to improve molecular rei
Slide 28: Key Takeaways
28 Key Takeaways Revenue Cycle Management will enable significant bottom-line leverage New products and portfolio optimization offers meaningful upside potential Sales and commercial investment, analytics and execution will drive continuous and sustainable growth 1 2 3 We will differentiate through
Slide 29: Transitioning to an Integrated Operating Model
Transitioning to an Integrated Operating Model Melody Harris President, Enterprise Operations
Slide 30: Our Integrated End-to-End Approach
30 Our Integrated End-to-End Approach Procurement & Inventory Lab Operations Medical Services Operational Strategic Agility Technology & Digital Services Quality & Regulatory Facilities
Slide 31: 2023 Enterprise Operations Focus Areas
Digital Transformation 31 Talent Recruitment & Retention Workflow Optimization Laboratory Optimization 2023 Enterprise Operations Focus Areas
Slide 32: Laboratory Optimization: Delivering Operational Results
Laboratory Optimization 32 Delivering Operational Results • Improving redundancy • Reducing downtime Optimizing Footprint & Equipment • Improved NeoTYPE® NGS Turnaround Time by 46% • Improved other NGS Turnaround Time by 22% Driving High Performance in NGS for 1Q23 • Productivity increase in network
Slide 33: Automating the Lab of the Future
Laboratory Optimization 33 Automating the Lab of the Future We are automating our future to increase throughput, improve quality and safety, and drive operational leverage across the enterprise. Automated karyotyping • Reducing analysis time • Feeding network Automated liquid handling • Tracking wit
Slide 34: Driving Productivity Across the Neo Network
Laboratory Optimization 34 Driving Productivity Across the Neo Network Labs consolidated in 2023 • Nashville production lab • Singapore • Rolle, Switzerland UK NEO Production Labs With Modular Automation NEO Networked Analysis Lab HQ & New NEO Production Lab – Validating Automation
Slide 35: Working Smarter Through Analytics
35 Working Smarter Through Analytics Workflow Optimization Neo’s office of “operational strategic agility” Aligning staffing and capacity to meet customer demands Simplifying & standardizing all modalities across the network Integrating a Six Sigma team into ops to drive continuous improvement Drivi
Slide 36: Our People Are Our Assets
36 Our People Are Our Assets Talent Recruit • Candidates & certifications through MD Anderson, Mt San Antonio College, Florida Gulf Coast U, Keiser U • Market compensation analysis Grow & develop exceptional talent Develop • Lab ops employees continuing education through Neo U • In-house certificati
Slide 37: Digital Transformation
a | . Digital —\ Transformation q NEO GENOMICS. 37
Slide 38: Enabling Technology for the Lab of the Future
38 Enabling Technology for the Lab of the Future Digital Transformation Enterprise & Data Architecture Data & Analytics Wider Cloud Deployment Enhanced Customer Experience • End-to-end connectivity • Backbone for automation • Agnostic to data inputs • Foundation for future product • Common data defi
Slide 39: Big Data Will Drive Precision Oncology
39 Big Data Will Drive Precision Oncology Digital Transformation Components of the data-driven future Sample Collection & Storage High-Throughput Multiomic Assays AI & Machine Learning Precision Decision Support Neo Proprietary DatabaseBioBanking We are building the infrastructure that enables this
Slide 40: Artificial Intelligence: Oncology's Present & Future
40 Artificial Intelligence: Oncology’s Present & Future Digital Transformation Where the industry is evolving
Slide 41: Our Data Advantage
~540K Patients served annually 41 Our Data Advantage Big Data is the fuel for AI… and Neo has data! Patients served annually 1 Million Digital Transformation 100s of data points per patient 2028TODAY >100M clinical data points generated annually RaDaR® Makes Neo Data Longitudinal
Slide 42: The Neo Data Advantage
42 The Neo Data Advantage Digital Transformation Current Uses of Our Data • Enabling pharma R&D • Licensing for algorithm training through partnerships with tech Companies • Clinical trial matching • Realizing a competitive advantage by delivering results through our network Future Uses of Our Data
Slide 43: Key Takeaways
43 Key Takeaways We will continue to drive results in 2023 through: • Lab optimization • Workflow analysis & optimization • Talent recruitment & retention We are delivering strong results in improvements to turnaround time and productivity We have transitioned to a fully integrated operations model
Slide 44: Innovating for the Future
Innovating for the Future Vishal Sikri President, Advanced Diagnostics
Slide 45: Advanced Diagnostic Division
Therapy Selection (Solid Tumor & Heme) MRD/ Liquid Biopsy Pharma Services Informatics/ Data Strategy R&D Advanced Diagnostic Division 45 Clinical Programs Experienced leadership team CLINICAL PROGRAMS Clearly defined focus on execution of product roadmap focusing on innovative, next-generation produ
Slide 46: Market Leader in Leukemia NGS Testing
Market Leader in Leukemia NGS Testing1 NeoGenomics 2021 Test Volume Leukemia NGS Test Market Solid Tumor NGS Testing Market Share2,3 NeoGenomics Test Volume Solid Tumor NGS Market References: 1. https://seer.cancer.gov/statfacts/html/all.html 2. https://seer.cancer.gov/statfacts/html/leuks.html 3. h
Slide 47: Therapy Selection
Source: NHS, NSF, NIH, UN, WHO, primary market research, NEO internal estimates. 47 Superior Specs vs. Market Leader Largest DNA/RNA myeloid profile on market and largest internal pan-cancer, solid tumor profile Trusted Partner • >4,400 pathology & community oncology relationships • >600 cancer test
Slide 48: Roadmap to Further Increase Market Share
References: 1. Lab Economics. 2. Community Oncology Alliance statistics, 2022 ASCO Snapshot 48 NY state approval FDA approval Clinical decision support Expand Access Academic & for-profit oncology Pediatric oncology Private payors Increase Relationships Whole-exome sequencing (WES) Whole-transcripto
Slide 49: RaDaR: Strong Positioning in MRD Market
Source: NHS, NSF, NIH, UN, WHO, primary market research, NEO internal estimates. 49 Liquid Biopsy Exceptional Performance 10x higher sensitivity compared to other leading MRD tests Trusted Partner • Broad cancer testing menu • Established pathology customer base • Foothold in the community setting B
Slide 50: High Sensitivity Enables Detection of More Patients With Residual Disease
50LoD95 = limit of detection, working at a confidence of 95%; VAF = variant allele fraction. * The analytical validation study of RaDaR demonstrates a limit of detection (LoD95) of 0.001% variant allele fraction (VAF) with 100% specificity. Source: Stephens Industry Note; Mason Carrico, April 2022.
Slide 51: High Sensitivity Enables Detection of More Patients With Residual Disease
RaDaR (LoD 0.001%) 51 * Compared to other leading minimal residual disease (MRD) assays. High Sensitivity Enables Detection of More Patients With Residual Disease Liquid Biopsy Other MRD test (LoD 0.01%)Imaging
Slide 52: RaDaR as a Reliable Risk Stratification Tool: Breast
References: 1. Lipsyc-Sharf, et al. JCO 2022. 2. Lynce, et al. SABCS 2021. 3. Cutts et al. AACR 2021. RaDaR as a Reliable Risk Stratification Tool Across Tumor Types: Breast CHiRP: Monitoring for recurrence in ER+/HER2- breast cancer1 OXEL: MRD detection post surgery in triple-negative breast cancer
Slide 53: RaDaR Risk Stratification: Lung, Head and Neck, Bladder, Melanoma
References: 1. Gale, et al. Annals of Oncology, 2022 2. Flach, et al. ESMO 2022. 3. Van Dorp, et al. Nature Medicine 2022. 4. Genta, et al. ASCO 2022. LUCID: MRD detection post surgery in non-small cell lung cancer1 LIONESS: MRD detection post surgery in head and neck cancer2 NABUCCO: ctDNA detectio
Slide 54: RaDaR Detects More Patients With Residual Disease
* Compared to other leading minimal residual disease (MRD) assays. References: 1. Gale D, et al. Ann Oncol. 2022;33(5):500-510. 2. Flach S, et al. Br J Cancer. 2022;136:1186-1195. 3. Lynce P, et al. https://www.inivata.com/wp-content/uploads/2021/12/SABCS-OXEL-11.19.2021-Final.pdf. 54 RaDaR detects
Slide 55: RaDaR Median Lead Times for Relapse or Recurrence
*Compared to other leading minimal residual disease (MRD) assays. Excluding patients with brain metastases.. HNSCC = head and neck squamous cell carcinoma; HR = hormone receptor; NSCLC = non-small cell lung cancer. References: 1. Gale D, et al. Ann Oncol. 2022;33(5):500-510. 2. Flach S, et al. Br J
Slide 56: Building Clinical Evidence for RaDaR
56 Building clinical evidence for RaDaR 4 abstracts submitted 7+ publications across multiple cancer indications anticipated for 2023 Liquid Biopsy CHiRP Study Lipsyc-Sharf, et al. Journal of Clinical Oncology, 2022 Aim of the study To investigate the association of MRD with recurrence in a cohort o
Slide 57: RaDaR Commercialization and Coverage Roadmap
57 2023 2024 onward 3+ MolDx and private payor submissions BC MolDx application submitted late Q1, 2023 Additional individual and pan-cancer submissions RaDaR Commercialization 2023 Focus • Successful commercial launch Q1, 2023 • Direct clinical and pharma sales channel • Commercial initiatives in p
Slide 58: Pharma Services at NeoGenomics
58 Pharma Today • Focus selling on high margin/growth modalities • Focus on revenue generation • Increase volume with batched/retro samples • Discipline on pricing and competitive differentiation • Grow CDx opportunities • Consolidate international sites • Increase focus on Top 30 pharma The Past •
Slide 59: Rebalancing Pharma Portfolio
59 Rebalancing Pharma Portfolio Grew volume of retrospective/batched samples to ensure sample turnover in laboratory (trends to Phase I-II studies) • Vs. prospective studies and custom development (trends to Phase III and validation studies) • COVID-19 effect on new validations 2020-2021 resulted in
Slide 60: Returning to Double-Digit Growth
60 Returning to Double-Digit Growth Reasons to believe International Site Capabilities and Volume Channels High Margin & Growth Modalities Companion Dx & Launch Pipeline Strong Investments in R&D Translating Pharma VOC Batched/ Retrospective Samples Broad Menu & Capabilities Pharma
Slide 61: FDA Guidance on ctDNA Use in Drug Development
* FDA draft guidance for industry use of ctDNA for early-stage solid tumor drug development. May 2022. 61 Balance study arms – ensures proper assessment of therapeutic performance metrics in early-stage trials Use as potential surrogate endpoint – ctDNA can provide early indications of therapeutic e
Slide 62: An Integrated Portfolio Actualizing Precision Medicine
* 2021 Figures – https://www.pharmexec.com/view/2022-pharm-exec-top-50-companies. 62 An Integrated Portfolio Actualizing precision medicine Top 30 pharma yearly R&D spend: >$152.5B* NeoGenomics can support comprehensive biomarker testing, translational research, and diagnostic needs for pharma Pharm
Slide 63: Informatics: Path to Strong, Continued Growth
Note: data utilized by Informatics clients is de-identified and abides by appropriate data protection regulations. 63 Informatics: Path to Strong, Continued Growth 2023 2024 2025 2026 2027 2028 Accelerated growth from building blocks laid in 2023New clinical products with expanded data Data expansio
Slide 64: Informatics Growth Drivers
64 Growth Drivers Informatics Exclusive Source Expanding Existing Data Future Data Expansion Expanding Partnerships • Utilizing NLP and manual in-house abstraction to extract additional clinical history elements to expand types of projects we can support. • As clinical launches expanded comprehensiv
Slide 65: Advanced Diagnostics: Set-up for Success
R&D Develop innovative products for pharma and later clinical use Clinical Launch innovative next-generation products, validated with pharma, that add clinical value to patients, oncologists and pathologists Pharma Implement innovative technologies to feed clinical pipeline and capture VOC to suppor
Slide 66: Key Takeaways
New Neo Comprehensive and RaDaR launches are helping grow revenue and market share and are rapidly expanding Neo’s informatics portfolio 66 Key Takeaways Pharma services changes implemented in 2022 are showing improved profitability 1 2 3 RaDaR is a key differentiator for Neo, allowing for longer-te
Slide 67: Long-Term Financial Outlook
Long-Term Financial Outlook Jeff Sherman Chief Financial Officer
Slide 68: FY 2023 Expectations
KEY DRIVERS 68 Revenue $545–555 million AEBITDA ($27)–($22) million Cash Burn $50–60 million Clinical volume & revenue per test growth • NGS Revenue Growth • Revenue Cycle Initiatives Advanced Diagnostics • Legacy Pharma & Informatics revenue growth • RaDaR® growth Revenue & gross margin improvement
Slide 69: Operating Efficiencies & Investments 2023
• Sales force expansion • Lab optimization and automation • Houston expansion • Long-term capacity planning • Workforce investments • RaDaR CMS/MolDx approval and clinical trials • R&D & innovation • Technology investments Investments Cost savings included in 2023 guidance. 69 • $25MM in annualized
Slide 70: Reported Operating Metrics
70 • Clinical Service Revenue • Clinical Volumes • Revenue per test • Advanced Diagnostics Revenue • Includes the following not broken out separately: • Pharma Revenue (stopped reporting bookings in Q3 2022) • Informatics Revenue • RaDaR Revenue • Adjusted Gross Margin • Adjusted EBITDA Margin • Cap
Slide 71: 5-Year Financial Projection – Base Business
5-year Revenue & AEBITDA 71 • Annual Base Revenue growth 7-9%, including NGS growth of 20%+ per year • Base Business defined as current state including Pharma RaDaR Revenue, does not include guidance for RaDaR Clinical Revenue • Annual inflation at 3-4%, partially offset by automation and operating
Slide 72: Projected Liquidity Provides Financial Flexibility
Cash Burn $50-60M Cash Flow Positive 72 $438M Cash & Marketable Securities 2022 2023 2025 & Beyond $200M 2025 Convertible Note Maturity 2022 YE Cash Burn $89M* Projected Liquidity Provides Financial Flexibility To manage capital structure and to continue to invest for growth * Cash burn of $89M excl
Slide 73: Key Takeaways
73 Key Takeaways Strategic investments to fuel innovation and future growth Operating efficiencies driving improved profitability Improving financial trends from 2022 expected to continue in 2023 and beyond 1 2 3 Clinical RaDaR growth drives incremental Revenue, Adj. Gross Margin, and AEBITDA4 Reven
Slide 74: Appendix
Appendix 74
Slide 75: 2023 Guidance Non-GAAP Reconciliation
Year Ended December 31, 2023 Low Range High Range Net loss (GAAP) $ (116,000) $ (107,000) Amortization of intangibles 34,000 34,000 Non-cash stock-based compensation 28,000 27,000 Restructuring charges 5,000 5,000 Adjusted net loss (non-GAAP) (49,000) (41,000) Interest and taxes (14,000) (16,000) De
Slide 76: One Lab. Vital Answers.
One Lab. Vital Answers. Transforming Care for Cancer Patients.
Slide 77: A Clinician's Perspective on the Role of MRD in Clinical Practice
A Clinician’s Perspective on the Role of MRD in Clinical Practice Dr. Peter Beitsch Dallas Surgical Group
Slide 78: Q & A
Q & A 78
Slide 79: One Lab. Vital Answers.
One Lab. Vital Answers. Transforming Care for Cancer Patients.