Neogenomics, Inc. · NASDAQ:NEO
Neogenomics — Investor Presentation (November 2018)
32 slides from Neogenomics's investor presentation, Nov 7, 2018
Slide 1: Investor Presentation November 2018
Exhibit 99.1 INVESTOR PRESENTATION NOVEMBER 2018
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: Investment Highlights
Investment Highlights Leading publicly-traded, comprehensive, pure-play oncology testing company in the U.S. Substantial Oncology/Genetics Market tailwinds Significant near-term growth drivers Market share gains driven by customer satisfaction Rapidly growing Pharma Services business Tra
Slide 4: Who We Are
Who We Are COMMON PURPOSE We saves 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 W
Slide 5: Company Overview
Company Overview Comprehensive, oncology-focused test menu • Extensive molecular-oncology offering, with ~160 tests • A leader in immuno-oncology testing • In-house digital pathology expertise Extensive clinical expertise • 60+ pathologists and PhDs Global Pharma Services offering • $97 million back
Slide 6: 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) 6
Slide 7: 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 8: 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 9: Leading Molecular Offering
Leading Molecular Offering Broad Menu Market Leading Results • 157 different tests • $50M clinical revenue run rate • More than 30 multi-gene tumor tests • 25%+ volume growth • TMB, MSI, other immuno-oncology assays WGS, WES, RNA-SEQ, NeoAg Targeted genomic/RNA seq. & 1000’s Cancer Panels 100’s Illu
Slide 10: Our Pharma Services Offering
Our Pharma Services Offering FDA Filing, Pre-Clinical Research & Phase Phase Phase Approval & Launch Discovery I II III Preparation Biomarker Discovery Analytical Validation Dx Development Clinical Validation Assay Design & Development Rx Development Track Dx Development Track Pharma Services Divisi
Slide 11: Net Promoter Score
Net Promoter Score Overview: • Survey Opened June 4th • Survey Closed June 30th • 8 Questions + Comments • 903 Responded to the Survey • 655 Optional Comments received Distribution of Client Ratings - Q2 2018 450 393 400 Highest NPS 350 recorded for 300 NeoGenomics! 250 214 200 170 # Ratings # 150 1
Slide 12: Track Record of Growth – Clinical Services
Track Record of Growth – Clinical Services **Clinical Genetic Testing Annual Revenue Clinical Genetic Tests Performed ($, MMs) 657,394 $210 563,132 $203 $182 221,191 $79 $63 175,688 $56 135,580 $40 $32 112,434 75,576 $27 56,710 $18 44,924 $6 $10 20,998 31,868 4,082 12,838 $0.6 $2 1,152 2004 2005 200
Slide 13: Track Record of Growth - Pharma Services
Track Record of Growth - Pharma Services $MMs $120.0 75% YoY Backlog Growth $100.0 97.2 89.6 $80.0 71.7 68.7 $60.0 55.4 $40.0 26.4 21.2 21% YoY 16.7 19.3 $20.0 13.8 Revenue 9.6 7.9 8.0 6.5 8.2 Growth $0.0 Q3'17 Q4'17 Q1'18 (4.2) Q2'18 (0.3) Q3'18 (2.1) -$20.0 Revenue Booked (net) Change in Dormant P
Slide 14: 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 $150 2010 2011 2012 2013 2014 2015 2016 2017 Average Cost of Good Sold / Clinical Genetic Test 14
Slide 15: 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.) 15
Slide 16: Significant Near-Term Growth Drivers
Significant Near-Term Growth Drivers 6 Close and 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 16
Slide 17: 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 17
Slide 18: 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 19: 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 40 person oncologist-focused sales opportunity force (5x larger than NeoGenomics’ current oncology team) >2,000 independent, Customized reports specifical
Slide 20: 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 21: 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 22: Genoptix Bends the Curve
Genoptix Bends the Curve Potential Revenue $500 • Incremental revenue of ~$85M • Pro form combined revenue of ~$350M $400 • ~$25 million of cost synergies • ~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 e
Slide 23: 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 24: Appendix
Appendix {NEO
Slide 25: Balance Sheet, September 30, 2018
Balance Sheet, September 30, 2018 (unaudited, in thousands) September 30, December 31, 2017 ASSETS 2018 (Restated) Cash and cash equivalents $ 118,440 $ 12,821 Accounts receivable 62,694 60,427 Inventory 6,829 7,474 Other current assets 6,307 5,153 Total current assets 194,270 85,875 Property and eq
Slide 26: Income Statement, September 30, 2018
Income Statement, September 30, 2018 (unaudited, in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2017 2017 2018 (Restated) 2018 (Restated) Net Revenue: Clinical testing $ 59,449 $ 51,187 $ 175,960 $ 159,642 Pharma Services 9,647 7,950 24,306 19,188 Total Revenue 69,096
Slide 27: Statements of Cash Flows, September 30, 2018
Statements of Cash Flows, September 30, 2018 (unaudited, in thousands) Nine Months Ended September 30, CASH FLOWS FROM OPERATING ACTIVITIES 2018 2017 (Restated) Net income (loss) $ 2,287 $ (4,944) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 1
Slide 28: Segment Results, September 30, 2018
Segment Results, September 30, 2018 (unaudited, in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2017 2017 Pharma Operations: 2018 (Restated) % Change 2018 (Restated) % Change Pharma Revenue $ 9,647 $ 7,950 21.4 % $ 24,306 $ 19,188 26.7 % Cost of Revenue $ 5,266 $ 4,092
Slide 29: Adjusted EBITDA, September 30, 2018
Adjusted EBITDA, September 30, 2018 (unaudited, in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2017 2017 2018 (Restated) 2018 (Restated) Net Income (Loss) (GAAP) $ 2,023 $ (4,264) $ 2,287 $ (4,944) Adjustments to Net Income (Loss): Interest expense, net 1,873 1,398 4,
Slide 30: 2018 Guidance
2018 Guidance (unaudited, in thousands) For the Year Ended December 31, 2018 Low Range High Range Net income attributable to common stockholders (GAAP) $ 4,000 $ 5,000 Amortization of intangibles 4,500 4,500 Non-cash, stock-based compensation (4) 6,000 7,000 Acquisition related transaction expenses
Slide 31: Quarterly Impact of ASU Adoption
Quarterly Impact of ASU 606 Adoption (unaudited, in thousands) As Previously Reported Q1 2017 Q2 2017 Q3 2017 Q4 2017 Total 2017 Net Revenue Clinical Testing $ 56,690 $ 59,791 $ 56,186 $ 59,079 $ 231,748 Pharma Services 4,986 6,299 6,866 8,713 26,863 Total Revenue 61,676 66,090 63,052 67,792 258,611
Slide 32: (NEO
(NEO GENOMICS