Neogenomics, Inc. · NASDAQ:NEO
Neogenomics — Investor Presentation (May 2018)
35 slides from Neogenomics's investor presentation, May 25, 2018
Slide 1: NeoGenomics Investor Presentation May 2018
Exhibit 99.1 NeoGenomics Investor Presentation May 2018
Slide 2: Disclaimer and 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 any securities in any stat
Slide 3: Investment Highlights
Investment Highlights A leading pure‐play oncology testing company Significant Market Growth Tailwinds Extensive molecular/oncology test menu A leader in immuno‐oncology testing Market share gains driven by Customer Satisfaction Rapidly growing Pharma Services business Track record of
Slide 4: Company Overview
Company Overview • A leading provider of somatic cancer testing • Large, comprehensive, multi‐modality test menu with more than 600 unique assays • A leader in all core disciplines: IHC, FISH, Flow Cytometry, Cytogenetics and Molecular • Serving hospitals/cancer centers, pathologists and oncologists
Slide 5: Tailwind: Demographics
Tailwind: Demographics Aging Population Incidence of Cancer by Age 120.0 25.4% 24.1% 100.0 80.0 19.6% 60.0 14.1% 40.0 7.8% U.S. population in millions millions in population U.S. 5.2% 20.0 2.7% 1.0% 0.0 < 20 20-34 35-44 45-54 55-64 65-74 74-84 > 84 Age 60-64 Age 65-74 Age 75-84 Age 85+ Source: Unite
Slide 6: Tailwind: Proliferation of Therapeutic Options
Tailwind: Proliferation of Therapeutic Options Number of Treatment Options for Selected Tumors 2016 vs. 2006 CLL 4 3 1 Prostate 1 912 2016 Lung 1 4 3 8 3 Breast 414 9 1 CLL 2 2 Prostate 6 1 2006 Lung 2 7 Breast 1 4 7 Her 2 CDK EGFR Anti‐CD Hormonals Others ALK Chemotherapy Immonotherapy BRAF OtherSm
Slide 7: Tailwind: Increasingly Complex Rx Paradigm
Tailwind: Increasingly Complex Rx Paradigm 7
Slide 8: Tailwind: Burgeoning Oncology Pipeline
Tailwind: Burgeoning Oncology Pipeline 160 140 120 100 80 60 40 20 Source: Analyst reports; Cowen Group; EvaluatePharma® 2015 8
Slide 9: Our Competitive Advantage
Our Competitive Advantage • Comprehensive, multi‐modality “one‐stop‐shop” • Large and advanced somatic cancer test menu • National footprint and extensive payer contracts • Outstanding client service and partnership models • Leader in test development immuno‐oncology • Synergistic Pharma and Clinica
Slide 10: Multi-modality One-stop-shop
Multi‐modality One‐stop‐shop Complementary and Comprehensive Anatomic Flow Cytometry Cytogenetics FISH Molecular Pathology • Robust Library of • Sanger Sequencing • Extensive • Consultation Pathology • State‐of‐Art Validated Probes • Next‐Gen Sequencing automation for High • Immunohistochemistry tec
Slide 11: Large and Advanced Offering
Large and Advanced Offering 2017 Locations: • Opening of first international laboratory in Rolle, Switzerland Papers Published: • Wild‐type Blocking PCR Combined with Direct Sequencing as a 2016 Highly Sensitive Method for Detection of Low‐Frequency Somatic Mutations. J Vis Exp. 2017 Mar. • Prevalen
Slide 12: Leading Molecular Offering
Leading Molecular Offering Broad Menu Market Leading Results • 157 different tests • $50M clinical revenue run rate • More than 30 multi‐gene tumor tests • 30%+ volume growth • TMB, MSI, other immuno‐oncology assays WGS, WES, RNA‐SEQ, NeoAg Targeted genomic/RNA seq. & 1000’s Cancer Panels 100’s Illu
Slide 13: National Footprint
National Footprint Dots reflect individual customers; colors reflect sales territories 13
Slide 14: Innovative Client Partnership Models
Innovative Client Partnership Models “Tech‐Only” Option Lab Collaboration Initiative NeoGenomics Provides technical service and bills for technical component of testing NeoGenomics Oncology Provides Flow Practice Cytometry Performs rapid Pathologist Technology TAT Flow Transfer Provides Medical inte
Slide 15: Pharma Services Offering
Pharma Services Offering Pharma Services Division Specialist Services Pharma Services Technologies • Bioinformatics • Proof of concept • IHC (qual and quant) • Pharma Data Services • Development & optimization • Flow cytometry • Medical/Scientific • Assay validations • FISH & RNA‐ISH consultation •
Slide 16: PD-L1: a Companion Dx and Immuno-Oncology Success Story
PD‐L1: a Companion Dx and Immuno‐Oncology Success Story Keytruda Case Study • Participated in Early Validation Program • Selected due to IHC expertise • Now, a leading provider of clinical PD‐L1 testing 16
Slide 17: Proven Management Team
Proven Management Team Position NEO Experience Industry Experience Douglas VanOort Chairman & Chief Executive Officer 9 years 36 years Robert Shovlin President of Clinical Services Division 3 years 21 years George Cardoza President of Pharma Services Division 8 years 23 years Sharon Virag Chief Fina
Slide 18: NEO's Proven Track Record of Consistent Growth
NEO’s Proven Track Record of Consistent Growth **Clinical Genetic Testing Annual Revenue Clinical Genetic Tests Performed ($, 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
Slide 19: Improvements in Cost per Test
Improvements in Cost per Test $350 $328 $325 $318 $300 $294 $275 $256 $250 $243 $225 $221 $201 $200 $179 $175 $150 2010 2011 2012 2013 2014 2015 2016 2017 Average Cost of Good Sold / Clinical Genetic Test 19
Slide 20: Productivity Gains Drive Margin Expansion
Productivity Gains Drive Margin Expansion 55% 113.4% 120% 110% 100% 90% 50% 80% 70% 60% 46.1% 50% 45.2% 40% 44.7% 45% 44.2% 43.8% 30% 20% **Gross Margin 41.2% 41.0% 10% 40.5% 0% 40% -10% -20% -30% -42.8% Cumulative Change in Avg Rev/Test & Productivity -40% 35% -50% 2010 2011 2012 2013 2014 2015 201
Slide 21: Pharma Services Revenue and Backlog
Pharma Services Revenue and Backlog ($, MMs) $80.0 91% YoY $73.1 Backlog $70.1 Growth $70.0 $60.0 $56.2 $50.0 $46.7 $40.0 $38.2 $30.0 $21.2 $20.0 $16.7 $15.2 $14.5 $13.7 44% YoY $10.0 $6.7 $7.2 $7.3 $6.5 Revenue $4.5 Growth $‐ Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Revenue Bookings, net Backlog 2017 res
Slide 22: Growth Goals
Growth Goals • Mid‐teens organic clinical volume growth • 20%+ organic Pharma revenue growth • 25‐35% incremental Adj. EBITDA on revenue growth Driven by: − Comprehensive test menu – “One‐Stop Shop” − Innovation in test development − Demographics and medical advances − Increased efficiencies 22
Slide 23: Opportunities by Customer Type
Opportunities by Customer Type Pathologists & Hospitals • Large Market with > 5,500 Hospitals in U.S., and 18,000 active Pathologists in US1 • Enable Pathologists to practice using sophisticated tools/tests and “tech‐only” services • Unique ability to be “One‐stop shop” with comprehensive oncology t
Slide 24: Near-term Growth Drivers
Near‐term Growth Drivers • Opened a new lab in Geneva to handle European trials • Opening new lab in Houston to serve pharma and local clinical customers • Opening a new flow cytometry lab in Atlanta, GA • Added several large new commercial payor contracts • Added several large new GPO relationships
Slide 25: 2018 Guidance
2018 Guidance* • Net Loss to common stockholders ($10.9)–(6.9) MM • Revenue $260 – 272 MM • Adjusted EBITDA* $39 ‐ 43 MM • Adjusted Net Income* $14 ‐ 18 MM • Adjusted Diluted EPS* $0.15 ‐ 0.20 * See Appendix for definitions of Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted EPS as well as
Slide 26: 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 prof
Slide 27: Appendix
QNEO Appendix
Slide 28: Balance Sheet, March 2018
Balance Sheet, March 31 2018 (unaudited, in thousands) December 31, 2017 ASSETS March 31, 2018 (Restated) Cash and cash equivalents $ 15,173 $ 12,821 Accounts receivable 58,129 60,427 Inventory 7,515 7,474 Other current assets 6,954 5,153 Total current assets 87,771 85,875 Property and equipment (ne
Slide 29: Income Statement, March 2018
Income Statement, March 31 2018 (unaudited, in thousands) For the Three Months Ended March 31, 2018 2017(Restated) Net Revenue: Clinical testing $ 56,971 $ 52,907 Pharma Services 6,452 4,521 Total Revenue 63,423 57,428 COST OF REVENUE 36,120 34,480 GROSS PROFIT 27,303 22,948 Operating expenses: Gene
Slide 30: Statements of Cash Flows, March 2018
Statements of Cash Flows, March 31 2018 (unaudited, in thousands) Three Months Ended March 31, CASH FLOWS FROM OPERATING ACTIVITIES 2018 2017 (Restated) Net income (loss) $ 644 $ (1,165) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 3,633 3,979
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: Reconciliation of GAAP to Adjusted Non-GAAP
Reconciliation of GAAP to Adjusted Non‐GAAP Non‐GAAP Adjusted EBITDA "Adjusted EBITDA" is defined by NeoGenomics as net income from continuing operations before: (i) interest expense, (ii) tax expense, (iii) depreciation and amortization expense, non‐cash stock‐based compensation expense, and if app
Slide 33: Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA
Reconciliation of GAAP Net Income to Non‐ GAAP EBITDA and Adjusted EBITDA (unaudited, in thousands) For the Three-Months Ended March 31, 2017 2018 (Restated) Net Income (Loss) (GAAP) $ 644 $ (1,165) Adjustments to Net Income (Loss): Interest expense, net 1,486 1,364 Income tax expense (benefit) 438
Slide 34: Reconciliation of GAAP Net Income and EPS to Adjusted
Reconciliation of GAAP Net Income and EPS to Non‐GAAP Adjusted Net Income and EPS (unaudited, in thousands except per share amounts) For the Three Months Ended March 31, 2018 2017 (Restated) Net (Loss) attributable to common stockholders (GAAP) $ (2,212) $ (3,731) Adjustments to Net Loss: Amortizati
Slide 35: 2018 Guidance
2018 Guidance (unaudited, in thousands except per share amounts) The following table reconciles our 2018 outlook for Net Income, EBITDA and EPS to the corresponding non-GAAP measures of Adjusted Net Income, Adjusted EBITDA and Adjusted Diluted EPS: For the Year Ended December 31 , 2018 Low Range Hig