NGNM Company Overview Presentation
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NeoGenomics is a pure play cancer genetics laboratory that provides diagnostic testing services to oncologists, pathologists, and hospitals throughout the US. The company utilizes advanced technologies like cytogenetics, flow cytometry, FISH, and molecular testing to analyze cancer samples. Key growth drivers include the aging US population which is increasing cancer incidence, and frequent discoveries linking new genes to cancer. NeoGenomics aims to accelerate its revenue growth and increase operating leverage through expanding its sales team, test offerings, and geographic reach.
NGNM Company Overview Presentation
- 1. NeoGenomics, Inc OTCBB: NGNM Time Matters. Results Count Company Overview Presentation October 2011
- 2. 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 “may”, “would”, “could”, “will”, “expect”, “estimate”, “anticipate”, “believe”, “intend”, “plan”, “goal”, and similar expressions and variations thereof are intended to specifically identify forward-looking statements. All statements that are not statements of historical fact are forward-looking statements. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. The risks that might cause such differences are identified in our filings with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise the forward looking statements made in this presentation to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events.
- 3. NeoGenomics Laboratories • Pure play cancer genetics laboratory testing • Servicing: Oncologists, Pathologists and Hospitals throughout the U.S. • Competitive through innovative products, advanced technologies and outstanding service • Rapidly growing Industry with tremendous market opportunity • Accelerating revenue with increasing operating leverage • 30% year over year revenue growth in Q3 11 • 40% of incremental $2.6 MM in revenue driven to bottom line in Q3
- 4. NeoGenomics’ Mission To improve patient care through exceptional cancer genetic diagnostic services.
- 5. Management Team • Douglas VanOort, Chairman & CEO Operating Partner, Summer Street Capital Partners; Chief Operating Officer, Quest Diagnostics, Inc. • Robert Gasparini, Director & Chief Scientific Officer Director of Genetics, U.S. Labs; Worldwide Marketing Mgr, Ventana Medical Systems Asst. Director, Prenatal Diagnostic Center (Harvard) • Steven Jones, Director & EVP - Finance Chairman, Aspen Capital Group; Managing Member, Medical Venture Partners Vice President, Merrill Lynch Investment Banking • George Cardoza, Chief Financial Officer CFO, Protocol Global Solutions Controller, Central Region, Quest Diagnostics • Robert Horel, Vice President, Sales & Marketing Regional Manager, US Labs; Product Specialist, Ventana Medical Systems; Pilot, United States Navy
- 6. Cancer Genetics Lab Testing (1) • $5-6 billion market opportunity: “Personalized Medicine” • Highest growth segment of lab Industry • Approx. 360 Genetic Labs in the U.S. • 2/3 affiliated with academic institutions • Approx. 60 Commercial Labs perform 80% of testing • 15-20 national/regional labs • 12 other publicly-traded players • High pace of industry consolidation (1) Source: Washington G2 Reports
- 7. A Growing Landscape VT WA ME MT ND MI MN NH OR NY MA ID SD WI RI WY MI PA CT IA NJ NE OH DE IL IN NV MD WV UT VA CO KS MO CA KY NC TN Facility OK AR SC 7k sq.ft. AZ NM AL GA MS LA TX CA Facility FL 18k sq.ft. States sending specimens in 2010 FL Facility 31k sq.ft.
- 8. Advanced Technologies Cytogenetics: chromosome analysis “Neighborhood view from 1000 feet” Flow Cytometry: cell surface marker analysis “Single House view from 500 feet” FISH: gene analysis “Door and Window view” Molecular testing: DNA sequence analysis “View of serial number on door lock”
- 9. Key Customers Pathologists and Hospital Path Groups: “Tech only” • Enable community pathologists to compete with Large lab competitors • Rapid Turnaround Time and Web based reporting • Innovative technical component-only services – Flow, FISH, IHC Oncologists and Clinician Groups: “Full Service” • Specialized high level of service and outstanding quality • Genetic Pathology Solutions™ (GPS) reporting – all relevant case data on one page report
- 10. Key Growth Drivers Industry • Favorable demographics • Increasing incidence of cancer as baby boomers age • Frequent discoveries of new genes linked to cancer Company Specific • Flexible and powerful business model • Solid pipeline of new diagnostic test offerings • Expansion of sales team and geographic reach
- 11. Increasing Sales Force Productivity 77% of all Cancers Diagnosed are in People Age 55 or Older, the Fastest Growing Segment of the US Population (American Cancer Society) 30.0% 25.0% 25.0% 20.2% 20.0% 15.0% 10.0% 5.6% 5.0% 3.2% 1.4% 0.0% Under 55 55 to 64 65 to 74 75 to 84 85 and older Percent Change in U.S. Population by Age: 2000 to 2005 (Source: U.S. Census Bureau)
- 12. Diagnostic Services and Cancer Markets 2011 New Male Cancer Cases 2011 New Female Cancer Cases Prostate 240,890 (25%) Breast 230,480 (26%) Lung & bronchus 115,060 (15%) Lung & bronchus 106,070 (14%) Colon & rectum 71,850 10%) Colon & rectum 69,360 (10%) Urinary bladder 52,070 (7%) Uterine corpus 46,470 (6%) Lymphoma 40,880 (5%) Thyroid 36,550 (4%) Melanoma (Invasive) 40,010 (5%) Lyphoma 34,310 (4%) Kidney & renal pelvis 37,120 (4%) Melanoma (Invasive) 30,220 (4%) Oral cavity & pharynx 27,710 (3%) Ovary 21,990 (3%) Leukemia 25,320 (3%) Kidney & renal pelvis 23,800 (3%) Pancreas 22,050 (3%) Leukemia 19,280 (3%) All sites 822,300 (100%) All sites 774,370 (100%) Total New Cases Estimated in 2011: 1,596,670 * Source: American Cancer Society, Cancer Facts 2011.
- 13. New Diagnostic Tests Strategic Supply Agreement with Abbott Laboratories • Allows NeoGenomics to develop and launch up to 3 Laboratory Developed Tests (“LDTs”) using Abbott IP • MelanoSITE - FISH-based test targeted at difficult to diagnose Melanoma cases was first • Launched in Q1 2010 • 84% Sensitivity and 98% Specificity • 10 year agreement with two, 2 year renewals • Transitions to FDA if Abbott obtains FDA approval • Two additional LDTs for other cancers • Test #2 targeted for Q4 2011 launch
- 14. Volume and Price Growth 22,000 $700 661 659 652 624 613 19,977 20,000 606 603 602 610 603 600 587 569 18,358 $600 552 567 18,000 534 523 522 572 570 493 504 509 479 484 16,000 449 15,396 $500 14,464 14,349 440 14,477 14,042 14,000 12,714 $400 12,000 11,316 11,188 10,457 10,000 9,490 8,383 $300 8,056 8,000 6,909 6,666 6,000 5,654 $200 4,482 4,196 4,000 3,475 3,377 2,664 3,309 $100 1,569 2,000 768 1,271 467 0 $0 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Tests Completed Average Revenue/Test
- 15. Quarterly Revenue $ 12,000 11,320 $ 11,000 10,466 $ 10,000 8,804 $ 9,000 8,708 8,755 8,418 8,490 7,799 7,297 $ 8,000 7,459 6,914 $ 7,000 5,920 $ 6,000 5,057 4,881 $ 5,000 4,163 3,795 $ 4,000 3,123 $ 3,000 2,344 2,243 1,763 1,602 $ 2,000 1,767 1,344 $ 1,000 559 751 230 345 $0 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Quarterly Revenue ($, 000's)
- 16. Historical Financial Information ($, 000's) 2007 2008 2009 2010 Total Revenue $ 11,505 $ 20,015 $ 29,469 $ 34,371 % Growth 78.0% 74.0% 47.2% 16.6% % Growth Adjusted * 70.0% 25.4% Gross Margin % 52.0% 53.3% 51.6% 45.9% Sales & Marketing as a % of Rev 20.5% 16.8% 23.4% 21.8% General & Admin as a % of Rev 58.8% 40.9% 34.1% 32.8% Total SG&A as a % of Rev 79.3% 57.7% 57.5% 54.5% Net Income/(Loss) $ (3,380) $ (1,383) $ (2,243) $ (3,303) Diluted EPS ($0.11) ($0.04) ($0.06) ($0.09) Adjusted EBITDA $ (1,017) $ 809 $ (103) $ (566) Summary Testing Metrics % Growth in Tests Performed 63.7% 55.7% 39.7% 25.5% % Growth - Adjusted* 57.0% 36.1% * Excludes impacts from insourcing by one large acount (i.e., growth from all other customers).
- 17. Quarterly Financial Information ($, 000's) Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Total Revenue $ 8,708 $ 8,755 $ 8,805 $ 10,466 $ 11,320 % Growth (YoY) 19.3% 12.3% 4.6% 23.3% 30.0% % Growth (YoY) - Adjusted* 23.9% 17.0% 11.4% 25.0% 32.0% Gross Margin 44.7% 44.6% 43.9% 44.5% 44.8% Sales & Marketing as a % of Rev 22.8% 20.4% 19.9% 16.1% 15.2% General & Admin as a % of Rev 33.5% 30.6% 32.1% 29.5% 29.2% SG&A Expenses 4,902 4,467 4,576 4,770 5,032 Total SG&A as a % of Rev 56.3% 51.0% 52.0% 45.6% 44.5% Net Income/(Loss) $ (1,198) $ (377) $ (893) $ (293) $ (143) Diluted EPS ($0.03) ($0.01) ($0.02) ($0.01) ($0.00) Adjusted EBITDA $ (399) $ (97) $ 29 $ 483 $ 693 Summary Operating Data % Growth in Tests Performed (YoY) 29.4% 12.9% 9.6% 26.9% 38.0% % Growth (YoY) - Adjusted* 36.8% 19.5% 18.6% 32.0% 40.6% * Excludes impacts from insourcing by one large acount and other non-recurring revenue/tests.
- 18. Key Financial Information Recent Share Price (10/18/2011): $ 1.15 Basic Shares Outstanding: 42.8 M Current Market Cap: $49.6 M Treasury Stock Diluted Shares: ~45.0 M Fully Diluted Shares: 50.7 M Public Float Shares: 35.0 M 52 Week High/Low: $0.96/$1.67 Avg. Daily Trading Volume (3 Mos): 17,788
- 20. NeoGenomics • Emerging leader in the fastest growing segment of the lab testing industry • Strong competitive advantages and new product portfolio • Strong Management Team with directly relevant industry experience • Accelerating profitability through revenue growth and increased operating leverage • Q4 2011 guidance of $11.4 - $12.0 MM of revenue with $0.00 - $0.01 per share of net income