NEW YORK – NeoGenomics today reported a 50 percent year-over-year uptick in its second quarter revenues with strong growth in both its clinical services and pharma services businesses.
For the three months ended June 30, total revenues reached $101.7 million, up from $67.7 million in Q2 2018, and beating analysts' average estimate of $97.3 million.
On a conference call, NeoGenomics CFO Sharon Virag said that revenue growth was driven by the Genoptix acquisition from last year, as well as continued market share gain. Organically, revenues grew 20 percent.
Clinical services revenues grew 50 percent to $89.0 million from $59.5 million a year ago, while pharma services revenues rose 55 percent to $12.7 million from $8.2 million.
In NeoGenomics' clinical operations, the number of requisitions received grew 32 percent to 144,983 in the recently completed quarter from 109,986 a year ago. The number of tests performed grew 34 percent to 250,330 from 187,189, and the average revenue per test increased to $355 from $318, a 12 percent jump.
On the call company Chairman and CEO Douglas VanOort noted that growth occurred across all testing platforms. Additionally, the number of Phase II and III trials being placed with the firm are on the rise, he added, and the company recently opened a lab in Singapore and is working on plans for a lab in China in 2020.
He also highlighted NeoGenomics' companion diagnostics work with pharma partners, saying the firm is involved in about 30 CDx projects currently with more in the works. The company has "several companion diagnostic test launches in our pipeline," he noted. "These tests have the potential to further fuel our revenue growth as we expect the pace of companion diagnostic activity to increase meaningfully over the next couple of years."
VanOort also noted that NeoGenomics continues to build out its next-generation sequencing capabilities. NGS, he said, is growing faster than the firm's other testing modalities, and the company is hiring across a wide range of personnel — including scientists, physicians, and laboratorians — to increase its capacity.
NeoGenomics is also changing its laboratory process to be compliant with US Food and Drug Administration regulations, as well as investing in instrumentation. "We're probably going to come out relatively soon with an expanded gene list for both our [hematology] and solid tumor panels," followed by a liquid biopsy offering "at some point in the not-too-distant future," he said.
The new company headquarters being built in Fort Myers, Florida will also incorporate a molecular and NGS lab to accommodate growth, VanOort said.
On the Genoptix integration, he said that revenue contribution is "almost exactly" as the company expected, and work is being done to replicate the Genoptix customer experience "as we migrate them to the NeoGenomics platform."
In Q2 2019 the company's R&D spending rose 136 percent to $2.6 million in Q2 2019 from $1.1 million in Q2 2018, while its SG&A costs increased 46 percent to $41.9 million from $28.7 million. Virag said that R&D spending rose due to investments in new test development and FDA initiatives, while SG&A costs grew as a result of the Genoptix acquisition.
NeoGenomics posted a profit attributable to its common shareholders of $2.0 million, or $.02 per share, during Q2 2019 compared to a profit of $5.9 million, or $.07 per share, a year ago. Adjusted EPS for the quarter was $.07 per share and beat the consensus Wall Street estimate of $.06.
NeoGenomics exited the quarter with $167.4 million in cash and cash equivalents.
For full-year 2019, the firm has revised its revenue guidance to a new range of between $388 million to $402 million from a previous range of $384 million to $400 million. On a per share basis, the company anticipates a loss of $.01 to a gain of $.03. Adjusted EPS is projected to be in the range of $.23 to $.27.
In early morning trading on the Nasdaq, NeoGenomics' shares slid about 7 percent to $22.72.