NEW YORK (GenomeWeb) – NeoGenomics today reported a 10 percent year-over-year growth in revenues for the first quarter of 2018, fueled by growth in clinical genetic testing volume.
NeoGenomics revenues for the quarter ended March 31 were $63.4 million, up from $57.4 million in the same quarter last year, beating the analysts' average estimate of $61.2 million. After adjusting for the sale of Pathlogic, which was divested last August, total revenues grew 14 percent year over year, NeoGenomics Chief Financial Officer Sharon Virag said on a conference call after the release of the results.
Revenue growth received a boost from a 15 percent increase in clinical testing volume in the quarter to 178,794 in Q1 2018 from 155,567 in Q1 2017, the firm said. Virag added that molecular testing grew more than 30 percent year over year, and both flow cytometry and fluorescent in situ hybridization, or FISH, sales rose in the double digits. Average revenue per clinical genetic test declined by 3 percent to $319, primarily due to changes in Medicare reimbursement and regulation.
Company Chairman and CEO Douglas Van Oort said the company also saw record cash collections in the quarter.
'We were particularly pleased with our record level of cash collections, in spite of challenges caused by regulatory changes. Cash flow from operations increased to a record $14 million," he said on the conference call.
In the company's clinical testing division, revenues rose 8 percent to $57.0 million from $52.9 million in the same quarter last year. Revenues in the smaller pharma services division rose 44 percent to $6.5 million from $4.5 million a year earlier.
The company posted a net loss attributable to common shareholders of $2.4 million, or $.03 per share, down from a net loss attributable to common shareholders of $3.7 million, or $.05 per share, in the same period last year. On an adjusted basis, EPS was $.04, short of the consensus Wall Street estimate of $.03.
The company has grown by 11 new employees to a total of 1,023 employees from 1,012 at the end of the first quarter of 2017, according to Virag. The new employees were primarily laboratory personnel to deal with increased testing volume, as well as billing personnel to manage new complexities to billing caused by changes in regulations.
In addition, the company expects long-term grow in oncology testing and is adding capacity to accommodate projected future needs, VanOort said.
"We believe the markets for oncology testing are growing both due to demographic changes and to rapid advances in science and medicine," he said.
The company plans to open a small lab next month in Atlanta to provide rapid turnaround flow cytometry services to clients in that area, according to VanOort.
The company is also nearing the completion of a "new significantly expanded lab" in Houston. The Houston lab will have capabilities for next-generation sequencing and other molecular testing, flow cytometry, and immunohistochemistry testing. The lab is primarily intended to serve the company's pharma services division but it will support the clinical services division as well, he said.
Since the beginning of the year, NeoGenomics has introduced nine new or enhanced oncology tests, VanOort said.
The company spent $956,000 on R&D in the quarter, a rise of 11 percent from $862,000 in the first quarter of 2017. The company's SG&A expenses increased to $23.8 million, up 5 percent year over year from $22.7 million a year ago.
NeoGenomics reported cash and cash equivalents of $15.2 million at the end of the quarter.
The company maintained its full-year 2018 guidance initially issued in February and said that revenue is expected in the range of $260 million to $272 million. Net loss per share is anticipated to be in the range of $.13 to $.08. Adjusted EPS is expected to be between $.15 and $.20.
The company's shares were up 3 percent on the Nasdaq to $9.90 in morning trading.