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NeoGenomics’ Q4 Revenues Rise 23 Percent on Growing Test Volume

NEW YORK (GenomeWeb News) – Cancer genetics testing firm NeoGenomics today reported a 23 percent increase in revenues for the fourth quarter year over year.

For the three months ended Dec. 31, 2013, Ft. Meyers, Fla.-based NeoGenomics posted revenues of $18.3 million, compared to $14.9 million a year ago. Test volume was up 28 percent during the quarter, while average revenue per test slid 4 percent, NeoGenomics said.

The company had a profit of $857,000, or $.02 per share, compared to a net loss of $113,000, or breakeven on a per-share basis, a year ago.

Its R&D spending increased 45 percent year over year to $649,000 from $448,000 in Q4 2012, while its SG&A costs rose 26 percent to $7.3 million from $5.8 million.

For full-year 2013 NeoGenomics' revenues improved 11 percent to $66.5 million from $59.9 million. Test volume improved by 20 percent, while average revenue per test dropped 7 percent, the firm said. Revenue growth resulted from an expanded test menu and a growing client base.

Profits for the year shot up to $2.0 million, or $.04 per share, from $65,000, or breakeven on a per share basis, a year ago.

NeoGenomics increased its R&D costs 4 percent in 2013 to $2.4 million from $2.3 million in 2012. Its SG&A costs rose 12 percent to $26.1 million from $23.3 million.

The company ended the year with $4.8 million in cash and cash equivalents.

"Despite continued pressure on reimbursement, we achieved strong revenue growth and sharply increased gross margins," NeoGenomics Chairman and CEO Douglas VanOort said in a statement. "Our stream of innovative new tests and consistently high service levels is attracting new clients, and we are gaining market share."

The company gave revenue guidance of between $18.8 million and $19.3 million for the first quarter of 2014 with EPS of $.01 to $.02.

The figures do not include potential impacts from a possible negative resolution of CMS' National Correct Coding Initiative on proper billing for FISH testing for Medicare beneficiaries. NeoGenomics continues to evaluate the impact from a negative resolution of the NCCI FISH edit issue and preliminarily estimates it could reduce revenues by about $1.0 million in Q1 2014 and EPS by $.02.

Excluding the impact of the NCCI FISH issue, the company said revenues for full-year 2014 is anticipated to be in the range of $73 million to $77 million, while EPS is projected at $.05 to $.07.

The NCCI FISH issue could reduce revenues by $3 million and EPS by $.04 for full-year 2014, NeoGenomics said.

"Although there is uncertainty regarding new guidance from CMS' National Correct Coding Initiative … we believe reimbursement for the rest of our testing and from our non-Medicare payers will remain reasonably stable in 2014," VanOort said. "We also expect to reduce costs per test by another 8 to 10 percent this year. In addition, we are increasingly focused on exploring mergers and/or acquisitions as a means to increase our scale and to diversify our portfolio."